The solar supply chain trilemma: Sustainability, resilience, and economic opportunity in an era of industrial policy

• In Event: Energy Transition: Implementation and Outcomes Across the States and around the Globe

Abstract

Global solar photovoltaic (PV) supply chains have achieved dramatic cost reductions but have simultaneously concentrated environmental burdens, trade vulnerabilities, and employment benefits in ways that are increasingly contested. This study develops an integrated three-dimensional analytical framework to evaluate how global versus national manufacturing supply chain configurations affect emission intensities, trade dependencies, and manufacturing employment outcomes across eleven countries representing major participants in the global solar PV value chain: China, Germany, South Korea, the United States, Japan, Malaysia, India, Singapore, Philippines, Canada, and Mexico.

Historical analysis from 2010 to 2024 reveals nearly twofold differences in manufacturing emission intensities across countries—driven primarily by variations in grid carbon intensity—with polysilicon production ranging from 99.58 kg CO₂e/kW in Germany to 195.95 kg CO₂e/kW in Malaysia by 2024. Trade dependence analysis demonstrates extreme upstream concentration risk, with seven countries exceeding the 60% high-vulnerability threshold for polysilicon imports and three reaching critical single-supplier status (India 94.7%, Mexico 97.5%, Singapore 91.2%). Employment analysis reveals high geographic concentration, with China accounting for 76% of total global solar PV jobs (4.36 million FTE) by 2024.

Scenario modeling employs a gradual transition parameter (λ) ranging from fully global (λ = 0%) to fully national (λ = 100%) manufacturing configurations over 2025–2035. Results demonstrate that supply chain reconfiguration produces divergent rather than uniform outcomes. Countries with cleaner electricity grids achieve simultaneous emission reductions and resilience gains through domestic manufacturing (Germany −18%, United States −21%), whereas fossil-dependent countries face emission penalties (Malaysia +15%, India +14%) despite employment gains. Under full nationalization, major importers could create substantial manufacturing employment (United States +904,800 FTE, India +611,000, Germany +400,400) while manufacturing hubs sustain absolute growth through domestic deployment expansion (China +780,000), demonstrating that supply chain diversification need not be zero-sum.

Critically, the analysis reframes supply chain governance as a negotiation problem rather than an optimization problem. No single configuration simultaneously optimizes sustainability, resilience, and economic security across all country types. Manufacturing hubs, major importers, and resource-constrained economies face fundamentally different trade-offs, and configurations that benefit some nations impose costs on others. For countries with low-carbon grids, domestic manufacturing offers aligned gains across all three dimensions; for fossil-dependent countries, manufacturing expansion requires careful sequencing with electricity sector decarbonization to avoid locking in carbon-intensive capacity. For resource-constrained economies with small domestic markets, regional supply chain partnerships offer more viable resilience gains than national autarky strategies. The integrated framework provides a quantified evidence base for these negotiations, making distributional consequences explicit and comparable across sustainability, resilience, and economic security dimensions.

Author

• Kaifang Luo, Baruch College (City University of New York)
  Presenting Author