To avoid a global climate catastrophe we need to triple the amount of global renewable energy by 2030. About half of this is expected to come from solar. And, since 2006, the solar panels China has produced account for 70-80% of the total, global GW of the installed capacity today. But China is also getting the most pushback from the US and Europe. What’s happening here? Why is China leading and why, given the crisis we are in, do some see that as a problem? Tune in this episode of In Fact with Kyle Obermann. #InFact
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00:00To avoid a global climate catastrophe, we need to triple the amount of global renewable energy by 2030.
00:06About half of this is expected to come from solar, and since 2006, the solar panels China has produced
00:12account for 70-80% of the total global gigawatts of installed capacity today.
00:18But China's also getting the most pushback from the U.S. and Europe.
00:22So what is happening here?
00:24Why is China leading, and why, given the crisis that we are in, do some see that as a problem?
00:44China leads the global solar supply chain.
00:47The top 10 suppliers of solar manufacturing equipment are also Chinese companies.
00:52Almost all of the world's silicon wafers, the most important part of solar panels, come from China.
00:57This means that China has a vast superiority when manufacturing solar at scale and cost.
01:04So Chinese panels are 35-50% cheaper than those made in Europe, and the quality is comparable, sometimes even better.
01:12This has its roots in the 90s and early 2000s with China's privatization of industry and WTO admittance.
01:18These events triggered Chinese exports to become more cost-competitive,
01:22and European nations like Germany to invest by bringing entire production lines into the country.
01:27And in 2005, China passed its Renewable Energy Act, which mandated the purchase of renewable energy and connection to the grid.
01:35Five years later, the government elevated solar to the status of strategic necessity
01:40and began to channel subsidies, as its Western neighbors had, into the industry.
01:46Fast forward to today, and in the first half of 2023 alone, China's solar exports surpassed the total installed capacity of the U.S.
01:54Half of these exports went to Europe, and almost all of Europe's newly installed solar came from China.
02:00And last year, the EU installed record levels of solar capacity, 40% more than in 2022.
02:06It would have been very difficult to get to this level today without China, that is for sure.
02:12Even the drop in manufacturing costs that we are seeing outside of China, be it in the U.S. or Europe,
02:18is also largely driven by China and Chinese sort of developments within different PV technology.
02:27So the supply from China has been a boon for households and other power users looking to
02:32turn away from fossil fuels at a low cost. It's also increased jobs.
02:36European solar employment rose by 24% last year, mainly due to installation demand.
02:42But the supply and cost of Chinese solar in Europe has also led to pushback from
02:46some European governments and businesses who feel like they can't keep up.
02:50For European manufacturers, it's impossible to compete with the cost of production as for their Chinese counterparts.
02:58There's just no way.
02:59But the EU hopes to change this, aiming to raise the percentage of solar manufactured in Europe
03:04from the 3% it is today to 40% by 2030.
03:08And the price difference between China and European panels have reached its peak.
03:12But the 12 billion euros in funding provided by the EU's Net Zero Industry Act
03:17still lags behind the amounts provided by the U.S. and China.
03:21This also has many in the EU worried for one big reason, energy security.
03:26It's an issue that worried Europe in the last half century
03:29and pushed the continent to adopt solar earlier than anyone else.
03:32And the war in Ukraine has reminded Europe just how vulnerable it is to global shifts or conflict.
03:40So while many households get cheaper clean energy and the solar jobs market continues to grow,
03:45the current market concerns leaders and industry experts in Europe.
03:49And there's a severe competition between the Chinese manufacturers.
03:52So and all of them need to sell something to have cash, even if they sell with losses.
04:00But in the long run, an industry need to be sustainable and make money.
04:07Otherwise, we will have this kind of bubbles and they burst and everything is delayed, etc.
04:13Dr. Lindel and Marius agree.
04:14We are entering a consolidation phase in the solar industry,
04:17which will see global manufacturers out of business.
04:20But on the flip side, the fierce competition that got us here has also accelerated innovation.
04:26Chinese companies lead the world in solar technology patents,
04:29holding over twice the amount of any other country.
04:32And when it comes to overcapacity, a peer-reviewed study released a few years ago
04:36even argued that given the intermittency of sunshine,
04:39overcapacity by a factor of three was critical for making solar actually work.
04:45But limited grid capacity in Europe, combined with high interest rates that discourage investment,
04:50are leading to a surplus of Chinese solar panels stockpiled around the world, especially in Europe.
04:55Getting connected to the grid if you're a utility-scale developer now is difficult.
05:00So if you're now in Europe, you might have to wait years to get your project approved
05:05through permitting until it's actually connected to the grid.
05:08So Europe is in a bind.
05:09Nations desperately need to cut emissions,
05:11but they aren't able to install and connect solar to the grid fast enough.
05:15It's a problem that is marred in economics, geopolitics,
05:18energy security, human rights, protectionism, and quite simply, a lack of time.
05:25But the world would not have installed so much solar today without China.
05:28And this vital role that Chinese panels play for climate goals probably isn't going away.
05:33But with the right policies and investment,
05:35European solar can play a greater role than we desperately need to accomplish,
05:40pushing renewable capacity to triple before 2030.