Global solar supply chains are undergoing a profound transformation, driven by growing protectionism and industrial policies aimed at supporting domestic manufacturing. This is the key takeaway from an interview with pv magazine featuring Laura Sartore, CEO of Ecoprogetti, an Italian company specializing in machinery and production lines for solar module manufacturing.
According to Sartore, this trend is increasingly evident across major international markets. “All the world’s primary supply chains, with the exception of China’s, are shifting toward a form of protectionism and price floors,” she said, citing the United States as one of the most prominent examples.

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The US market shows that introducing minimum price thresholds, even above the prices charged by Chinese manufacturers, does not necessarily slow demand. On the contrary, according to Sartore, the sector continues to grow despite rising component costs, supported by the development of a domestic supply chain.
In China, prices are also gradually rising across the supply chain following government efforts to curb overcapacity, a trend that was expected to continue into 2025. According to Sartore, this shift reflects a growing focus on the economic viability of manufacturing in a market where solar technology has already firmly established its competitiveness against other energy sources.
Among international markets, Sartore identifies India as one of the most compelling examples of industrial policy in the solar sector.
The Indian government is progressively expanding protectionist measures and domestic manufacturing requirements beyond modules to include cells, wafers and ingots, aiming to reduce dependence on Chinese imports and strengthen local production capacity.
“In my view, India has the most serious industrial policy. They have observed Europe’s mistakes, and they continue to monitor developments in the United States,” Sartore said, highlighting the clear industrial strategy pursued by Prime Minister Narendra Modi’s government.
A key element of this strategy is industry consolidation. Production capacity exceeding domestic demand is not necessarily seen as a problem. Instead, it can encourage mergers and direct investment toward segments of the supply chain that remain underdeveloped.
“The days of small-scale factories with a capacity of 200–500 MW are over; we are now seeing multi-gigawatt-scale facilities. And that is how it had to be—that is the only way forward for a continent-sized nation like India,” Sartore said.
This consolidation is helping create larger, more financially robust manufacturers capable of investing not only in solar cell and module production but also in the materials and components needed for manufacturing, including glass, encapsulants, backsheets and junction boxes.
According to Sartore, India now has the most comprehensive solar manufacturing supply chain outside China. However, domestic polysilicon production, a technically complex industrial process, remains underdeveloped.
“It will certainly be more challenging, because, beyond the raw material extraction phase, polysilicon production requires specialized technological expertise, capital-intensive facilities, and competitive access to energy. These industrial capabilities are currently lacking and must be developed and solidified; yet, India possesses the potential to scale them up,” Sartore explained.
Beyond technical expertise and investment, the environmental impact of manufacturing presents another challenge. Sartore stressed that developing a domestic polysilicon supply chain must also account for emissions from industrial processes.
“As India develops its polysilicon production, it must aim for high environmental standards and low-emission processes from the very outset. It is not enough to simply replicate production capacity—as seen in China—without prioritizing emissions; the goal must be to build an industrial supply chain that is competitive in terms of both energy efficiency and environmental impact,” Sartore added, noting that these requirements could lengthen the timeline for developing India’s domestic supply chain.
While India and the United States are focusing on large-scale factories and highly integrated supply chains, Sartore advocates a different approach for Europe.
She argues that Europe’s industrial model cannot be assessed using the same criteria as those applied in the United States or Asia. The continent’s manufacturing sector has historically been built around small and medium-sized enterprises (SMEs), industrial clusters and networks of specialized manufacturers.
“In Europe, we lack the ‘gigafactory’ or ‘mega-factory’ structure seen in India or the United States. Historically, our industrial fabric has been composed of small and medium-sized enterprises, across all sectors and fields,” she said.
Sartore points to Italy and Germany, where numerous industries have achieved international leadership through networks of relatively small but highly competitive companies.
According to Sartore, Europe’s solar manufacturing sector should build on this strength rather than attempt to replicate production models dominated by a handful of large manufacturers.
“The European multi-factory, network-based model is one that should not be abandoned,” she said.
However, this does not mean that small module assembly lines can remain competitive regardless of their production capacity. Manufacturers need to achieve a minimum production scale and invest in adequate levels of technology and automation to justify Capex and maintain competitive costs.
“A scale of 800 MW to 1 GW is the minimum threshold—necessary to make an investment sustainable—otherwise, the Capex burden becomes too heavy, making it impossible to reach competitive module price points,” Sartore explained.
Factory size is a key factor in the future of European solar module manufacturing.
According to Sartore, a production capacity of 1 GW to 3 GW offers an optimal balance between economies of scale, financial viability and operational complexity.
“A capacity of 1 to 3 GW is manageable,” she said, explaining that facilities of this size typically correspond to companies with annual revenue of €100 million ($112.2 million) to €200 million and approximately 150 to 300 employees.
Such companies are large enough to support industrial-scale manufacturing while remaining compatible with Europe’s existing industrial structure.
The challenge goes beyond the initial capital investment required to build a factory. Once production begins, manufacturers face substantial operating costs, particularly for raw material procurement.
Although increasing production capacity initially reduces module production costs per unit, there is a point beyond which the financial burden of operating a larger facility can offset these savings.
“In the European context, the 1 GW to 3 GW range captures the benefits of economies of scale. Beyond 3 GW, additional management costs and financial charges come into play; these weigh on the bottom line and do not necessarily lead to lower raw material procurement costs,” Sartore said.
For a 5 GW factory, working capital requirements can become particularly significant. Procuring and managing large volumes of raw materials requires substantial credit lines, bank guarantees and careful financial planning. These costs must be weighed against potential economies of scale, as greater production capacity does not necessarily translate into lower unit costs. Larger facilities also face greater financial exposure if demand falls short of production capacity.
“In Europe, without supply chain integration, if I need to purchase 5 GW worth of raw materials, I require structured bank collateral. There are high costs for credit guarantees and interest on cash flow—all of which weigh on the purchase price of the raw materials and on the company itself—potentially making the resulting photovoltaic module no more cost-effective than one produced by a smaller-scale manufacturer,” she explained.
As a result, a larger factory does not necessarily have lower production costs than a medium-sized facility, particularly when financing expenses and operating overheads are taken into account.
For medium-sized European manufacturers, a more moderate production scale can help limit financial exposure and make working capital requirements easier to manage, particularly given the financing conditions in Europe’s banking sector.
Production capacity should also reflect the characteristics of market demand.
According to Sartore, Europe’s solar market has a more fragmented structure than other major international markets, with projects generally smaller than gigawatt-scale installations and manufacturers required to handle a wider range of order sizes.
European solar projects often range from a few megawatts to several tens of megawatts, while installations approaching or exceeding 1 GW remain relatively rare.
Sartore argues that this further supports the development of a network of manufacturers capable of adapting production to individual customer requirements.
“There won’t be many gigawatt-scale solar power plant projects in Europe,” Sartore said. “The European market is defined by diverse requirements and local conditions, making the development of numerous medium-to-large-scale plants more likely than the creation of a large number of mega-installations.”
Production flexibility therefore becomes a key competitive factor alongside manufacturing costs and supply chain capabilities.
From this perspective, the future of European solar manufacturing may depend less on establishing a handful of massive gigafactories and more on developing a network of medium-sized manufacturers that are financially viable and capable of responding to diverse market requirements.
According to Sartore, this model is better suited to Europe’s industrial structure and the specific characteristics of its solar market.
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