How China’s solar panel price war could drive renewable energy installations globally
- Leading Chinese solar panel makers Longi Green, TCL Zhonghuan and Tongwei cut prices by as much as 27 per cent last month due to falling raw material costs
- Europe is expected to benefit significantly from cheaper solar prices as the continent diversifies energy sources to deal with reduced gas supplies from Russia
A slump in solar panel prices in China, the world’s largest producer, is expected to stimulate demand globally, particularly in Europe, which is facing an unprecedented energy crisis, according to analysts.
Amid falling costs of the key material, polysilicon, due to excess supply, leading Chinese manufacturers Longi Green Energy Technology, TCL Zhonghuan and Tongwei Solar slashed prices by as much as 27 per cent, the China Silicon Industry Association said last week.
Slowing demand due to the surge in Covid-19 cases that has affected solar power installation, and excess supply at the year-end, have prompted some manufacturers to cut prices, the association said.
“The increasing cost competitiveness of solar power generation, driven by expanded production and upstream cost reduction, will help promote renewable energy across the world,” Shanghai-based brokerage firm BOCI Securities said in a recent report.
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China makes and supplies more than 80 per cent of the world’s photovoltaic panels, according to the International Energy Agency. The country is set to add at least 570 gigawatts (GW) of wind and solar power in the 14th five-year plan period from 2021 to 2025, as it strives to achieve its carbon neutral goal by 2060, when non-fossil fuel sources will account for 80 per cent of its total energy mix.