China now holds an unparalleled amount of market dominance in the solar panel industry, which has resulted in an excess of solar panels available on the international market. In nations like Germany and the Netherlands, solar panels are now so inexpensive due to the surplus that it has caused a considerable drop in price.
Solar panels are typically mounted on rooftops in order to effectively gather sunlight. However, many are discovering that using solar panels as fencing material is more cost-effective due to the abundant supply coming from China, which is driving down prices. Solar panel-covered fences are becoming more and more common in the UK, North America, and Australia, where this trend is also starting to take shape.
The issue of an oversupply of solar panels arises mainly because of China’s strong manufacturing output. In fact, they have even surpassed 80% of the global production capacity. According to the International Energy Agency, global supply is expected to reach 1,100 gigawatts by the end of this year, whereas demand will be three times lower. Therefore, spot market prices were already cut in half since 2023 and are projected to fall further by up to 40% by 2028.
US Treasury Secretary Janet Yellen discussed the matter during her visit to China. On a global level, this oversupply has created apprehensions. In her statements, Yellen highlighted Chinese overcapacity that affects industries like solar, electric vehicles, and lithium-ion batteries, bringing out the important aspect of fair trade practices.
Chinese manufacturers are also not spared from the effects of overcapacity. Just this month, Longi Green Energy Technology, the biggest solar cell maker globally, has laid off a few employees due to overcapacity and low prices.
China’s economy is being driven by industries such as solar and electric vehicles, therefore the global market will have to figure out how to deal with the problems caused by this excess supply. In the future, the stability and expansion of the renewable energy industry will depend heavily on sustainable policies and fair trading practices.
