The 95% Problem

There is no clean-energy statistic quite as lopsided as this one: China controls more than 80% of every stage of the solar photovoltaic supply chain, polysilicon, ingots, wafers, cells and modules, and at the wafer stage its share is close to 95%.^[1] The International Energy Agency, which is not given to hyperbole, calls solar the most concentrated supply chain of any major energy technology. Whatever the rest of the world builds downstream, the crystalline heart of almost every panel on earth is Chinese.

The concentration is geographic as well as national. A single province, Xinjiang, accounts for roughly 40% of global polysilicon production, and China’s announced pipeline of more than 1,000 gigawatts of advanced N-type cell capacity is some seventeen times the rest of the world’s combined.^[1][3] Wood Mackenzie expects China to hold above 80% of world polysilicon, wafer, cell and module capacity through at least 2026. This is not a lead that erodes on a three-year view.

The price of dominance

That dominance was bought with a cost collapse. The IEA puts the decline in solar PV costs at more than 80% over the past decade, and the descent has continued into a brutal glut: by late 2024 module prices had fallen below roughly ten cents a watt, with some Chinese bids near 7.8 cents, while polysilicon sank to about $5.85 a kilogram against roughly $24 for non-Chinese material.^[4] Global manufacturing ran at only about half of nameplate capacity.^[2] Cheap panels are a gift to the energy transition and a wound to the manufacturers, a tension we treat in a separate brief on overcapacity.

Whatever the world assembles downstream, the crystalline heart of nearly every panel on earth is made in China, and one province makes two-fifths of the raw material.

China’s grip extends to demand, too. It holds around half of the world’s cumulative installed PV capacity and accounted for roughly three-fifths of new global installations in 2024, though the precise share varies with how additions are counted.^[2] It is both the factory and the largest customer.

Why this is on our list

Solar is the clearest case in the whole renewable stack of a contest already decided at the manufacturing layer. For an investor the implication is not to look for the challenger who will out-manufacture China on price (there is almost certainly no such firm) but to underwrite the parts of the value chain where the moat is thinner: the equipment that makes the wafers, the specialised materials, the balance-of-system and downstream project economics that a Chinese module glut actually improves. The reflex to “back a Western solar champion” runs straight into a 95% wall; the durable opportunities sit beside that wall, not against it.