China’s solar dominance shines bright in energy development

Beijing is projected to exceed its target of 200GW additional solar and wind capacity this year.

CHINA continues to lead the world when it comes to renewable energy development with 386,875 megawatts (MW) of operating solar farms as of June 2024, data from the Global Energy Monitor (GEM) showed. This is over half of the global operating capacity of 755,144 megawatts (MW).

One thing that other countries can learn from China in this regard is the importance of long-term planning and developing policies that attract and encourage investment.

“The key thing behind this success, in my personal view, is a long term strategic plan,” Ember Senior Electricity Policy Analyst Muyi Yang told Asian Power.

Yang stressed that what is seen of China’s RE development is an integrated strategy and plan. “It combines industrial policies, economic incentives and energy policies,” Yang said.

Aiqun Yu, research analyst and senior East Asia strategist at GEM, noted that China has 180 gigawatts (GW) of utility-scale solar and 159 GW of wind power under construction as of March 2024, which is almost twice as much as the rest of the world’s output.

“This is a strong indication that China will continue leading the world on renewables development in the near future,” Yu told Asian Power in a separate interview. “The government planned to add 200 GW wind and solar capacity in 2024, a slowed growth rate compared to 2023. But likely this governmental goal is going to be exceeded.”

Solar boom

Between March 2023 and March 2024, GEM said China installed more solar power than it had in the previous three years combined, and more than the rest of the world combined for 2023.

Yu said one of the factors driving this expansion in solar energy is the booming distributed solar in the eastern and central areas.

According to GEM, nearly half of the distributed solar added in 2023 was installed on residential rooftops, largely driven by China’s “whole country solar” model. Shandong is leading Chinese provinces in terms of distributed solar with 40,988 MW, whilst Xinjiang topped the list for utility-scale solar with a capacity of 38,020 MW.

Thanks to energy policies Chinese authorities are implementing, the East Asian superpower is able to achieve this expansion in solar capacity, Yang said.

“In the energy sector, there has been [an] long term plan for renewable capacity uptake, and this gives a very clear indication for potential investors that this is the niche domestic market for solar capacity,” he explained.

China offers feeding tariffs, tax benefits, and various other incentives to support the installation of solar panels.

“China has introduced successful industrial policies to help build an ecosystem that involves the whole supply chain for manufacturing solar technology,” he added.

Possible challenges

Whilst China is seen to continue leading the solar sector, there are still a few hurdles it may face, one of which is adapting its coal-centred grid to its renewable surge.

Yu told Asian Power that in the North and Northwest China, power transmission bottlenecks the renewable growth, causing curtailments. The grid in some central and eastern areas is being overwhelmed by the distributed solar addition, especially the rooftop solar, resulting in some restrictions, she said.

Yang agreed that grid integration will be a major challenge. A major upgrade and augmentation in the distribution system is needed in order to support further expansion of the sector, specifically distributed solar, he said.

In building solar energy facilities, developers usually need large parcels of land. But with the rising urban development, and demand for agricultural land, expanding solar capacity may be challenged, Yang said.

Building more offshore or floating solar projects is an option, which is already being explored by Chinese authorities, he said.

The expert also noted how weather dependent solar energy is. When there's too much sunshine, we store the energy in by using battery storage,” Yang said. “But for this to happen, we need to build more battery storage.”

What nations can learn from China

“In the near future, we don’t see any slowdown; and we project this year, and likely till 2030, it will keep the pace similar to this year,” Yu said.

For Yang, it is important to see the impact of clean energy efforts. “Transition is beneficial and to realise the benefit promised by the transition, the first thing is that we have to turn climate ambitions, or climate aspirations, into actual progress,” he said.

“China’s experience also suggests that we need an integrated long term plan and strategy,” he added.

He said national utilities can also provide support in the development of renewable projects, which will also allow them to diversify their portfolio.

“One example is provided by China,” said Yang, pointing out how all major state-owned enterprises in the generation segment are encouraged to diversify into renewable energy projects. “Actually, they have been the main investors in renewable energy projects in China.”

Meanwhile, Yu said it is never too late for other countries to have technology renovation and to catch up with China.

“When China started, there was already this technology, but China made it not in a level of technology, but in the implementation, how much they make it commercialised,” she said.

She said making renewable energy development a national energy security priority is another important lesson other countries can learn from China.