The intergovernmental organization managing global trade relations, World Trade Organization (WTO) and the International Renewable Energy Agency (IRENA) have launched a new booklet highlighting the need for open trade policies and harmonized product standards to support the deployment of solar photovoltaic (PV) technologies.
The booklet states that by assisting an expansion in solar energy, global trade can contribute to environmental goals and support economic recovery in the aftermath of the COVID-19 crisis.
According to the publication titled “Trading into a bright energy future: The case for open, high-quality solar PV markets”, solar PV has become a pillar of low-carbon sustainable energy strategies, with the cost of electricity generated by PV plants declining by 77 percent between 2010 and 2018.
Trade and the globalization of the solar PV market have played a key role in lowering the prices of the technology as manufacturers are better able to source goods and services from competitive suppliers. However, further support from trade policies and harmonized product standards is needed to unlock additional cost reductions and job creation in the solar PV sector, the booklet added.
While the average tariffs on solar PV goods are relatively low, large divergences remain among WTO members, with some applying tariffs as high as 15 percent on machines for PV panels.
Cohenrence in product standards is also crucial to a globalized PV market to promote safe and inclusive trade in solar PV goods and services. The publication draws from the expertise of IRENA, which provides guidance to countries on the development and implementation of a quality infrastructure for trade in renewable energy technologies.
International cooperation, including mutual recognition of standards and regulatory provisions in trade agreements to formal cooperation partnerships and regulatory harmonization, can help companies seize trade opportunities and enable governments to develop sustainable energy systems.
Sustainable energy is particularly vital in light of the health and economic crisis stemming from the COVID-19 pandemic, according to the booklet. Off-grid solar energy solutions can be ramped up quickly for healthcare centers, further trade-led solar PV deployment can help to support economic recovery from the pandemic, not least by creating jobs, which are expected to reach over 40 million worldwide by 2050 in the renewable energy sector.