Diversifying EU’s Solar PV Module Supply Chain: Multi-Objective Modeling of Economic and Geopolitical Dynamics

Abstract

The European Union is expanding solar photovoltaic capacity at a rapid pace. However, the supply of PV modules is highly concentrated: 95% of solar PV module imports come from China, raising concerns about supply dependence and energy security. The core objective of this work is to model a cost and geopolitical risk minimizing strategy to diversify the EU's solar PV module imports across multiple export countries. A scenariobased analysis examines the impact of geopolitical tensions, such as price dumping, trade embargoes, and policy measures. The results indicate that geopolitical risk can be reduced, however, with additional costs ranging from 0.03 USD/W and 0.14 USD/W depending on the extent to which geopolitical risk is accounted for in the objective function. Minimizing the EU's geopolitical risk in solar PV module supply requires a diversification strategy, including long-term supply contracts with Malaysia and Vietnam.