Why are China's solar panels so expensive?

China accounts for 80% of solar module production capacity after years of subsidies, driving oversupply that has triggered a collapse in global prices and provoked import duties from trading partners to stave off being swamped by low-cost equipment.

Does China subsidize solar panels?

The U.S. and other trading partners say China improperly subsidizes exports, giving exporters of solar panels and other products an unfair advantage in overseas markets, where its manufacturers charge lower prices thanks to government support. Washington also says China improperly pressures foreign companies to hand over technology.

What is China's production capacity for solar modules?

At the end of 2023, China's annual production capacity for finished solar modules was 861 gigawatts (GW) equivalent according to China Photovoltaic Industry Association data, more than double global module installations of 390 GW.

Why is China a cost-competitive manufacturer of solar panels?

In fact, European and American machinery are three to four times higher than Chinese and South Asian ones (IEA, 2022a). All these factors allow China to provide cost-competitive manufacturing for all solar PV elements, especially since the material cost is unified.

Why are China solar module prices falling?

China solar module prices have fallen to their lowest values ever, as buyers and sellers alike reiterate that the module market continues to see intense competition and weakening demand, according to OPIS data.

Will China dominate the global solar supply chain?

In a separate analysis last month, Wood Mackenzie said China was expected to dominate the global solar supply chain for much of the next decade. China's panel production cost has dropped to 15 cents per watt this year, more than 60% below the U.S. price of 40 cents per watt, according to the report.