Under its 13th Five Year Plan, China will nearly triple solar capacity by 2020, adding 15 to 20 gigawatts of solar capacity each year for the next five years, according to Nur Bekri, director of the National Energy Administration. That will bring the country’s installed solar power to more than 140 gigawatts.
To put that in context, world solar capacity topped 200 gigawatts last year and is expected to reach 321 gigawatts by the end of 2016.
In 2015, the country added more than 15 gigawatts of new solar capacity, surpassing Germany as the world’s largest solar power market. China now has 43.2 gigawatts of solar capacity, compared with38.4 gigawatts in Germany and 27.8 in the United States.
China is also the world’s largest carbon emitter. It burns more coal than any other nation, and its solar capacity is only a small fraction of its total energy portfolio. The National Energy Administration estimates that nearly one-third of solar capacity in Gansu province, and more than one-quarter in Xinjiang, was idle last year.
China’s stated goal in adding such gargantuan amounts of solar is that it wants to meet its targets for reducing emissions of greenhouse gases under the Paris climate accord. Also, China’s leaders are desperate to reduce the coal-fired air pollution that renders the air in big cities like Shanghai and Beijing virtually unbreathable.
And China’s massive solar panel manufacturing sector needs new markets for its products. Patrick Jobin, an analyst at Credit Suisse, said that a solar panel glut could hit the sector this year as China’s top three producers, JA Solar, JinkoSolar and Trina Solar, continue to ramp up production despite flattening international demand.
“We believe solar manufactures face an exacerbated, oversupplied environment in 2016,” he wrote.
So the central government’s bold plans could be a strategy for soaking up the excess supply.