{"id":669174,"date":"2025-07-29T00:00:00","date_gmt":"2025-07-29T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/faced-with-tariff-pressures-at-home-chinese-firms-are-manufacturing-solar-energy-components-in-egypt\/"},"modified":"2025-07-29T00:00:00","modified_gmt":"2025-07-29T00:00:00","slug":"faced-with-tariff-pressures-at-home-chinese-firms-are-manufacturing-solar-energy-components-in-egypt","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/faced-with-tariff-pressures-at-home-chinese-firms-are-manufacturing-solar-energy-components-in-egypt\/","title":{"rendered":"Faced with tariff pressures at home, Chinese firms are manufacturing solar energy components in Egypt"},"content":{"rendered":"

Why are Chinese solar manufacturers increasingly coming to Egypt? Chalk it up to tariff <\/strong>pressures at home and the appeal of investor incentives here <\/strong>\u2014 to say nothing of a large, growing domestic market for solar power. <\/p>\n

Chinese solar power component manufacturers have been moving their production facilities to Egypt<\/strong> 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 \u2014 and others across MENA \u2014 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<\/a> that it wants to begin manufacturing locally.<\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n

The global backdrop:<\/strong> The US has for years levied tariffs<\/a> on Chinese-made solar equipment, starting with broad-based import tariffs<\/a> through to finalizing antidumping and countervailing duties<\/a> under the Trump administration. When Chinese companies shifted their assembly lines to Southeast Asia to dodge these barriers, Washington responded with new investigations into \u201ccircumvention\u201d \u2014 threatening tariffs on plants in Vietnam, Malaysia, and Thailand. China\u2019s Jinko Solar and Trina Solar are among the highly affected firms. <\/p>\n

Tariffs changed the calculus for many firms:<\/strong> \u201cIf it wasn\u2019t for tariffs, it\u2019s very easy and convenient for Chinese manufacturers to stay in China \u2014 everything is familiar, cheap, and the whole supply chain is there,\u201d Head of Solar Supply Chain at global consultancy and research firm Wood Mackenzie Yana Hryshko told EnterpriseAM.<\/p>\n

But the localization drive in Egypt + MENA was also a pull factor:<\/strong> From the US Inflation<\/a>Reduction Act\u2019s incentives<\/a> for American-made panels, to new rules in the Gulf, buyers increasingly favor locally-made solar products. \u201cI think even domestic content requirements contributed more than tariffs\u201d 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. <\/p>\n

The regional edge:<\/strong> Starting around 2023, Egypt, Saudi Arabia, the UAE, and Oman rolled out<\/a>the red carpet<\/a> for solar manufacturers, providing generous incentives, government co-investment, and infrastructure support. These supportive policies are further helped by the region\u2019s favorable geography \u2014 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. \u201cThe Middle East, especially Egypt, has a perfect position \u2014 close to anywhere basically,\u201d Hryshko said. <\/p>\n

Altogether, it\u2019s a perfect storm:<\/strong> \u201cWould they move only because of tariffs? I don\u2019t think so. But would they move only because of favorable policies? For sure. Here you have a perfect combination \u2014 favorable policies and tariffs,\u201d Hryshko noted. <\/p>\n

Egypt is emerging as a key beneficiary of this shift: <\/strong>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. <\/p>\n

That pitch is paying off: <\/strong>In November last year, JA Solar unveiled plans<\/a> for two factories, targeting 2 GW of solar cells and 2 GW of modules per year<\/a>, with investments estimated at USD 138 mn for the cell plant and USD 75 mn for the module facility \u2014 aiming to source key inputs like glass and aluminum locally. Also last year China\u2019s Elite Solar laid the foundation stone on its USD 150 mn<\/a> solar factory in the SCZone\u2019s TEDA in partnership with Teda Investment Holding \u2014 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. <\/p>\n

Not only factories, but also distribution:<\/strong> Chinese giant Trinasolar \u2014 which holds a 25% market share in Egypt\u2019s solar module distribution segment \u2014 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 \u2014 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\u2019s MEA operations, Vincent told us. <\/p>\n

Another key takeaway from MENA\u2019s solar push is that facilities here are built to last:<\/strong> Earlier waves of solar manufacturing were often built reactively \u2014 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 \u201ccemetery of PV manufacturing\u201d \u2014 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. <\/p>\n

This integration \u2014 wafers, cells, and modules under one roof (or at least within one<\/strong> industrial zone) \u2014 cuts costs, improves quality control<\/strong>, and minimizes supply chain risks. For instance, China\u2019s Sunrev Solar \u2014 which is building a USD 200 mn<\/a> integrated industrial complex for solar energy components \u2014 plans to add ingot and wafer production in the project\u2019s phase, so that eventually the silicon feeding its cell lines will be locally cast and sliced. <\/p>\n

SOUND SMART- <\/strong>Solar panels are the end-product of a vertically tiered supply chain<\/a> that starts with polysilicon \u2014 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 \u2014 the final product installed on rooftops and utility-scale farms. <\/p>\n

More Chinese investments are rolling in: <\/strong>China\u2019s SBH Kibing Solar New Energy was recently looking to set up a USD 700 mn<\/a> solar panel glass manufacturing facility in the SCZone \u2014 with the majority of output earmarked for export. The plant would provide a critical piece of the supply chain puzzle \u2014 glass can be up to 75% of a solar panel\u2019s weight, so having a regional source lowers costs for production in Egypt and nearby markets. <\/p>\n

And local players are happy to see that shift:<\/strong> 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<\/a> EnterpriseAM last year. Some local companies have opted to locally assemble solar panels to cut down the installation costs, Hakeem told us. <\/p>\n

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