- IRENA and WTO’s joint report on solar PV technology sees its potential from a trade perspective
- The report believes a globalized trade led deployment of this technology can realize its full potential while also supporting the world’s achievement of climate targets
- Solar PV can also enable global recovery from the onslaught of the pandemic
- Writers suggest various measures including international cooperation, removing/reducing tariffs, and mutual recognition of standards to achieve the same
A new booklet titled Trading into a bright energy future: The case for open, high-quality solar PV markets calls for trade-led deployment of solar PV technology across the globe to create more jobs in this growing business segment, which will also contribute to helping the world achieve its environmental goals and support economic recovery from COVID-19.
Calling solar PV a pillar of the low-carbon sustainable energy system, the writers believe off-grid solar energy solutions need to be ramped up quickly to support electrification and continued energy supply to healthcare centers to help recover from and battle the pandemic.
Through this report, the International Renewable Energy Agency (IRENA) and the World Trade Organization (WTO) build a case for the need to have open trade policies and harmonized product standards for solar PV technology, which would help make this technology more cost competitive and ensure quality control in the products.
Trade in solar PV components as wafers, cells, modules, inverters, combiner boxes and the equipment that produces them has criss-crossed the world especially since 2005 at a faster rate than overall manufacturing trade, according to the report. They count investments in solar PV to have grown from from $77 billion in 2010 to $114 billion in 2018, and are expected to reach $165 billion by 2030.
Now to further gain from the popularity of this technology, the writers stress on the need to harmonize the products and ensure an efficient supply chain.
According to the booklet ‘coherence in product standards is also crucial to a globalized PV market to promote safe and inclusive trade in solar PV goods and services’.
The authors point at the ever-falling price of solar technology due to the globalized nature of this market, which they believe when furthered can not only lead to further price decline, but also enable companies to seize trade opportunities and enable governments to develop sustainable energy systems.
For this to happen, countries must ensure international cooperation ‘ranging from mutual recognition of standards and regulatory provisions in trade agreements to formal cooperation partnerships and regulatory harmonization’.
First up, they recommend reducing or eliminating solar PV tariffs that act as a ‘hidden tax on solar PV equipment’. And these tariff reduction efforts need to be complemented with efforts to address broader technological, economic, policy and regulatory barriers that hamper its deployment.
It also suggests having a well-functioning and robust quality infrastructure (QI) system, meaning institutional, legal and regulatory framework for product standards, that eventually promotes safe and inclusive trade in solar PV goods and services, reduces the risks of underperforming and of unreliable products entering the value chain, and ensures stability for investors and other value chain participants. These measures will also help domestic companies meet export requirements.
“Technical assistance and capacity-building to improve QI in developing countries, especially the poorest, could support the widespread adoption and enforcement of international solar PV standards, help bring uniformity to regulatory requirements and systems, and provide further impetus to trade safe, high-quality solar PV products,” it further reads.
The Trading into a bright energy future: The case for open, high-quality solar PV markets calls report is accessible for free on IRENA’s website.