"Most domestic corporations were labeled 'Assembly Korea' instead of 'Made in Korea (Made in Koea)."
A solar industry official I met recently said this while recounting what was seen at the International Green Energy Expo held in Daegu on Apr. in , noting, "There were more Chinese corporations than domestic corporations," and sighing as the official conveyed the reality that Korean corporations participating in the expo were acknowledging that they "assemble in Korea," not that they are "Korean-made."
The industry is highly alarmed about Chinese products, but the Ministry of Climate, Energy and Environment only calls for expanding renewables centered on solar power and seems oblivious to the collapse of the solar supply chain.
The ministry released the First Basic Plan for Renewable Energy on May 19, saying it would expand cumulative renewable energy capacity to 100 GW by 2030. The government plans to increase solar from 30.8 GW in 2025 to 87 GW by 2030. This does not differ much from what it put forward in Sep. last year as one of the strategies to implement the 2035 Nationally Determined Contribution (NDC).
The media and the renewable industry have repeatedly pointed out that the government's solar expansion policy is overly rosy. With the capacity of domestic solar companies, the government's plan cannot be met, and Chinese products will end up flooding the market. Yet the government came back with another solar expansion plan after eight months.
Of course, there is an additional plan the government released: a strategy to secure solar sites. To generate 1 GW of power with solar, land the size of 2,000 soccer fields is needed. The government decided to form a pan-government task force to identify mega project sites, with local governments participating.
However, it did not present countermeasures to concerns that Chinese products will flood in if it pushes renewable expansion at the pace it set, nor did it offer ways to revive the domestic solar supply chain. The solar supply chain consists of "polysilicon → ingot → wafer → cell → module," but there are no domestic corporations engaged in polysilicon, ingot, or wafer businesses. The only surviving part of the solar supply chain in Korea is the module stage, which assembles cells.
Moreover, the government put forward lower generation costs, which could block the nurturing of the domestic supply chain. It plans to cut the solar generation cost from about 150 won per kWh to 100 won in 2030 and 80 won in 2035. As generation costs fall, power producers are effectively left with no choice but to use relatively cheaper Chinese products.
At this point, the past, when the domestic solar supply chain collapsed under China's low-price offensive, is all but forgotten. Woongjin Energy, the only domestic company specializing in ingots and wafers, went bankrupt just four years ago, in 2022, after China's price undercutting.
OCI Holdings, which produces polysilicon, and Qcells (the Hanwha Solutions solar business), which handles post-ingot businesses, turned overseas. In the meantime, China secured more than 90% of the global polysilicon, ingot, and wafer businesses.
The United States, under the Inflation Reduction Act (IRA), is restructuring the renewable supply chain around itself by granting cash incentives to suppliers that manufacture in the U.S. It also offers additional tax credits to power producers that use domestically made products. In effect, it built a shield to counter China's price undercutting.
The solar industry says, "We are Korean corporations—why wouldn't we want to do business in Korea? If only a foundation exists to receive at least normal prices, we would do business domestically anytime for energy security." Rather than talking only about solar supply, what is more urgent is to revive the domestic supply chain and craft incentives for corporations that will not be dependent on China.