The solar energy sector in China is on a tear–so much so, in fact, that the country is now the largest renewable energy investor, Time Magazine reports.
According to the publication, the Chinese government has made a pledge to spend $360 billion on clean energy projects by 2020, with solar panels being developed for deserts, among others, to withstand “sultry” rainforests.
“China is leading the way in terms of finding green solutions,” Wu Changhua, the Greater China director for the Climate Group told outlet.
Not only that, but China is expected to produce up to 25 percent more solar panels in 2017 than the previous year, with help from domestic sales and demand from the US and other emerging markets, Reuters stated.
With US President Donald Trump announcing his plans to withdraw the US from the Paris Climate Agreement on June 1, China’s surgence in the solar energy industry is hardly surprising.
Case in point, a week after the Paris Agreement, energy ministers in Beijing met–which Time reported had been scheduled before the Paris Agreement–wherein a number of initiatives to further the clean energy industry were announced, together with partnerships with other governments all around the world to fight climate change.
Rick Perry, energy secretary, allegedly said the US will continue to lead in the clean energy sector, but challenged China to fulfill the obligations it has put forth.
“I hope China will step in and attempt to take the mantle away,” Perry was quoted as saying. “It would be a good challenge for them.”
To that end, China is nonetheless prepared to take on that challenge: Bloomberg also reported that the country is on pace to implement “record amounts” of new solar in 2017, after adding 24 gigawatts of capacity in the first half of the year. Should they maintain the same pace as the first half, it’s expected they will surpass the estimated 30 gigawatts of solar capacity that was added in 2016.
The publication continued, highlighting that the country’s additions in the first half of 2017 alone equal, or amount to more than half of the installed solar base in the US at the end of 2016.
“Natural demand is ramping up along with declining solar costs and the improved returns of power stations,” Alex Liu, China utilities and renewable energy analyst at UBS Securities, said in a note.
Similarly, the Reuters article stated that China had 102.82 gigawatts installed of solar capacity by June, putting it closer to its target of 110 gigawatts by 2020.
Wang Bohua, secretary general of China’s photovoltaic industry association, told Reuters that there is “great potential” for the country’s solar industry to develop, “as the Paris Accord has set a firm foundation for solar power.”
With that in mind–overall global investments in the renewable energy sector are unsurprisingly expected to catapult in the next couple of decades, which goes to prove just how important this sector is. As reported in Bloomberg’s “New Energy Outlook 2017,”with declining costs of wind and solar power, renewable energy will hold the majority of the projected $10.2 trillion in investments up to 2040. Of that amount, solar power will hold up to $2.8 trillion of investments.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.