Solar Energy in China

Dennis Chang
December 17, 2017

Submitted as coursework for PH240, Stanford University, Fall 2017


Fig. 1: Solar cell production data by region. [6] (Courtesy of the DOE)

At the moment, coal still makes up the largest part in China's energy consumption, but the Chinese government has started shutting down coal mines while also restricting the construction of new coal power plants. [1] Chinese efforts in renewable energy technologies have increased exponentially in the past several years as the government recognized energy as a strategic sector, adopting new policies and regulations to encourage energy efficiency and renewable energy development and deployment. [2]

China is currently driving the global rise of solar power, using a combination of aggressive government support and entrepreneurialism. China has been training its manufacturing supply chain and banking system on capitalizing the solar industry. During this time, it didnt just transform the solar module manufacturing business, but also developed the worlds largest solar projects. In this process, China has built numerous global solar companies that operate in different segments of the solar value chain. [3] Ultimately, China has become the number 1 Solar cell producer in the world (Fig. 1) at incredible growth rates.

Plans for the Future

Currently, more than 2.5 million people in China work in the solar power sector, as compared to 260,000 people in the solar power sector in the US. [1] China's National Energy Administration established in January 2017 a mandatory target to reduce coal energy consumption, and a goal for clean energy to meet 20% of its needs by 2030 year. [1] To help reach this goal, China pledged to invest $367 billion in renewable power generation, which includes solar, wind, hydro and nuclear, by 2020. [1]

The policy environment for corporate investment in solar photovoltaic (PV) installations is very favorable in China. In August 2013, the government introduced new policies to fuel the growth and distribution of solar rooftop installations, and the central government currently provides 20-year subsidies for distributed PV rooftop projects. Additionally, project owners receive compensation for any surplus power that they generate. [4] Moreover, the National Energy Administration has started to deregulate the electricity market for small distributed solar generation including rooftop PV projects. [4]

Manufacturing and Capacity

China is a major manufacturer and exporter of renewable energy technology, supplying some two- thirds of the world's solar panels. [1] Chinese manufacturing has changed the economics of renewable power around the world, making solar generation cost-competitive (and even cheaper) with electricity from fossil fuels like coal and natural gas. Currently, China boasts the worlds biggest investment in clean energy, motivated partially by the desire to change its air pollution related health and environmental problems. [5]

China's PV installation rates are very high. China added 35 gigawatts of new solar generation in 2016 alone, which is almost equal to Germanys total capacity, just in one year. [5] Every hour, China erects another wind turbine and installs enough solar panels to cover a soccer field, according to Greenpeace estimates. [5] China has more solar installations than any other country, yet all its solar installations together produced just 39.2 million megawatt- hours of electricity in 2015 - 45% of the 87 million megawatt-hours of electricity that was produced that year by China's Three Gorges Dam. [5]

© Dennis Chang. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] S. Pham and M. Rivers, "China Is Crushing the U.S. in Renewable Energy," CNN, 18 Jul 17.

[2] L. Mastny, "Renewable Energy and Energy Efficiency in China: Current Status and Prospects for 2020 ," Worldwatch Institute, October 2010.

[3] J. Ball et al., "The New Solar System," Steyer-Taylor Center for Energy Policy and Finance, March 2017.

[4] "China's Fast Track to a Renewable Future," The Climate Group, April 2015.

[5] B. Gardiner, "Three Reasons to Believe in China's Renewable Energy Boom," National Geographic, 12 May 17.

[6] A. Goodrich, T. James and M. Woodhouse, "Solar PV Manufacturing Cost Analysis: U.S. Competitiveness in a Global Industry," U.S. National Renewable Energy Laboraory, NREL/PR-620-53938, October 2011.