The reason behind China’s advantage in manufacturing less costly solar photovoltaic (PV) energy systems is not what you might think.
The prevailing belief is that low labor costs and direct government subsidies for PV are what accounts for the country's dominance in PV manufacturing.
But really, the region's competitive advantage comes from production scale—enabled, in part, through preferred access to capital (indirect government subsidies)—and resulting supply-chain benefits. This new information comes from a recent study completed by the Energy Department's National Renewable Energy Laboratory and the Massachusetts Institute of Technology.
The full study can be found in the peer-reviewed journal Energy & Environmental Science.