Written by: Basant El-Farmawy
Global solar energy supply chains are witnessing profound structural transformations, driven by increasing industrial policies and protectionist trends aimed at supporting local manufacturing. These changes are clearly evident in major international markets seeking to enhance their production capacities away from total reliance on Asian markets.
Laura Sartori, CEO of the Italian company Ecoprogetti, specialized in solar panel production lines, pointed out that the global trend is currently moving towards adopting protectionist measures to ensure the sustainability of supply chains. For example, the United States is adopting policies that include setting a minimum price for components, which has helped stimulate sector growth locally despite high production costs.
In contrast, India is a prominent model in applying comprehensive industrial policies that are not limited to panel assembly alone, but extend to cells, wafers, and ingots. The Indian strategy relies on companies merging to create giant entities capable of competing and investing in raw materials, a trend that differs radically from the European model.
Sartori emphasizes that Europe should not try to imitate the "mega-factory" model found in the United States or India, but should instead exploit its historical advantage based on small and medium enterprises and specialized manufacturing networks. She explained that factories with a production capacity ranging between 1 and 3 gigawatts represent the optimal choice for manufacturers in Europe, as they provide a delicate balance between economies of scale and financial viability.
Sartori warns that exceeding a capacity of 3 gigawatts in the European context may lead to additional administrative and financial burdens, especially regarding working capital requirements and bank guarantees. Moreover, the European market structure, characterized by smaller projects and diversity in demand, requires higher production flexibility rather than relying on mass and centralized production that does not necessarily suit the operational characteristics of the local market.
