China is the world leader in terms of the pace of renewable energy development. For instance, the country accounted for 46% of the capacity of wind and solar generators put into operation worldwide in 2022 (a total of 123.1 gigawatts (GW) out of 266.2 GW, according to IRENA). The development of the industry is facilitated by the domestic resource base: the United States Geological Survey estimates that China accounted for 68% of the global production of silicon, a key element of solar panels, in 2022, and also ranked second (14%) and fourth (9%), respectively, in the production of silver and copper, which are used in solar panels as well.
Another driver is the shrinking gap between conventional and renewable energy in terms of costs. IEA estimates that the cost of bringing 1 kilowatt (kW) of solar panels into operation in China was $720 in 2022, whereas the same indicator for onshore wind generators, combined cycle plants and coal-fired TPPs stood at $1,100, $560 and $800, respectively.
Finally, the development of technological competencies, which allows Chinese companies to dominate the entire solar panel production chain, is also a factor. According to S&P Global Platts, the world’s ten largest producers of polycrystalline silicon in the first three quarters of 2023 included seven companies headquartered in China. Moreover, the top ten of the largest manufacturers of silicon plates and cells was represented solely by Chinese companies, with nine such companies listed in the top ten for module manufacturers.
At the same time, the industry continues to be characterised by high concentration: in the first three quarters of 2023, the top ten companies accounted for 90.2% of the global production of polycrystalline silicon, whereas the top ten producers represented 97.0% in the silicon plates segment, as well as 84.8% and 81.0% in the segments of cells and modules, respectively. Therefore, the influence of Chinese companies in the solar energy market is comparable to the role of the largest suppliers of smartphones and mobile devices.
