China, which built its imposing, world dominating solar manufacturing sector with a combination of technology purchases from the west, academic partnerships and joint research, seems to have lost the appetite to allow others to do the same. The country, which leads in global solar markets with its manufacturing firms enjoying an almost 80% market share, hasn’t taken kindly to others trying to reduce their dependence  on Chinese imports. Reports confirm that the Ministry of Commerce and the Ministry of Science and Technology has banned Chinese manufacturers to use their large silicon, black silicon and cast-mono silicon technologies overseas, in newly amended export guidelines.

Three of the largest consuming and importing markets for solar equipment, the US, India and to a small extent Europe, have attempted, with varying degrees of success, to reduce dependence on imports by pushing for a manufacturing base locally. Now China, with the highest investment in R&D and some of the most cutting edge technology for manufacturing, has pulled up the drawbridge on any easy tech transfers.

In doing so, it is actually mimicking the US, which has placed restrictions on semiconductor technology transfers to China in the past year to protect its leadership in that market, especially in the matter of IPs.

India risks becoming collateral damage, or at least paying a high price for this protectionism, as its domestic manufacturers seek more expensive, and possibly relatively inefficient technology elsewhere. Already, bids for solar tenders are up by upto 15-20%, to compensate for the high tariffs on Chinese imports and domestic purchases. The same issue, as it plays out worldwide in key markets could even slow down solar adoption eventually.

The ban on the export of large silicon, black silicon and cast-mono passivated emitter and rear cell (PERC) technologies is likely to hurt even manufacturers who have already set up facilities using Chinese equipment, as getting service and spare parts might be a challenge.

Interestingly, after the US and India imposed tariffs on Chinese module imports to support domestic industry, polysilicon prices had shot up, an area where there was no hope of capacities ramping up outside China for some time. Similarly, heightened wafer prices wreaked havoc with solar cell imports through 2022, making it difficult for module manufacturers in these countries to survive without high tariff protection from Chinese competitors.

The saving grace is that interest in, and support for solar has been so high in recent years that the key technologies are fairly well known, and a complete shut out looks unlikely for now. Even leading Chinese firms have exported enough plant and machinery besides research facilities to other countries where they set up manufacturing bases to skirt import bans on their home country, creating a strong cohort of foreigners who are familiar and working on the same technologies.

But clearly, this game isn’t over yet.