The U.S. and Europe are heading in different directions on solar.
Both are installing large amounts of solar capacity, and both use imported panels, cells and other components to supply their domestic industries. But while the U.S. is developing a domestic supply chain, Europe is almost completely reliant on China for solar components, according to a new report from the Rhodium Group and Bruegel.
The divergence reflects the impacts of the Inflation Reduction Act, President Joe Biden’s signature climate law that has prompted a resurgence in American solar manufacturing. It’s also the result of efforts by several U.S. presidents to slow Chinese solar imports through trade restrictions. While the U.S. is becoming less reliant on China to supply its solar industry, Europe is installing more solar energy than the U.S., where panel prices are higher due in part to American tariffs on foreign parts.
“With a rapidly shifting landscape of manufacturing investment and trade policy in the US and Europe largely maintaining the status quo, it is likely that the two regions will continue to experience diverging trends,” the groups wrote in a report released Monday. “The US approach is expected to focus on expanding domestic solar supply and reducing reliance on China-linked imports, while Europe will likely prioritize fast-paced deployment of solar technology for electricity generation.”