Why are Chinese solar manufacturers increasingly coming to Egypt? Chalk it up to tariff pressures at home and the appeal of investor incentives here — to say nothing of a large, growing domestic market for solar power.

Chinese solar power component manufacturers have been moving their production facilities to Egypt and the rest of the MENA region as they face pressure in their home market due to ongoing trade wars and geopolitical friction. The shift towards manufacturing components in the region comes as Egypt — and others across MENA — roll out incentives for these manufacturers to set up shop locally. In Egypt specifically, the government sees localizing the production of solar power components as a top priority, naming solar cells among 12 products that it wants to begin manufacturing locally.

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The global backdrop: The US has for years levied tariffs on Chinese-made solar equipment, starting with broad-based import tariffs through to finalizing antidumping and countervailing duties under the Trump administration. When Chinese companies shifted their assembly lines to Southeast Asia to dodge these barriers, Washington responded with new investigations into “circumvention” — threatening tariffs on plants in Vietnam, Malaysia, and Thailand. China’s Jinko Solar and Trina Solar are among the highly affected firms.

Tariffs changed the calculus for many firms: “If it wasn’t for tariffs, it’s very easy and convenient for Chinese manufacturers to stay in China — everything is familiar, cheap, and the whole supply chain is there,” Head of Solar Supply Chain at global consultancy and research firm Wood Mackenzie Yana Hryshko told EnterpriseAM.

But the localization drive in Egypt + MENA was also a pull factor: From the US InflationReduction Act’s incentives for American-made panels, to new rules in the Gulf, buyers increasingly favor locally-made solar products. “I think even domestic content requirements contributed more than tariffs” to Chinese manufacturers moving out of China, Hryshko told us. In other words, to sell into big markets, Chinese manufacturers must be in those markets.

The regional edge: Starting around 2023, Egypt, Saudi Arabia, the UAE, and Oman rolled outthe red carpet for solar manufacturers, providing generous incentives, government co-investment, and infrastructure support. These supportive policies are further helped by the region’s favorable geography — the Suez Canal Economic Zone gives manufacturers an easy route to export their output to European and US markets quicker than from East Asia, cutting transit time and cost. “The Middle East, especially Egypt, has a perfect position — close to anywhere basically,” Hryshko said.

Altogether, it’s a perfect storm: “Would they move only because of tariffs? I don’t think so. But would they move only because of favorable policies? For sure. Here you have a perfect combination — favorable policies and tariffs,” Hryshko noted.

Egypt is emerging as a key beneficiary of this shift: Long known more for its year-round sunny climes than for making panels, Egypt is now on the manufacturing map thanks to a handful of Chinese-led projects, particularly as the SCZone has been aggressively courting manufacturers. The pitch? A strategic location, existing infrastructures, and government support all the way up to the prime minister.

That pitch is paying off: In November last year, JA Solar unveiled plans for two factories, targeting 2 GW of solar cells and 2 GW of modules per year, with investments estimated at USD 138 mn for the cell plant and USD 75 mn for the module facility — aiming to source key inputs like glass and aluminum locally. Also last year China’s Elite Solar laid the foundation stone on its USD 150 mn solar factory in the SCZone’s TEDA in partnership with Teda Investment Holding — the company behind the China-Egypt TEDA trade zone. The facility will produce N-type solar cells and photovoltaic (module-cell-wafer) systems, with an initial capacity of 2 GW per year.

Not only factories, but also distribution: Chinese giant Trinasolar — which holds a 25% market share in Egypt’s solar module distribution segment — is supported by its local distributor, Maryzad, Global Sales VP and MEA Head Vincent Wu told EnterpriseAM. Maryzad has launched a dedicated solar logistics center in the SCZone, which is designed to accelerate regional distributions — not just across Egypt, but also to KSA, Sudan, Lebanon, and Libya. This vision positions the country as a key logistics and service hub for Trinasolar’s MEA operations, Vincent told us.

Another key takeaway from MENA’s solar push is that facilities here are built to last: Earlier waves of solar manufacturing were often built reactively — small facilities set up hurriedly to dodge the latest tariff, often just assembling modules from imported cells. Many ended up with outdated equipment and never moved beyond a few gigawatts. Southeast Asia and even the US became, as Hryshko noted, a kind of “cemetery of PV manufacturing” — filled with older technology and sub-scale plants, always one policy shift away from obsolescence. In the Middle East, however, the projects have been large-scale and vertically integrated from the beginning.

This integration — wafers, cells, and modules under one roof (or at least within one industrial zone) — cuts costs, improves quality control, and minimizes supply chain risks. For instance, China’s Sunrev Solar — which is building a USD 200 mn integrated industrial complex for solar energy components — plans to add ingot and wafer production in the project’s phase, so that eventually the silicon feeding its cell lines will be locally cast and sliced.

SOUND SMART- Solar panels are the end-product of a vertically tiered supply chain that starts with polysilicon — the raw material purified and cast into ingots. These ingots are sliced into wafers, which serve as the base for manufacturing solar cells. Cells are the functional heart of a panel, converting sunlight into electricity through photovoltaic reactions. Once interconnected, the cells are laminated, framed, and wired into complete modules — the final product installed on rooftops and utility-scale farms.

More Chinese investments are rolling in: China’s SBH Kibing Solar New Energy was recently looking to set up a USD 700 mn solar panel glass manufacturing facility in the SCZone — with the majority of output earmarked for export. The plant would provide a critical piece of the supply chain puzzle — glass can be up to 75% of a solar panel’s weight, so having a regional source lowers costs for production in Egypt and nearby markets.

And local players are happy to see that shift: Some 70% of solar power plant costs are USD denominated as solar panels are imported, Romany Hakeem, chairman of solar panel installation company BeNeshty Solar and deputy chairman of the Sustainable Energy Development Association, told EnterpriseAM last year. Some local companies have opted to locally assemble solar panels to cut down the installation costs, Hakeem told us.

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