As the risk of trade disruptions increases, so does the need to ensure energy security, for which solar panel production will become increasingly important according to a new report from the United States Studies Centre (USSC) at the University of Sydney.
In Should Australia make solar panels? Supply chain security through global engagement, Research Associate Georgia Edmonstone argues that, while Australia’s concerns about the resilience of the solar supply chain may be justified, its policies need to focus on Australia’s place in the global supply chain.
“The government’s Solar Sunshot seeks to diversify Australia’s energy supply and reduce its reliance on China,” USSC Director of Economic Security Hayley Channer said, “But energy security can be best ensured by more deeply engaging with global supply chains – not just investing at home.”
The report analyses global trends around solar panel production and, in particular, how China came to dominate manufacturing across the supply chain.
“Australia has an opportunity, not just to on-shore but to fill niche gaps in the global solar supply chain and, in so doing, build resilience in this supply chain.” Channer noted, “In this way, Australia can multiply its industrial policy output by supporting global trade flows at the same time it looks more inwards for solutions”.
The report draws on learnings from US solar trade and industry policy to inform the best path forward for Australia.
Recommendations
- Make supply chain resilience the centre of Solar Sunshot investments
- Invest in an import diversification strategy for solar modules
- Advocate for Australia to occupy a strategic niche in the solar supply chain
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