Quantifying the cost savings of global solar photovoltaic supply chains

Nature

paper
poster
slides
Globalized supply chain has saved solar installers in the U.S., Germany, and China $67B 2008-2020, and solar prices will be 20-30% higher in 2030 if countries move to produce domestically.
Authors

John Paul Helveston

Gang He

Michael R. Davidson

Published

October 26, 2022

Nature December 1, 2022 Issue Cover highlighted our paper in the same issue
Paper

Quantifying the cost savings of global solar photovoltaic supply chains
John Paul Helveston, Gang He*, and Michael R. Davidson
Nature (2022)
DOI: 10.1038/s41586-022-05316-6

Abstract

Achieving carbon neutrality requires deploying renewable energy at unprecedented speed and scale, yet countries sometimes implement policies that increase costs by restricting the free flow of capital, talent and innovation in favour of localizing benefits such as economic growth, employment and trade surpluses. Here we assess the cost savings from a globalized solar photovoltaic (PV) module supply chain. We develop a two-factor learning model using historical capacity, component and input material price data of solar PV deployment in the United States, Germany and China. We estimate that the globalized PV module market has saved PV installers US$24 (19–31) billion in the United States, US$7 (5–9) billion in Germany and US$36 (26–45) billion in China from 2008 to 2020 compared with a counterfactual scenario where domestic manufacturers supply an increasing proportion of installed capacities over a ten-year period. Projecting the same scenario forwards from 2020 results in estimated solar module prices that are approximately 20–30 per cent higher in 2030 compared with a future with globalized supply chains. International climate policy benefits from a globalized low-carbon value chain, and these results point to the need for complementary policies to mitigate welfare distribution effects and potential impacts on technological crowding out.

Impact

Award: Integrated Assessment Modeling Consortium 2022 Best Poster Award

Nature Highlights: Climate policy: Solar energy expected to be cheaper through globalization

Joule Preview: The cost of risk mitigation—Diversifying the global solar PV supply chain by Nathan L.Chang, Mohammad Dehghanimadvar, and Renate Egan

Press release: SBU News, GWU News, UCSD News

Coverage: E&E News, Foreign Policy, GRID News, PV Magazine, dot.LA, pvbuzz, InnovateLongIsland, Mercom India, China News, Science and Technology Daily

Nature Portfolio Chinese summary

Notable policy citations:

World Bank. 2024. World Development Report 2024: The Middle-Income Trap

World Trade Organization. 2024. Working together for better climate action: Carbon pricing, policy spillovers, and global climate goals

Interanational Renewable Energy Agency. 2024. Renewable energy and jobs: Annual review 2024

World Trade Organization. 2023. Trade Policy Tools for Climate Action

World Trade Organization. 2023. Global Value Chain Development Report 2023

Twitter Thread

Poster

Here is the poster for IAMC2022 which won the Best Poster Award. The pdf is also available.

Slides

Above is the general slides of our paper, I presented it at Tsinghua University. Check the slides in a new tab.

Citation

BibTeX citation:
@article{paul_helveston2022,
  author = {Paul Helveston, John and He, Gang and R. Davidson, Michael},
  title = {Quantifying the Cost Savings of Global Solar Photovoltaic
    Supply Chains},
  journal = {Nature},
  volume = {612},
  number = {7938},
  pages = {83-87},
  date = {2022-12-01},
  url = {https://www.nature.com/articles/s41586-022-05316-6},
  doi = {10.1038/s41586-022-05316-6},
  langid = {en}
}
For attribution, please cite this work as:
Paul Helveston, John, Gang He, and Michael R. Davidson. 2022. “Quantifying the Cost Savings of Global Solar Photovoltaic Supply Chains.” Nature 612 (7938): 83–87. https://doi.org/10.1038/s41586-022-05316-6.