China could Tear Down the PV market. Here’s how and why.

That there is political friction between United States and China is certainly not a hidden mystery, however not everyone is following with adequate attention how disagreements are quickly mounting up to affect the global supply chain of new technologies. However, Beijing is well aware of the situation, which recently floated the idea of blocking the export of the materials underlying the construction of solar panels, a move that could frustrate, or at least undermine, the efforts of all those nations that want to focus on renewable energy.

At first it was all about chips

Thanks to a clear productive convenience, over the years China has become a point of reference for all the foundries that have specialized in the production of semiconductors. Giants like Apple have long referred to Asian suppliers to give life to their coveted appliances, with the result that over the years plant engineering and know-how have been developed on site that border on monopoly tones, a primacy that has shown all the its destabilizing weight during the dramatic years of the pandemic.

With industries completely locked down by quarantines and sapped by an unforeseen drought, Chinese manufacturing hubs began to release dwindling supplies of chips, which quickly became contested between the production of computers, digital entertainment equipment, video cards useful for supporting blockchain dynamics and, above all, what orbits in the lucrative automotive sphere. The crisis that has arisen has represented a cold shower for the entire West, with Europe and the United States acknowledging that both their economy and their future technological prospects were radically dependent on a country that now stands out as fatal competitor.

Washington has begun to compensate for its shortcomings by launching the CHIPS and Science Act on August 9, 2022, an action plan worth about 280 billion dollars with which to stimulate research and manufacturing of the coveted microchips. The search for self-sufficiency has therefore passed through the transfer of means and skills from Taiwan, but also from a form of protectionism officially motivated by the desire to limit war potential of China. Not only that, by advancing real lobbying strategies, the US is perpetrating its cause at the gates of all NATO allies, with the result that recently Japan and the Netherlands have also decided not to sell their vanguard assets to the Communist Party.

The unknown factor of solar panels

In an unconnected manner, but with particularly suspicious timing, China’s ministers of commerce and technology have begun to seek for public comment which establishes whether or not to impose restrictions with which to ensure that a list of tools and materials essential to the digital sector is retained within national borders. Among the elements protected by the prohibition, there are also the ultra-thin silicon surfaces which, once assembled, form the bases of the photovoltaic panels.

From a virtuous and formal point of view, such a draconian intervention proves to be useful for slowing down research in the sector by third countries - the United States and India on top of all - and for ensuring that Beijing can preserve as much as possible for as long as possible the dominance in the field of solar panel production, where it currently boasts a share of 97% of global manufacturing. The opinion of many engineers is that Beijing does not wish to give up its most advanced products for fear that the academics of the destination nations may reverse engineer efforts in order to considerably skip the natural steps of the traditional research process. At the same time, wanting to provide a more malicious reading of the fact, it is difficult not to notice how such an investigation takes shape in a period in which solar energy is proposed as an alternative to hydrocarbons, which, between war and pollution, are no longer too attractive a resource.

Regardless of the driving reason that prompted the Chinese ministries to launch a similar idea, the fact remains that an eventual ban would greatly complicate the urgency of the future of photovoltaics, a risk that willy-nilly lends itself easily to become a weapon of blackmail with which to carry out geopolitical strategies that are able to respond to strategic balances openly in the balance.

Original article published on Money.it Italy 2023-02-20 10:35:31. Original title: La Cina potrebbe far collassare il mercato fotovoltaico. Ecco come e perché.