China drives down cost of solar power development

China's large-scale development of solar power, coupled with continuous innovation and a complete industrial chain, is driving down production costs and making new energy products more affordable worldwide, experts said.

This shift benefits the global community, whose current solar capacity still falls short of demand to achieve decarbonization goals. Developing nations, particularly, need more advanced solar capacity to make electricity more accessible and cost-effective for local people and economic activities, they said.

The remarks came after some Western politicians and media outlets recently claimed that China is digesting excess capacity within the new energy sector and causing market distortions abroad by dumping products at low prices, damaging other economies.

"Concerns have been heightened in Western nations given the rapid growth of China's solar industry, which epitomizes the swift evolution of the country's new energy sectors. The advancement of China's solar industry plays a pivotal role in ensuring a stable supply of solar products to address climate change worldwide, making solar power one of the most economical power sources for the vast majority of countries and regions globally," said Liu Yiyang, deputy secretary-general of the trade body China Photovoltaic Industry Association.

Liu said that the current solar industry capacity still falls short of meeting market demands globally, particularly given the substantial demand for power in numerous developing nations.

At a warehouse in Uzbekistan, China's solar panels are set to energize and provide affordable clean energy for refugees across Asia, guided by the UN Refugee Agency and a Chinese solar firm, LONGi.

Raouf Mazou, the agency's assistant high commissioner for operations, said that Chinese energy firms empower the agency to expand its reach and impact in addressing climate issues and achieve energy equity for vulnerable populations globally.

"China's abundant resources, innovative technology and extensive global relationships could make significant contributions to our work. We look forward to more fruitful collaborations with the Chinese authorities and companies in addressing challenges linked to displacement arising from climate change," Mazou said.

Over 100 countries reached agreements at the COP28 climate change conference late last year that global renewable energy capacity will be tripled to reach over 11,000 gigawatts by 2030, with cumulative PV capacity rising to about 5,457 GW by then.

According to analysis company Statista, in 2022, global cumulative solar PV capacity will amount to 1,177 GW, falling short of the given goal.

"Some politicians' criticism of China's excess solar capacity leading to low costs and impacting global industrial competition is untenable. This rhetoric aims to curb China's industrial development, which will have adverse effects on global green transformation. China's scaled development, supply chain construction, and technological iteration in the global PV industry have led to rapid cost reductions, allowing more countries, especially developing ones, to enjoy affordable electricity, promoting local economic development, and bridging disparities among regions," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

"Chinese enterprises have also promoted the global development of the PV industry through international cooperation and overseas factories, facilitating other countries' green transformation of their energy structures. Whether for the United States or elsewhere globally, without competitively priced products from China, it's hard to imagine whether the current international confidence in addressing climate change would remain as strong," Liu said.

Taking Europe as an example, a report by the International Energy Agency showed that, from 2021 to 2023, new installations of photovoltaic and wind power were estimated to save approximately €100 billion ($107 million) for electricity consumers in the European Union.

From 2021-2022, the EU saw new installations of nearly 90 GW of photovoltaic and wind power, replacing nearly 10 percent (about 230 billion kilowatt-hours) of coal and natural gas power generation, effectively lowering consumer electricity prices.

The CPIA estimated that without new wind and solar installations, the average wholesale electricity price in the EU would have been 8 percent higher in 2022.

"The rapid development of China's PV industry holds profound significance for many developing countries. It provides a means for developing countries to overcome energy shortages cost-effectively and reduce reliance on imported fossil fuels. Chinese PV companies' overseas projects also promoted local employment, especially in installation, maintenance, and manufacturing sectors, injecting new vitality into economic growth." Liu said.

Zhu Gongshan, chairman of Golden Concord Holdings Ltd, a major solar power firm, said that "The PV industry is cyclical in nature, influenced by various factors such as market demand, technological iterations, policy adjustments, and industry competition. Currently, the industry is undergoing some cyclical adjustment characterized by fierce competition, which is an integral aspect of the market economy."