The Gulf war won’t save it
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A S AMERICA’S WAR on Iran roils energy markets, China’s clean-energy companies should be cashing in. The country makes over 80% of the world’s solar panels, churning them out in vast quantities. Thanks to such efforts, renewable sources generated more electricity than coal last year around the world. Yet China’s solar industry, though world-beating, is in turmoil. And the war will not be enough to steady it.
China’s solar exports have seen a boost since the bombing began. But that will be small cheer to its companies, as they face three daunting problems. Domestic demand for their products is falling for the first time in decades because the country’s power grids—far and away the biggest market for solar panels—have become overloaded with the things. Solar-panel supply, meanwhile, is overabundant because of years of splashy investment in factories. And protectionism in overseas markets is rising. These problems also converge at an ugly time. Most companies have been running at a loss since 2024 owing to brutal price wars, and bankruptcies are mounting. After blistering growth the world’s solar factory now faces a reckoning.
The solar industry globally has not always been kind to investors. One solar panel is much like another, and improvements made by one producer are rapidly copied by competitors. So companies typically try to scale up as quickly as possible to seize market share. That means production can race far ahead of demand, causing margins to collapse. This tendency led to a lurching downturn in revenues in 2018, for instance, followed by a rebound after demand caught up.
But the current slump is of a different order. The main market for solar panels has always been within China, and roll-out has been so fast in recent years that it is outpacing the ability of the power grid to absorb it. All across the country, roofs, hills and deserts are carpeted with dark grey silicon. To keep the lights on, China has historically relied on coal-fired power, which can be turned on and off as needed. Solar panels work only when it is sunny, which can lead to power shortages at night and excesses during the day. As a result, in January and February about 9% of China’s solar generation was wasted, up from 6% in the same period last year.
Chart: The Economist
That all makes it hard to justify adding much more. Installations this year could fall by between 24% and 43% from 2025, according to an industry group (see chart). That would be enough to cause global demand for solar panels to fall in 2026 for the first time in two decades, says Bloomberg NEF, a consultancy. For China’s grid to cope it needs to be able to store excess solar power or move it long distances to where it might be needed. That requires big investments in batteries and power lines, as well as figuring out flexible market mechanisms to co-ordinate everything (in some regions long-term contracts for coal-fired power lock out renewables even though they are cheaper). All this is happening, helped by the fact that batteries, like solar panels, are becoming much cheaper as production of them increases. But it takes time. That means that even if solar installations start rising again next year, growth will probably be much slower than before.
Meanwhile China’s solar companies are struggling with a glut of supply. Frenzied investment has left them able to produce over 1,000 gigawatts (GW) of solar-panel capacity in a year. That is far more than the already whopping 600 GW that were installed worldwide in 2025 and probably more than the global market will ever be able to soak up, reckons Jenny Chase of Bloomberg NEF. “We’re running out of big countries that don’t already have a lot of solar at this point.”
Solar manufacturers have been calling for “self-discipline” to ease overcapacity. Last year some tried to co-ordinate production quotas and set floors for the cost of panels. It has proved hard, however, for them to work together. Only weeks after the agreement was in place one firm was publicly castigated for breaking it. Then in January officials said they were concerned that the group could become a cartel.
Officials are also keen to trim the bloat, however, as it is a problem across China’s clean-energy industries. The government once lavished support on solar manufacturers in all sorts of ways, from cheap land to interest-free loans. Now it has largely stepped back. Since June last year new solar projects have had to sell power at market prices rather than enjoying guaranteed feed-in tariffs. And a big reason for the export surge in March was that companies were cramming in shipments before April 1st, when they would stop enjoying a tax refund on exports. In recent months some Chinese local governments have even started demanding that solar companies return millions of yuan in subsidies, preferring to see them go bankrupt rather than to prop up failures.
Geopolitics, meanwhile, could bring more clouds over the horizon. Cheap Chinese solar panels have been a victim of their own success, sparking protectionist backlashes in both Western countries and neighbours including India. Since 2022 America has imposed tight restrictions on imports, as well as hefty tariffs on the shipments that get through. Some also worry that Chinese-made power infrastructure could pose a security risk; in May the European Union said it would phase out Chinese suppliers of inverters, a key piece of solar equipment, in EU -funded projects. Some Chinese companies are trying to outsource production abroad to avoid such political headaches.
It all makes for a gloomy outlook. More than 40 Chinese solar firms have gone bankrupt, been acquired or delisted from stock exchanges since 2024. One-third of the workforce of the country’s five biggest firms has been laid off, according to Reuters, a news agency. But the biggest wave of consolidation has yet to break, says Jessica Jin of S & P Global, a research firm. Solar-panel prices have nudged up in recent months, but they still sell for below their average production costs. The share prices of LONG i Green Energy Technology, Tongwei, Jingko Solar and Trina Solar, the biggest producers, are all hovering well below half their peaks of a few years ago.
Could anything bring back solar’s golden days? It would certainly help if countries lifted their trade barriers to Chinese goods. And another lifeline for China’s industry might be the commercialisation of technologies that dramatically increase solar panels’ efficiency (these days most convert 22-24% of the light that falls on them into electricity; more advanced kinds of solar cells called perovskites could push that rate above 30% while, in theory, being cheaper to produce). The question is just how many of China’s solar firms will survive to see such advances. ■
논증 분석
유형: diagnosis
핵심 주장
세계 최강의 중국 태양광 산업은 내수 감소, 공급 과잉, 해외 보호주의라는 세 가지 구조적 문제가 동시에 수렴하며 전례 없는 위기에 처해 있으며, Iran과의 전쟁으로 인한 에너지 시장 혼란도 이를 구제하기에 충분하지 않다.
논리구조
- 전제: China는 세계 태양광 패널의 80% 이상을 생산하며, 재생에너지는 2025년 전 세계적으로 석탄보다 많은 전력을 생산했다. 그럼에도 불구하고 China의 태양광 산업은 심각한 위기에 처해 있다.
- 진단: China 국내 태양광 수요가 수십 년 만에 처음으로 감소하고 있다. 전력망이 태양광으로 과부하 상태가 되어 2026년 초 태양광 발전의 약 9%가 낭비되었으며, 2026년 설치량은 2025년 대비 24~43% 감소할 수 있고, Bloomberg NEF에 따르면 전 세계 태양광 패널 수요가 20년 만에 처음으로 줄어들 수 있다.
- 진단: 수년간의 과잉 투자로 연간 1,000GW 이상의 생산 능력이 형성되었으나, 이는 2025년 전 세계 설치량(600GW)을 훨씬 초과하며 Bloomberg NEF의 Jenny Chase에 따르면 글로벌 시장이 영원히 소화하기 어려운 수준의 공급 과잉 상태다.
- 진단: 해외 시장에서 보호주의가 심화되고 있다. 미국은 2022년부터 강력한 수입 제한 및 고율 관세를 부과했고, European Union은 태양광 인버터에서 중국 공급업체를 단계적으로 배제하고 있으며, India 등 인접국도 보호주의 조치를 취하고 있다.
- 논거: 태양광 산업은 구조적으로 규모 경쟁에 취약하여 생산이 수요를 앞지르면 마진이 붕괴되는 경향이 있다. 2018년에도 유사한 침체가 있었으나 현재의 침체는 그보다 훨씬 심각하다.
- 논거: China 정부는 태양광 기업 지원에서 대폭 후퇴했다. 2025년 6월부터 신규 태양광 프로젝트의 발전차액지원제도(feed-in tariff)가 폐지되었고, 수출 세금 환급도 종료되었으며, 일부 지방정부는 보조금 반환을 요구하고 있다.
- 논거: 기업들의 자율 규제 시도(생산 쿼터 조율, 패널 가격 하한선 설정)가 실패했다. 합의 직후 한 기업이 이를 위반하고 공개 비난을 받았으며, 당국은 해당 협의체가 카르텔이 될 수 있다는 우려를 표명했다.
- 논거: 2024년 이후 40개 이상의 중국 태양광 기업이 파산, 인수 또는 상장폐지되었으며, 5대 기업의 인력 3분의 1이 감원되었다. LONG i Green Energy Technology, Tongwei, Jingko Solar, Trina Solar의 주가는 모두 최고점 대비 절반 이하에 머물고 있다.
- 반론: Iran과의 전쟁으로 중국 태양광 수출이 일시적으로 증가했으나, 이는 구조적 과잉 공급과 국내 수요 감소를 해결하기에 충분하지 않다.
- 처방: 태양광 산업 회복을 위해서는 배터리·송전선 투자 및 유연한 전력시장 메커니즘 구축을 통한 그리드 문제 해소, 각국의 무역 장벽 완화, 그리고 효율 30% 이상의 페로브스카이트(perovskite) 태양전지 등 차세대 기술의 상용화가 필요하다.
결론
China의 태양광 산업은 내수 포화·공급 과잉·보호주의라는 복합 위기로 전례 없는 구조 조정 국면에 직면해 있으며, 기술 혁신과 무역 장벽 해소 없이는 과거의 고성장을 회복하기 어렵고, 얼마나 많은 기업이 그 전환점까지 생존할 수 있을지가 핵심 과제다.
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