China has increased its solar PV global export market share from 2% in 2000 to 54% by 2011, even though U.S. solar PV are 5% more cost competitive than Chinese products before subsidies.

From 2000 to 2011, China increased its global solar PV export market share from 2 percent to 54 percent. This remarkable export growth, in addition to significant deployment subsidies in the United States, has helped solar PV costs decrease 75 percent in the last 10 years. But what’s the character of that cost decline?  According to a recent McKinsey study a share of the decline is economies of scale – i.e. greater solar PV production reduces unit costs – which in reality is a mix of incremental innovations in production and manufacturing efficiency. Some of the decline is also oversupply and low silicon prices caused by too much product flooding the market, largely caused by big, low-cost Chinese suppliers that are effectively pushing U.S. firms out of the market.