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China is producing solar panels in huge quantities, significantly driving down prices and helping the country transition to clean energy.
The problem is that Chinese manufacturers appear to be overproducing solar panels, according to the United States, the European Union and their allies. They are now calling on Beijing to curb excess production of panels and other products, raising the possibility of a trade war.
China is facing a problem of domestic overproduction due to the rapid growth of solar energy, one of the key pillars of the country’s “New Three Major Economic Drivers.” China has installed so many solar panels that it is producing so much surplus electricity that it has no domestic capacity to store or transmit it. Reuters It was reported on Wednesday.
This overcapacity has prompted Chinese authorities to withdraw some price supports for the solar panel industry, resulting in a decline in solar panel installations, according to Reuters.
Solar panel installations in China continue to surge in the first quarter of 2024, with official data showing the installation rate increasing by more than a third year-on-year, but the growth rate is much slower than in the first quarter of 2020. 154% increase In the same quarter of 2023.
As of March this year, China, the world’s largest solar power market, 660 gigawatts Meanwhile, the United States has set 2023 as its target. 179 gigawattsThat’s enough to power 33 million American homes.
China’s excess solar panel production capacity could be exported
Chinese manufacturers are producing more solar panels domestically than people want to buy. Bloomberg Analysis During April.
Given the country’s domestic oversupply, the development signals something the West may not welcome: China continuing to dump surplus solar panels onto the international market.
Chinese manufacturers are feeling the solar heat The same goes for excess panel capacity.
March, Longi Green Energy Technology, The world’s largest solar cell maker said it would lay off thousands of employees due to overcapacity and low prices.
China’s solar panel overcapacity is so severe that the country’s China Photovoltaic Industry Association is calling for more mergers and acquisitions and limits on domestic competition to control capacity, the association said in an official post. WeChat Create an account on Tuesday.
Earlier this month, US President Joe Biden It announced that it would double tariffs on solar cell imports from China from 25% to 50%.
China Refuting Western claims Industrial overcapacity. Beijing says the EU is trying to stifle economic growth.
German energy prices pressured by solar energy glut
China is not the only country suffering from an oversupply of solar energy.
Germany, They also produce so much solar energy that energy prices fall into negative territory when production peaks.
But experts say these are just hurdles in the global energy transition from fossil fuels to green energy, and that the next phase will focus on optimizing supply and demand.
“Countries around the world introducing large amounts of renewable energy and facing challenges from erratic and intermittent generation are looking for smart ways to distribute this power and use it most efficiently and effectively – approaches that are AI-enabled, or at least model-backed,” David Fishman, senior manager at economic consultancy Lantau Group, told Reuters.
“Certainly China is heading there,” he added to the news agency.