Cheap, abundant Chinese solar panels have become essential to decarbonizing the global energy system. Without them, the world’s clean energy transition would have arguably been slower and more expensive. But China’s solar manufacturing industry now faces a bizarre problem: oversupply. Chinese solar manufacturers have built far more production capacity than the market can absorb. In fact, China now has enough factories to meet roughly twice the global demand for solar products, according to an analysis by the research firm Rhodium Group. If all newly announced factories get built, the country’s manufacturing capacity could double, further widening the gap between supply and demand.
China’s solar industry is losing money. The country is doubling down anyway.
Brutal price wars among manufacturers have caused solar panel prices to plummet, making renewable energy cheaper than ever.
