Environmental and socio-economic implications of solar photovoltaic reshoring under the EU Net Zero Industry Act: a hybrid input–output assessment

Abstract

The photovoltaic supply chain is complex and geographically concentrated. Assessing the impacts of policies targeting it requires models that explicitly represent supply-chain structure. While process-based life-cycle assessment truncates economy-wide effects and top-down input–output models are too aggregated to resolve individual manufacturing stages, our study develops a hybrid framework integrating a process-based PV supply chain model into the multi-regional input–output accounting structure of EXIOBASE. The model is first verified against reference literature ranges of solar electricity carbon footprints and producer prices, showing literature-consistent results that purely top-down models miss by omitting productive capital. The framework is applied to the Net Zero Industry Act, a major European Union (EU) reshoring policy, under a scenario where 40% of module demand is supplied domestically. Results show that reshoring mainly affects downstream stages, while upstream production remains largely external, leading to moderate changes in consumption-based emissions and limited gains in EU value-added and employment. Hybrid LCA resolves PV supply-chain stages that top-down models cannot capture. Carbon footprints of PV electricity range 22-65 gCO₂eq/kWh, aligned with literature. NZIA reshoring (40% EU module supply) mainly affects downstream production. EU GDP increases by ~€4 billion (<0.04%), with persistent upstream value-added leakage. NZIA cuts EU consumption-based PV emissions ~5%: a resilience, not climate, policy. Hybrid LCA resolves PV supply-chain stages that top-down models cannot capture. Carbon footprints of PV electricity range 22-65 gCO₂eq/kWh, aligned with literature. NZIA reshoring (40% EU module supply) mainly affects downstream production. EU GDP increases by ~€4 billion (<0.04%), with persistent upstream value-added leakage. NZIA cuts EU consumption-based PV emissions ~5%: a resilience, not climate, policy.