by Photo courtesy of the American Public Power Association

 A study co-authored by a UC San Diego researcher found that a globalized, open-trade supply chain saved an estimated $67 billion in solar panel production costs, $24 billion for the United States alone, officials said today.

The study, published in Wednesday's issue of the journal Nature, also predicts that if strong nationalistic policies are implemented — ones that could limit the free flow of goods, talent and capital — solar panel costs will be as much as 20%-25% higher by 2030.

"Policies that cut off global value chains and restrict flows of people and capital will disrupt the global learning processes that have
contributed precisely to solar's success story,'' said Michael Davidson, a study coauthor and assistant professor with UCSD's School of Global Policy and Strategy and the UCSD Jacobs School of Engineering.

"Models demonstrating the feasibility of meeting ambitious clean energy targets rely upon continued cost declines which may not materialize if countries choose to go it alone,'' he added.

The authors said the study comes at a time when many countries have introduced policies that would nationalize renewable energy supply chains in a bid to benefit local manufacturers. "Policies such as imposing import tariffs could complicate efforts to accelerate deployment of renewables like solar by raising the cost of production,'' researchers said.

"What this study tells us is if we're serious about fighting climate change, policymakers need to implement policies that promote collaboration across global value chains with regard to scaling up low-carbon energy technologies,'' said John Helveston, lead author of the study and assistant professor of engineering management and systems engineering at the George Washington University. "While this study focuses on one industry — solar — the effects we describe here are applicable to other renewable energy industries, such as wind energy and electric vehicles.''

The researchers looked at solar manufacturing in the United States, Germany and China — the three largest solar-deploying countries — between 2006 and 2020. The authors estimated that a globalized solar supply chain saved the countries a combined $67 billion, including $7 billion in savings for Germany and $36 billion in savings for China.

Had each of the three countries adopted strong nationalistic trade policies that limited cross-border learning over the same period, solar panel prices in 2020 would have been significantly higher — 107% higher in the United States, 83% higher in Germany and 54% higher in China, they said.

The study builds on a 2019 paper published by Helveston in the journal Science, which argued for more collaboration with strong manufacturing partners like those in China in order to rapidly decrease the cost of solar and accelerate the deployment of low-carbon energy technologies.

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