China has produced an excess of solar panels, causing overcapacity issues domestically and abroad. The US, the European Union, and China are facing challenges because of the excessive supply of solar panels. Curtailment is seen from the past few months in the production. 

China’s rapid growth in the solar industry is now going through obstacles. China’s aggressive production of solar panels is now resulting in first, prices reducing to their depth and the country is changing its transition to clean energy. On the other hand, allies like the US, and European Union are now facing challenges to think that China is trading low-priced products which now can result in trade wars between the countries. 

As China’s excessive manufacturing of solar panels, their power grids can’t grasp all the extra electricity generated. To level down these problems, China has paused the production of some solar companies, so this will lessen the free incentives and the growth of some solar projects will slow down. Still, it has increased in comparison to the previous year.

 In March 2024,  China being the world’s largest solar energy market globally, had completed approximately 660 GW installation of solar panels. The US being second in the world solar market, has installed 179 GW, enough to generate electricity for 33 million American homes. 

China’s solar industry is experiencing its success and challenging story together. On one hand, they are making solar panels so affordable and generating clean energy. However, this success is now overpowering the country’s stake as their industry China Photovoltaic Industry Association is asking them to minimize production to get them on track. This got even worse when US President, Joe Biden released the news of increasing the tariffs on Chinese solar panels which made American buyers less interested in purchasing the Chinese solar panels. 

Source : Reuters 

China has reduced its production in comparison to previous months. They have limited their goal to 5% from 2020, because the rates till 2016 were very much higher to 20%. Increased curtailment could slow down China’s transition to clean energy sources. It could also discourage investment in new renewable energy projects.

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Our Perspective 

China should minimize the production of solar panels to solve the problems they are suffering. As already their technology is so strong that they will sustain the position to be the first in the solar energy market. As soon as their production and supply are balanced their allies will not face any challenges or trade wars with the country.