The big news from China today is that the Chinese premier, Xi Jinping, is having a face-to-face meetings with his US counterpart, Joe Biden. The significance of the location of the meeting being in San Francisco, the tech capital of the USA (if not the world) has not been lost on observers. Indeed, one of the main talking points is expected to be around US-China trade relations that has become increasingly protectionist over recent years. It got us thinking here at Gaia Renewables, will this dialogue change anything about China’s huge dominance over the global renewable energy industry?

A reasonable first question to ask might be, how much of a lead does China have in the manufacturing and delivering of renewable energy projects? The answer, simply put, is a large one, and a lead that is growing quickly. Solar PV is increasingly becoming the world’s renewable electricity generation technology of choice. In this regard, purely statistically speaking, China absolutely dominates. In 2019, China had a 66% global market share of polysilicon production, 78% of solar cell production, and 72% of solar module production! A mere 2 years later, in 2021, this had grown to 79.4%, 85.1%, and 74.7% respectively! That is a huge growth in only 2 years and shows the obscene grip China has on the global solar PV manufacturing industry. This means that China obviously manufacturers all of its own Solar PV needs but also manufacturers more than three-quarters of the EU’s solar PV installations as of 2021.

One might ask what fuels the incredible lead China has built up in renewable technologies and manufacturing? Ultimately, the Chinese government saw an opportunity in the late 00s by predicting a large increase in global demand for renewable energy technologies and doubled down on the manufacturing of these materials as a way of getting a geopolitical advantage against the US. China supported these manufacturers with huge domestic demand. Indeed, China has a huge 130GW of solar energy capacity, more than any other country in the world. This has helped China support 2.7 million solar industry jobs (a significant share of the 4.3 million solar jobs worldwide). This gives China a huge comparative advantage in skills and competencies in the renewable energy sector.

The economic effect for the EU and US of this dominance by China is, to say the least, painful. As recently as September, the solar sector in the EU called for a $100m bailout as pressures from Chinese competitors pushed them to the brink of bankruptcy. An investment of capital at this scale might seem like a lot, however the US finessed the massive $369bn Inflation Reduction Act to provide specific financial support to its domestic renewable energy sector. The EU is indeed finally  taking a more proactive approach to tackling this Chinese dominance in renewable energy manufacturing with specific policies based on boosting competitiveness.

From the growth that China is still demonstrating it doesn’t look like this dominance is going to have any serious competition for a long time to come. But how does this effect you? Firstly, it actually means that your solar installations are becoming cheaper and cheaper. China is able to leverage economies of scale to deliver cheap materials to us, savings which we are able to pass onto you. Secondly, as the EU and US attempt to compete it is reasonable to assume that more innovative exciting technologies will be brought to the market.

If you want to explore how affordable this has made installing your own solar panels then get in touch and we will be happy to give you a free quote.