Why markets need to reshore renewable equipment supply
Fitch Solutions expects markets to strengthen reshoring efforts.
Markets are expected to strengthen efforts to reshore renewable equipment manufacturing as Fitch Solutions sees markets working to secure their supply chain.
“We have observed that companies have ambitions to bring back domestic manufacturing capabilities, known as ‘reshoring’, to North America and Europe, and expand their operations to other parts of Asia, such as Southeast Asia,” Fitch noted in a report.
At present, markets are overly reliant on China for renewable equipment, which could dampen the growth of renewables globally.
Fitch raised reshoring efforts could have benefits, such as cost savings as markets cut expenses on transportation and logistics amongst others.
It can also improve quality control as well as enhance security as reshoring allows companies to protect their intellectual property and proprietary information.
Moreover, it increases efficiency by reducing the time and effort spent in coordinating with a foreign supplier. It also boosts the local economy as it leads to job generation and stimulation of local economies.