Solar power in China

Solar resources

A July 2019 report found that local air pollution (black carbon and sulfur dioxide) has decreased the available solar energy that can be harnessed today by up to 15% compared to the 1960s.

Solar photovoltaics

As of at least 2024, China has one third of the world's installed solar panel capacity and is the largest domestic market for solar panels.

Solar PV by province

A large part of the solar power capacity installed in China is in the form of large PV power plants in the west of the country, an area much less populated than the eastern part but with better solar resources and available land.

Solar PV by type

In 2018 23,300 MW of utility scale power plant installations were added bring the cumulative total in this sector to 123,730 MW of power. Distributed installations rose by almost as much during 2018 at 20,960 MW bringing the cumulative total in the sector to 51,250 MW by year end 2018. Off-grid solar was the smallest component in 2018 with just 360 MW cumulatively installed.

Manufacturers

China has been the world's largest manufacturer of solar panels since 2008 and, since 2011, has produced the majority of global photovoltaics on an annualized basis. Industry projections estimated that, by the end of 2017, China would have enough manufacturing capacity to produce 51 GW of PV modules per year, an amount over twice as large as 2010's global production of 24 GW.

The industry is dominated by several major manufacturers. They include CHINT Group Corporation, JA Solar Holdings, Jinniu Energy, Suntech Power, Yingli, China Sunergy and Hanwha SolarOne. Large debt challenged several manufacturers in 2016.

On July 29, 2024, The New York Times reported that wholesale prices had fallen by nearly half in 2023 and by another 25% in 2024, but Chinese manufacturers were still competing for customers at prices far below cost while continuing to build more factories. By 2025, the industry had overcapacity and price wars. As a result, five leading optoelectronic companies had accumulated losses exceeding 28.9 billion yuan (US$4.15 billion) by 2025.

Concentrated solar power

Solar resource

China has large potential for concentrated solar power (CSP), especially in the south-western part of the country. The highest daily mean values of direct normal radiation are found in the Qinghai-Tibet Plateau and Sichuan Basin, at 9 kWh/m2. Most of northern and western China has daily average direct normal radiation over 5 kWh/m2, considered the limit for economical use of CSP. Practical limitations for deployment of CSP include mountainous terrain and distance from energy load centers, mostly concentrated in the east.

Public policy

The 12th five-year plan, for 2011 to 2015, called for the installation of 1,000 MW by 2015, and 3,000 MW of CSP plants by 2020. However, at the end of 2014, only several demonstration stations were operational in the country. In the subsequent 13th five-year plan a demonstration batch for 20 CSP plants for 1.35 GW was launched, which aimed to bring latest international technologies to China and build a domestic CSP industry. Plants were located in different provinces and used several different routes, including parabolic trough, central receiver towers and a novel beam-down tower design. The initially target for 2018 could not be met and deadlines were extended multiple times, and the initially planned second batch was canceled. At the end of 2021 the installed capacity stood at 550 MW. Chinese industry has gained considerable experience in the molten-salt storage technology and operating results of the plants are promising and meet their design parameters.

In the current 14th five-year plan there is no federal support for CSP. However, several provinces including Gansu, Qinghai, Xinjian UAR and Jilin have announced CSP projects in the context of the storage and peak shaving legislation. Optimistic assessments suggest that several GW could be built in the next five years.

Solar water heating

China is the leading country for solar water heating capacity in the world, with 290 GW_th in operation at the end of 2014, accounting for about 70% of the total world capacity. In terms of capacity per unit of population, China comes 7th in the world with 213 kW_th per 1,000 people. Most of the installed capacity (92%) was evacuated tube water heaters.

Effects on the global solar power industry

The growth of solar power industries worldwide has been rapidly accelerated by the growth of the solar market in China. Chinese-produced photovoltaic cells have made the construction of new solar power projects much cheaper than in previous years. Domestic solar projects have also been heavily subsidized by the Chinese government, allowing for China's solar energy capacity to dramatically soar. As a result, they have become the leading country for solar energy, passing Germany's capacity in 2015. As other countries from around the world look to switch to renewable energy sources, cheap options for solar and wind have become focal points of interest for investments. China's mass production of cheap photovoltaic cells and wind energy have consequently spurred investments in Chinese products from around the world and expanded the construction of solar energy projects worldwide.

As of at least 2024, Chinese firms are the industry leaders in almost all of the key parts of the solar industry supply chain, including polysilicon, silicon wafers, batteries, and photovoltaic modules. China's impact on economies of scale and technological development was an important contributor in the 85% drop in the price of photovoltaic modules from 2010-2020.

Government incentives

The China Development Bank provided $20 billion of financing to domestic solar manufacturers in 2010.

In 2011, new feed-in tariffs were promised to potential solar power developers to help drive investments and growth in the solar power market. The government of Qinghai province offered solar projects that were operational before 30 September, 1.15 yuan ($0.18) for each kWh they produced in May 2011. The National Development and Reform Commission offered same-priced subsidies to potential solar power project operators nationwide. These tariffs were not capped. Other subsidies, such as Top Runner and Poverty Alleviation programs, were used in conjunction with feed-in tariffs to help grow the solar power market immensely. These incentives were more successful in garnering attention and investment to the solar power sector than the Chinese government expected. Consequently, the Chinese government has struggled to keep up with these incentives. The government incentives have also contributed to the curtailment of solar energy, as many of the solar projects have been built in northern and western regions of China where there is a low demand for electricity and a lack of infrastructure to transfer energy towards China's main power grid.

In response to the growing problems of the rapidly expanding solar power market and the need to meet promised subsidies, the National Development and Reform Commission announced in May 2018 that solar power subsidies would be slashed and feed-in tariffs would be significantly reduced in favor of an auction-based system. In 2020, the Ministry of Finance of the People's Republic of China slashed the solar energy subsidy budget down to 1.5 billion yuan ($233 million) from 3 billion yuan in 2019. With the auction-based system, companies are to submit subsidies bids for solar power construction projects to the National Energy Administration. Companies that do not partake in competitive bidding must instead accept a largely reduced amount of subsidies for projects that are already in operation while new projects do not receive any subsidies outside of auctions. The switch to the auction system and capping of subsidies was designed to alleviate costs of solar subsidies and is attributed to the decline of the growth of the Chinese solar market in 2018 and 2019. However, the auction system has made renewable energy in western provinces cheaper than thermal energy in some cases, with Qinghai observing periods of time in which all of its energy usage was supplied through renewable energy.

China's budget for renewable energy subsidies was increased to 6 billion yuan for 2021, with solar power receiving 3.38 billion yuan. These grants are set to be distributed to 14 provinces, with Inner Mongolia receiving the majority of the funding with 5.10 billion yuan. The price guarantee ended in June 2025.

The government subsidies for solar power energy projects have been considered "unsustainable" as the costs of subsidizing a rapidly growing industry are massive and some of China's struggles dealing with the costs have become visible. The renewable energy fund, which is paid by consumers, has a 100 billion yuan deficit while tariff payments have occasionally been paid late. Government subsidies for solar power have also been attributed to over construction, as many solar power projects have been funded by the Chinese government but are curtailed (they do not operate at full capacity) due to the inability to transfer the full energy capacity from production sites.

Environmental impact

Solar cell production pollution

Chinese green energy companies such as Luoyang Zhonggui High-Technology Co. in Henan have become large producers of polysilicon in response to growing the demand for solar cells. However, polysilicon production produces silicon tetrachloride as a byproduct. Silicon tetrachloride is a poisonous material that can make soil infertile and harm humans if it is not disposed of properly. In developed countries, silicon tetrachloride is recycled and reprocessed, preventing the substance from entering the environment. However, special technology and large amounts of energy are required to reprocess silicon tetrachloride. Chinese green energy companies have not invested in recycling this byproduct, instead opting to lower production costs and dump waste into nearby residential areas. This lack of investment into environmental safety protocols has also been attributed to Chinese factories attempting to open much sooner than it would take normally.

Some solar cells are also made with chemicals such as sulfuric acid and phosphine gas as well as metals such as lead, chromium, and cadmium. These chemicals and metals are toxic to humans through contact and contamination of resources. While many developed countries that produce photovoltaic cells have properly disposed of or repurposed wasted solar cells, many Chinese firms have not adopted the practice recycling solar panels and waste. Non-hazardous materials have also been dumped instead of repurposed, further contributing to waste.

Various protests over solar cell production pollution have been staged. In Zhejiang province, protests over the destruction of fish habitats emerged in September 2011. Hundreds of villagers rioted in the Zhejiang Jinko Solar Co., Ltd. factory, which produces photovoltaic cells and wafers. The factory had previously failed pollution tests in April and that its waste control was inadequate despite warnings from the local environmental protection bureau. The protests occurred over multiple days, in which company property was damaged and destroyed.

Climate change contribution

China has pledged to peak its carbon emissions by 2030 and has invested into renewable sources of energy, including solar power, to help meet this pledge. China has been opening new plants for solar energy production. Critics of China's climate policy argue that China is not trying to replace fossil fuels with renewable sources of energy, but instead trying to increase the energy capacity of both forms of energy. Although China's solar energy capacity has increased dramatically in recent years, its carbon emissions have risen as well. Consequently, critics have seen China's pledge to peak its carbon emissions as a time window for it to increase its carbon emissions rather than reduce them, with its investments into renewable energy sources such as solar power being used as a coverup for China's plan to continue expanding with fossil fuel-powered production.

The mass government subsidy-fueled construction of solar power plants has also been linked to climate change contribution as mass construction has contributed to increases in carbon emissions while the energy produced by the projects has not been fully used.

Green grabbing

China's expansion of solar power capacity has been met with criticism over implications of "green grabbing". Critics argue that China has seized land from native populations and repurposed it for its own projects, such as solar farms, using the need to protect the country from climate change as a justification for land seizure. Renewable energy projects, such as solar power plants, have been built in western regions of China where many native nomadic people have had their land taken away. As such, critics argue that investments into renewable energy sources such as solar power are means to increase the power of the central state rather than protect the environment. This argument has been complemented by China's expansion of fossil fuel plants in conjunction with solar energy.

Following claims of China has taken land from rural natives under the guise of climate protection, many rural populations have been encouraged to move to government housing or urban centers. However, as expectations for the arrival of urban citizens have risen, so has the construction of buildings infrastructure projects. This speculation of the growth of urban centers has led to a housing bubble in China, where buildings and infrastructure are being constructed at a rate in which much of the construction is unused or redundant. As these unused buildings and towns are constructed, more carbon emissions are produced due to the usage of cement and other building materials. Thus, China's "green grabbing" has also been criticized by environmentalists who see China's urban expansion as useless and damaging to the environment. The forced movement of rural populations, as critics claim that these rural populations do not receive adequate compensation for removal and face discrimination and a lack of support to thrive in urban centers in contrast to citizens who have lived in urban centers throughout their lives.

Curtailment

The high amount of government incentives has encouraged the mass development of solar projects, especially in the northern and western regions of China. Consequently, there has been mass investment in energy production in low-population regions where energy usage is relatively low and not enough investment in infrastructure to transfer this produced energy to China's main power grid. This has caused the curtailment of solar energy to which critics point out to argue that many of China's heavy investments in renewable energy are inefficient and will become unsustainable for the country in the future. This inability to transfer energy to regions that require it has led many critics to call for China to invest more into power transfer infrastructure instead of solely energy capacity. Although curtailment rates have lowered since 2016, dropping down from 17% to 7% in 2016, some critics argue that these rates are still too high. Critics have used solar power curtailment as an example to argue for China to change its methods for dealing with the climate crisis as they see that its current efforts are ineffective.

International relations

China's production of cheap photovoltaic cells has been the target of a large amount of criticism due to claims of forced labor being used to drive production costs down. Reports of large Chinese solar manufacturing companies using forced labor from Uyghurs of Xinjiang to produce photovoltaic cells have appeared. Reports for forced labor being used to acquire polysilicon, a key component of solar panels, have also emerged. Although the Chinese government claims that the labor used for material acquisition and production is voluntary, reports claim that there is substantial evidence that Uyghur laborers have been coerced to produce solar panels, threatened by internment camps. As the demand for solar power increases due to climate change, the cheap nature of Chinese photovoltaic cells has resulted in China's solar exports growing massively in recent years in spite of the labor used in production. The usage of forced labor in China has only been partially condemned globally, in part due to the fact that many countries depend on China's cheap labor and photovoltaic cells to afford the transition from thermal energy to renewable energy. Since China is responsible for 80% of the world's polysilicon production, with half of the world's polysilicon produced in Xinjiang, many critics of the forced labor usage have stated that it is difficult for many countries to avoid Chinese made solar power solutions. As a result, debates over whether or not solar energy components from China should be used have arisen.

U.S. sanctions

In June 2021, the United States Department of Commerce placed five Chinese solar companies, including Daqo New Energy, on the Bureau of Industry and Security's Entity List. An extensive questionnaire was sent to companies by US Customs and Border Protection in early 2024. The survey indicated Customs taking a strong enforcement approach that will be difficult to answer for small/medium-sized solar companies without stable supply chains.