E-Paper
Trying to diversify supply chains, reduce dependence on China: Ajay Mathur
China alone produces about 70% of the world’s metallurgical-grade silicon, a critical component for solar PV manufacturing , and approximately 77% of the world’s polysilicon
The International Solar Alliance (ISA), an inter-governmental organisation, has been working for a more diversified and resilient ecosystem amid a highly centralised manufacturing sector. Ahead of the two-day International Solar Festival beginning Thursday, ISA director-general Ajay Mathur spoke to HT about the growing efforts to diversify supply chains, reduce dependence, and enhance global supply chain reliability. Edited excerpts:
Which countries provide raw materials for panels and batteries?
Over the past decade, in the global solar PV [photovoltaic] manufacturing landscape, China has been the dominant player, holding a substantial majority across all stages of solar panel production. China is home to the world’s top 10 suppliers of solar PV manufacturing equipment, underscoring its central role in this industry. The manufacturing for solar panels requires key raw materials such as silicon, silver, aluminium, and copper. China alone produces about 70% of the world’s metallurgical-grade silicon, a critical component, and approximately 77% of the world’s polysilicon.
Silver, essential for solar panel production, is predominantly mined in Mexico, Chile, Australia, Russia, and China. Bauxite, from which aluminium is derived, is sourced mainly from Australia, Guinea, and China. When it comes to manufacturing lithium-ion batteries, China again leads the charge, followed by countries like Australia, Brazil, Canada, South Africa, Chile, and Indonesia. This trend is expected to continue in the near future, with China remaining the major supplier of these critical materials. We are beginning to see diversification, both in the mining and refining capacities of other countries and in the materials used.
What is being done to counter China’s monopoly?
In light of the highly centralised solar manufacturing sector, discussions are underway to foster a more diversified and resilient global solar ecosystem. China’s dominant position in the solar and battery supply chain, controlling major stages of manufacturing and being a leading producer of crucial raw materials such as aluminium, copper, silver, and lithium, underscores the global reliance on Chinese production capacities.
There is a growing effort to diversify these supply chains, reducing dependence and enhancing global supply chain reliability. Firstly, ISA supports the aggregation of smaller-scale demands into larger, viable investment opportunities. Guarantee programmes have been established to assure investors of returns, thereby enhancing the attractiveness of solar investments globally, not just in China. Secondly, technological innovations, such as the development of sodium-ion batteries, offer promising alternatives to traditional lithium-ion technologies, potentially reducing reliance on supply chains heavily concentrated in specific regions.
In response to the need for geographic diversification, countries are increasingly incentivised to develop their manufacturing capacities. This includes transitioning from solar cell production, heavily centralised in China, to broader solar module assembly, which can be more geographically dispersed. Such strategies not only mitigate supply chain risks but also foster economic growth by creating local jobs and adding value domestically.
ISA’s role extends to supporting regulatory changes and financial mechanisms tailored to encourage private investments, particularly in regions traditionally reliant on state investments.
What is the agenda of the International Solar Festival? Why are you organising it?
The festival aims to broaden the conversation around solar energy beyond government circles, extending the dialogue to include youth, women, communities, and the private sector. Our primary goal is to demonstrate how solar energy can seamlessly integrate into everyday life, bringing tangible benefits to people globally. Additionally, we aim to foster cross-fertilisation of best practices, allowing different communities to learn from each other’s experiences. For example, what can women’s groups worldwide learn from each other, or how can a community using solar energy for health care in northeast India share its insights with similar initiatives in Mozambique?
What kind of projects is ISA focusing on in areas with poor or no electricity coverage?
ISA is working towards enabling global energy access by facilitating various initiatives tailored for regions with limited or no electricity. Central to these efforts is the Scaling Solar Mini-Grids programme, which supports the installation of mini-grids in remote areas, particularly in rural Africa, where they offer a more cost-effective solution than extending traditional power grids.
ISA also enables projects targeting the agricultural sector, such as the Scaling Solar Applications for Agricultural Use programme, which supports the installation of over 272,579 solar-powered water pumping systems. Our Global Solar Facility (GSF) is a payment guarantee fund designed to stimulate investments in solar power projects, particularly in underserved regions like Africa. The GSF is set to unlock substantial commercial capital for off-grid solar, rooftop solar, and productive-use solar projects.
This financing vehicle is structured to mitigate investment risks through payment guarantees, insurance, and technical assistance, thereby attracting private sector investment to regions with immense solar potential but significant investment challenges. The GSF aims to facilitate $10 billion in investment, improving energy access for 35–40 million African households by 2030. As the initiative progresses, the GSF plans to expand to other regions, including Asia, Latin America, and the Middle East, supporting innovative solar technologies and startups to drive a global clean energy transition.
What are your expectations from COP29 (UN Climate Change Conference Baku)?
At COP29, solar energy is set to be a key player in combating climate change, to triple global renewable energy capacity by 2030. This includes expanding solar farms, and rooftop systems, and improving grid infrastructure to handle increased renewable energy. Advanced energy storage solutions will be essential to maintain a stable solar energy supply, even when the sun is not shining. A significant focus will be on climate finance, aiming to mobilise substantial funds from both public and private sectors to support renewable projects. Technological advancements, such as developing efficient solar panels, smart grid technologies, and improved battery storage, will also be key topics. Governments are expected to adopt policies that encourage solar energy expansion, including subsidies, tax incentives, and streamlined regulations. International cooperation will foster public-private partnerships and knowledge sharing to promote solar energy in developing nations. These efforts are geared towards accelerating the transition to a sustainable, low-carbon future driven by renewable energy.
