Winston Mok

The View | China’s solar power prowess can truly shine in energy-starved Africa

The US market may be closed to it but China can shape development in Africa – as a developer and operator of solar energy projects

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A technician examines solar panels on the roof of a company in Nairobi, Kenya, on September 1, 2023. In South Africa and Kenya, where outages are common, solar energy is being used to power major businesses. Photo: AP

Winston Mok

Published: 4:30pm, 9 Jul 2024

Compared to electric vehicles (EVs), China’s production overcapacity in solar panels may be more glaring. The country commands 80 per cent of the solar photovoltaic (PV) value chain and its five-fold expansion in module manufacturing capacity during 2022 and 2023 precipitated a 40 per cent price decline last year. Long before the US moved to lock out Chinese EVs, it had imposed heavy tariffs on Chinese solar panels – in 2012.

But the industry’s supply-demand balance must be understood in the context of its sustained high growth.

The last shakeout in China’s industry kicked off in 2013 when Suntech Power Holdings defaulted on its bond payments, later becoming bankrupt. Since then, demand has exploded. The global installed capacity for solar power has expanded about tenfold and is expected to double in the next three years. Now, any excess production capacity can reasonably expect to be digested. In a reverse of market dynamics, demand will expand to meet ever cheaper supply.

This is because solar power benefits from a powerful positive feedback loop. As solar panel deployment increases, economies of scale kick in, driving down manufacturing costs. These lower prices make solar energy more accessible and attractive, boosting demand. Increased demand fuels more investment and innovation, making solar technology even more efficient and affordable. This self-reinforcing cycle propels the exponential growth of solar power.

Given solar power made up less than 6 per cent of global electricity generated last year, the greatest growth is still to come. Solar power is expected to generate more electricity than gas-fired power plants in 2030 and coal-fired ones by 2032 – and could become our biggest electricity source in a decade.

But two key obstacles stand in the way of even faster adoption of solar power: storage and long-distance transmission.