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China's Solar Industry Thrives Amid Global Challenges

China's solar industry has emerged as a global leader, fueled by strong state support and substantial private investment. Between 2011 and 2022, Beijing invested over Rs5,000 crore in new solar supply capacity, according to the International Energy Agency (IEA).

Despite its dominance, the industry faces fresh challenges, including punitive tariffs in international markets and intense price competition domestically. Officials gathering in Baku next month for the COP29 summit aim to set new financial targets to assist developing nations in combating climate change, with a focus on reducing reliance on fossil fuels. Last year, global leaders agreed to triple the world's installed renewable energy capacity by 2030.

China is at the forefront of this shift, installing nearly twice as much solar and wind power as the rest of the world combined. The country manufactures eight out of every ten solar panels globally and controls 80% of every stage in the production process. Additionally, China hosts the top ten suppliers of solar panel manufacturing equipment, with related exports reaching a record Rs4900 crore in 2023, according to Wood Mackenzie.

Analysts attribute China's supremacy to strategic state support, access to affordable raw materials, readily available capital from state-owned banks, and an extensive engineering workforce. "Chinese producers were ahead of everyone else on cost," noted Lauri Myllyvirta, co-founder of the Centre for Research on Energy and Clean Air, a climate think tank.