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IPFS News Link • Energy

Why Are Solar Panels 44% Cheaper In China Than The US?

•, by Mike Shedlock

China's Grip on Solar

The Wall Street Journal asks Can the U.S. Break China's Grip on Solar?

That's a free link worth reading. The short answer is everything in China is cheaper from materials to electricity to labor.

The process is worth a closer look, however, and the US trails significantly in every stage.


The primary building block for some 97% of the world's solar panels is high-purity silicon, or polysilicon. Making that silicon is the first big step in the solar manufacturing process. It is the most energy- and capital-intensive piece because of the high temperatures and expensive equipment used in refining.

Until around 2005, polysilicon manufacturing was dominated by companies from the U.S., Europe and Japan. With China's huge expansion and investment into solar, that has flipped. In 2023, roughly 91% of the polysilicon for solar panels was produced in China.

Recently, the U.S. has effectively banned the use of most Chinese polysilicon in imported solar panels because much of it is made in the western Chinese region of Xinjiang, where the U.S. has accused Chinese authorities of committing human-rights abuses including forced labor, allegations that Beijing denies.

Today, U.S. buyers are increasingly relying on solar panels that use polysilicon made outside of China. Those supplies are tight, and keep prices for the U.S. market higher than for other markets.