Rebuilding Europe''s solar supply chain | McKinsey

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Are solar photovoltaics a cost-effective supply chain?

Absent subsidies, fully integrating domestic supply chains of solar photovoltaics will come at substantial cost to some economies (Figure 3). China and Southeast Asia remain the most cost competitive reflecting the current concentration of solar PV manufacturing in these regions.

Are solar PV supply chains cost-competitive?

Currently, the cost competitiveness of existing solar PV manufacturing is a key challenge to diversifying supply chains. China is the most cost-competitive location to manufacture all components of the solar PV supply chain. Costs in China are 10% lower than in India, 20% lower than in the United States, and 35% lower than in Europe.

Can Europe regain a missed opportunity with a solar PV supply chain?

Building up the solar PV supply chain can also be seen as a chance for Europe to regain a missed opportunity: the initial wave of solar PV adoption was led by European demand and, for a time, Germany's manufacturing was a competitive supplier 4.

Will solar PV manufacturing cost more if there are no subsidies?

It finds that absent subsidies, solar PV manufacturing costs using diffuse, diversified supply chains outside China and Southeast Asia will cost approximately 30% more, but there is wide uncertainty in the increased cost due to variations between economies.

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