Commentary: Southeast Asia solar panel manufacturers are over-reliant on American demand - CNA
Published February 18, 2026
Southeast Asia's Solar Panel Manufacturers: A Heavy Dependence on American Demand
The solar panel manufacturing sector in Southeast Asia has seen significant growth over the past few years, primarily driven by increasing global demand for renewable energy solutions. However, this growth has led to a concerning trend: an over-reliance on American markets. This dependency poses risks to the stability and sustainability of the region's solar manufacturing industry.
According to recent statistics, Southeast Asia accounts for a substantial portion of global solar panel production. In 2022, the region produced approximately 35% of the world’s solar panels, with countries like Vietnam, Malaysia, and Thailand leading the charge. Vietnam alone has emerged as a major player, with its solar panel exports to the United States increasing significantly, reaching a value of $3.5 billion in 2021, up from $1.5 billion in 2020. This rapid growth highlights the region's capacity to meet the demands of the American market.
However, the heavy reliance on the U.S. market raises several concerns. The American solar market is subject to fluctuations based on policy changes, tariffs, and trade regulations. For instance, the introduction of tariffs on solar imports in 2018 significantly impacted Southeast Asian manufacturers. The tariffs, imposed under the Trump administration, led to increased costs for solar panels and created uncertainty in the market. Although the Biden administration has taken steps to alleviate some of these pressures, the ongoing volatility in U.S. trade policy remains a concern for manufacturers in the region.
In addition to trade policies, the current geopolitical landscape also poses challenges. The U.S.-China trade tensions have led to a shift in supply chains, with many American companies seeking to diversify their sources for solar panels. While this presents an opportunity for Southeast Asian manufacturers, it also underscores the risk of becoming overly dependent on a single market. If demand from the U.S. were to decline due to economic downturns or shifts in policy, Southeast Asian manufacturers could face significant repercussions.
To mitigate these risks, experts suggest that Southeast Asian manufacturers should consider diversifying their markets. Expanding into Europe, Africa, and other regions could provide stability and reduce the impact of fluctuations in American demand. For instance, the European market for solar panels has been growing steadily, driven by ambitious renewable energy targets set by the European Union. In 2021, Europe accounted for approximately 20% of global solar panel demand, and this figure is expected to rise as countries strive to meet their climate goals.
Furthermore, Southeast Asian manufacturers could benefit from investing in research and development to innovate and improve their product offerings. By focusing on advanced technologies, such as bifacial solar panels and solar trackers, manufacturers can enhance their competitiveness in the global market. These innovations could attract new customers and markets, providing an additional layer of security against fluctuations in demand from the U.S.
Moreover, collaboration among Southeast Asian countries could strengthen the region's position in the global solar market. By sharing resources, knowledge, and technology, countries like Vietnam, Malaysia, and Thailand can enhance their manufacturing capabilities and create a more resilient supply chain. Initiatives such as the ASEAN Economic Community could play a crucial role in fostering cooperation and integration within the region's solar industry.
Another critical factor to consider is the importance of sustainability in the manufacturing process. As the global demand for solar energy increases, so does the scrutiny on the environmental impact of solar panel production. Southeast Asian manufacturers are under pressure to adopt more sustainable practices, including reducing carbon emissions and minimizing waste. Implementing green manufacturing processes not only aligns with global sustainability goals but can also enhance the reputation of Southeast Asian manufacturers in international markets.
As Southeast Asia continues to expand its solar panel manufacturing capabilities, it is essential for the region to recognize and address its over-reliance on American demand. By diversifying markets, investing in innovation, fostering regional collaboration, and committing to sustainable practices, Southeast Asian manufacturers can build a more resilient and sustainable solar industry. This strategic approach will help ensure that the region remains a key player in the global renewable energy landscape, capable of withstanding the challenges posed by fluctuating demand and geopolitical uncertainties.
In conclusion, while the growth of solar panel manufacturing in Southeast Asia has been impressive, the region must take proactive steps to mitigate risks associated with over-dependence on the American market. By embracing diversification, innovation, cooperation, and sustainability, Southeast Asian manufacturers can secure their position in the global solar industry and contribute to a more sustainable future for renewable energy.
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