What happened? China stops supporting “clean energy”!
China’s renewable energy business has undergone a major change after China lifted its clean energy subsidy measures. Solar panel manufacturers are clutching their heads, prices may drop several times.
The Chinese government recently announced the lifting of clean energy subsidies due to the oversupply of solar panels in China, which is contrary to consumer demand.
Over the past period, China’s renewable energy power plants have expanded significantly. It can be said that it has grown rapidly because the Chinese government has measures to support renewable energy or clean energy in many aspects, including finance.
As a result, in 2024, China broke the record for installing solar power, increasing by 45% from 2023. This means that China currently has a cumulative solar power generation capacity of 887 gigawatts, which is 6 times more than the United States.
Including a cumulative wind power generation capacity of approximately 520 gigawatts, when combined, China’s renewable energy capacity now stands at 1,407 gigawatts, or approximately 40% of China’s electricity generation capacity, which is already more than coal power. China’s goal of producing clean energy The target set for 2030 (1,200 gigawatts) has been achieved by China, six years ahead of schedule.
For this reason, on February 9, 2025, the National Development and Reform Commission (NDRC) and the National Energy Administration of China issued an announcement to reduce subsidies for renewable energy projects.
If the clean energy industry wants to grow in the long term, it must follow the market mechanism to reduce the current overcapacity problem. Incorporating clean energy businesses or industries into the market mechanism will not only help reduce the overcapacity problem, but also help clean energy technologies other than solar and wind power grow.
“It is clear that China now sees enough renewable energy domestically and does not need to support it anymore,” said Yan Qing, an analyst at Clear Blue Market, a Canadian carbon consultancy. However, China is still careful not to let the increase in electricity prices affect end users.
This change could put additional pressure on China’s solar industry, which currently has excess production capacity. It could cause solar panel prices to fall significantly and small manufacturers to go bankrupt.
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