China Is Pumping Out Solar Panels, Creating Global Gut and Tanking Prices

Fences covered in solar panels are also starting to take off in the UK, North America and Australia.

“Why put up a fence when you can just put up a bunch of solar panels, even if they’re not exactly oriented toward the sun?” Martin Brough, head of climate research at BNP Paribas Exane, told the FT.

The global supply of solar panels is expected to reach 1,100 gigawatts by the end of this year, three times more than demand, the International Energy Agency wrote in a report released in January.

Prices on the spot market have already fallen by half in 2023 and are expected to fall another 40% by 2028, the agency added.

China’s grip on the solar panel market is now in a state of oversupply, meaning manufacturers elsewhere – such as the United States and Europe – are unable to compete effectively.

The oversupply of cheap Chinese solar panels is on US Treasury Secretary Janet Yellen’s radar as she travels to China on Wednesday to meet with senior Chinese officials. The visit, which is expected to end on Tuesday, is his second trip to China in the past 12 months.

“During her engagements in China, Secretary Yellen will advocate for American workers and businesses to ensure they are treated fairly, including by pressuring their Chinese counterparts on unfair trade practices and highlighting the global economic consequences of Chinese industrial overcapacity,” Treasury said in a press release. press release Tuesday announcing Yellen’s visit.

Last week, Yellen said at a Suniva solar cell factory in Georgia that she was “concerned about the global fallout from the excess capacity we’re seeing in China” that is now hitting new energy industries like solar. , electric vehicles and lithium-ion batteries. .

Beijing defends what it calls “three new” industries solar, electric vehicles and lithium-ion batteries to stimulate its economy. China is struggling to emerge from its dependence on the real estate sector, now mired in a debt crisis.

“China’s overcapacity distorts global prices and production patterns and harms American businesses and workers, as well as businesses and workers around the world,” Yellen said, adding that she would raise the issue of overcapacity during his next trip to China.

“I will express my belief that excess capacity poses risks not only to American workers and businesses and to the global economy, but also to the productivity and growth of the Chinese economy,” Yellen added.

Chinese manufacturers are also feeling the consequences of solar panel overcapacity.

Last month, Longi Green Energy Technology, the world’s largest solar cell maker, announced it was laying off thousands of workers due to overcapacity and low prices.