Silicon to Solar Plan: Australia’s manufacturing opportunities

Australia is a hub of solar PV expertise and a producer of many key raw materials, so what would it take to become a major manufacturer and supplier of solar panels?

One nation dominates manufacturing of solar photovoltaic (solar PV) panels and their components – China.

According to the International Energy Agency (IEA), China’s global share of all the stages of solar panels now exceeds 80 per cent.

Graphs showing China's dominance of solar PV
Click on the image above to view full size graphs (Source: IEA)

Why? China has invested heavily in solar PV over the past decade – around $US50 billion over the past decade, or 10 times total European investment over the same period. It has also leveraged access to cheap fossil fuels and labour.

Manufacturing costs in 2021 were 10 per cent lower in China than in India, 20 per cent lower than in the US, and 35 per cent lower than in Europe.

China’s low-cost production advantage has brought the world benefits, such as a massive fall in the price of solar panels.

But the concentration of both manufacturing and resulting global supply chains also carries huge risks. And that particularly affects Australia because solar contributes a growing share of Australia’s electricity mix.

Minister for Climate Change and Energy Chris Bowen said Australia will need to install at least 120 GW of solar generation capacity by 2050, which is a four-fold increase on current capacity.

“To achieve net zero, the world needs more reliable supply chains to meet surging demand for solar panels and Australia has what it takes to be a major supplier,” Minister Bowen said.

What can Australia do to reduce solar PV industry risks?

A new $1.12 million Silicon to Solar study will look at Australia’s options.

Backed by a $541,640 ARENA grant to the Australian PV Institute (APVI), the study will examine opportunities for domestic manufacturing, diversified supply chains, and the policy options needed to achieve them.

Australian solar PV research and development is already world leading. A key solar panel technology, the PERC solar cell, was invented and developed in the University of New South Wales. PERC technology is core to more than 80 per cent of solar PV cells manufactured today.

Australia researchers have held the world record for silicon solar cell efficiency for 30 of the past 40 years.

And in March 2023, an Australian National University research team backed by ARENA funding said it had surpassed a significant 30 per cent solar cell efficiency target. The team’s breakthrough technology offers potentially lower production and operational costs.

Australia also has reserves of many of the raw materials needed to make solar panels.

For instance, solar panels require very high-quality silicon, which starts with high-purity quartz. Currently, a single quartz deposit in North Carolina, US, supplies much of the world’s high-purity quartz. The supply risks of that situation are obvious.

But a recently published CSIRO Australian Silicon Action Plan identifies untapped high-quality quartz (silica) deposits in Western Australia, Queensland, Victoria and the Northern Territory. The report highlights the potential to develop regional silicon production, create jobs and reduce supply chain risks.

A path towards a more secure solar supply

SunDrive next generation solar cells
Testing SunDrive solar cells

The study brings together two strands of solar development: R&D and industry.

The Australian Centre for Advanced Photovoltaics (ACAP) has signed on as a study partner, bringing with it extensive expertise in solar PV research. Other industry partners involved in the study include 5B, AGL, Aspiradac, Energus, Siemens, SunDrive and Tindo Solar.

ARENA CEO Darren Miller said the study will provide a path forward to more secure solar supply chains as the industry scales up dramatically.

“Low-cost solar generation will be the foundation stone of Australia’s net zero economy, so it’s vital that we have reliable supply chains,” Mr Miller said.

“With ARENA’s support, APVI will look at ways to secure our supply of the inputs into solar panels and find opportunities to reap the benefits of manufacturing at home.”

APVI project manager, Dr Muriel Watt, said “Australia has good working relationships with PV manufacturers across the world and is keen to develop diverse and sustainable supply chains as global and Australian demand increases.”

ARENA has also launched a white paper highlighting how ultra low-cost solar can unlock Australia’s potential to become a renewable energy superpower.

The key objectives of the paper are to elevate solar PV in Australia’s national priorities, and to identify and communicate key barriers and innovation priorities for ultra low-cost solar to government, industry and the Australian public.

ARENA has additionally committed $41.5 million to 13 solar PV research projects aimed at technological breakthroughs in ultra-low cost solar.