Global News

China's 'four-year spree energy spree' has not only eclipsed the entire US power grid. It is even worse: China's solar industry's capacity reached levels capable of satisfying global demand roughly twice over, according to figures from late last year.

And this is only solar. China is also the world's largest producer, importer, and consumer of coal. The country burns 56% of the world's coal, has tripled consumption since 2000 and is building coal plants at the fastest pace in the last decade.

China not only increases its coal dependence but is also building solar panels it cannot use, in part because the Chinese grid is still unfit. Issues such as curtailment, where solar energy production has to shut down due to grid limitations, have become an obstacle China hasn't yet solved.

As Morningstar reports,

China's solar-capacity factor ... stood at just 14.7% in 2023, compared with 23.3% in the United States.

And it's getting worse. In 2024, solar capacity grew by 45% while generation increased only 28%. Do the math and the implied capacity factor drops toward 11% or 12%. IEEFA data shows utilization hours collapsed from 1,030 in 2020 to just 473 in 2024.

That means that roughly five-sixths of the time China's solar installations sit there doing nothing. They are the world's most expensive decorations - a clean-energy Potemkin village stretched across the provinces.

China is building solar capacity faster than it can use it, faster than its grid can absorb, faster than any economic logic would justify. The result is panels producing power that nobody can buy, connected to a grid that cannot handle the load.

But the Chinese government has been up to sustain investment growth at any cost to compensate for the decline of the country's troubled property sector and stalling domestic consumption. So China built new factories not just in solar, but also in electric cars and batteries.

Similar as in these other industries, the policy led to fierce price wars in Chinese solar markets and to an overcapacity that is now desperately seeking its solution in export markets. But despite huge state subsidies, more than 40 Chinese solar manufacturers have already gone bankrupt or halted production since 2024. One-third of China's 121 listed solar producers are operating at a loss with China's top four solar manufacturers - Longi Green Energy, Jinki Solar, JA Sola, and Trina Solar - collectively lost $1.5 billion in the first half of 2025 alone.

Chinese solar companies have already responded by laying off a third of their workers, according to a Reuters analysis of company filings.

Yet the headline tells you of a thriving Chinese renewable energy industry.

I could continue this for a long time, but I don't want to overdo it. The linked reports make an excellent read, though, and you'll find more across the web.

Some say that exceptionally low prices help accelerate solar adoption to save the climate, but this is short-term thinking imo. In the long-term it is much better if we develop diverse suppliers working across different supply chains to reach a more stable, fast, and - above all - just energy transition.