China’s Spending on Green Energy Is Causing a Global Glut
The country’s massive funding of renewables has drawn odd newcomers and led to an oversupply of solar components
4 min
China’s newest solar-energy manufacturers include a dairy farmer and a toy maker.
The new entrants are examples of a green-energy spending binge in China that is fueling the country’s rapid build-out of renewable energy while also creating a glut of solar components that is rippling through the industry and stymying attempts to build such manufacturing elsewhere, particularly in Europe.
Since the start of the year, prices for Chinese polysilicon, the building block of solar panels, are down 50% and panels down 40%, according to data tracker OPIS, which is owned by Dow Jones.
Inside China, some companies fear a green bubble is about to pop.
China’s state-guided economy spent nearly $80 billion on clean-energy manufacturing last year, around 90% of all such investment worldwide, BloombergNEF estimates. The country’s annual spending on green energy overall has increased by more than $180 billion a year since 2019, the International Energy Agency says.
The rush of funding hasattracted an unusual array of companies to the bustling business.
Last summer, Chinese dairy giant Royal Group unveiled plans for three new projects. There was a farm with 10,000 milk cows, a dairy processing plant and a $1.5 billion factory to make solar cells and panels.
“The solar industry is improving over the long term, and the market potential is huge,” Royal Group wrote in a document outlining the project last year. More recently, Royal Group said it wants to create synergies between its core agricultural business and photovoltaics, “and promote solar technology to empower dairy owners to reduce costs and increase efficiency,” the company said in a response to The Wall Street Journal.
The milk manufacturer wasn’t alone in jumping on China’s solar bandwagon in the past two years. Other newbies include a jewelry chain, a producer of pollution-control equipment and a pharmaceutical company.
The newcomers are helping an ambitious wind and solar push in China—this year alone the country is set to install roughly as much solar as the U.S. has in total, Rystad Energy estimates.
Meanwhile, Chinese exports of everything from batteries and electric vehicles to solar panels and wind turbines have surged, raising hackles in places such as Europe and the U.S., which are trying to grow their own domestic clean-energy manufacturing.
In solar, the investment is an important reason for the huge oversupply of components, and falling prices that are pummeling profits at manufacturers around the world. Many established Chinese solar companies are warning that the fallout could be grim, with losses or bankruptcies looming.
“The entire industry is about to enter a knockout round,” said Longi Green Energy Technology, one of China’s biggest solar-manufacturing companies, in its half-year financial report in August.
At least 13 companies, including Chinese industry leaders such as Jinko Solar, Trina Solar and Canadian Solar, have put capacity expansion plans on hold, according to TrendForce, a Taiwan-based market intelligence firm.
Many Chinese manufacturers have been trying to unload inventory at bargain prices in Europe, one of the few big solar markets without tariffs or other barriers to panel imports. While European solar developers are delighted, the region’s already hard-pressed manufacturers are crying foul.
Some European producers were already struggling with homegrown challenges such as slow permitting, a lack of skilled labor and high energy costs, making it difficult to compete with Chinese counterparts.
The oversupply was exacerbated by barriers to imports in India and the U.S., which threw off Chinese manufacturers’ forecasts and left their panels languishing in ports and warehouses. The U.S. proved particularly unpredictable with the threatened imposition of antidumping duties and the implementation of the Uyghur Forced Labor Prevention Act, which ended up preventing panels made with Chinese polysilicon from entering the country.
The Chinese solar-manufacturing industry has gone through booms and busts before and had its share of odd new entrants. Tongwei Solar began as a fish-feed supplier that acquired a solar-panel maker during the downturn of 2013 to complement its aquaculture business with solar parks. Tongwei is now the largest polysilicon maker in the world.
This time, more than 70 listed companies—ranging from fashion, chemicals and real estate to electrical appliances—have entered the solar sector in 2022, according to data intelligence company InfoLink.
In February, Zhejiang Ming Jewelry, which runs 1,000 gold jewelry stores in China, announced plans to invest $1.5 billion to build a solar-cell factory. Last August, toy maker Mubang High-Tech announced a joint venture with the local government for a $660 million solar-cell production base.
Supply-chain disruptions from the pandemic squeezed inventories and pushed up prices in previous years. European solar buyers ordered large amounts of panels as they became available, while many Chinese manufacturers overestimated demand, said Matthias Taft, chief executive of BayWa r.e., Europe’s biggest solar distributor.
“We and others ordered massively” during the second half of 2022, he said.
The recent drop in solar prices meant Chinese panels are selling for around half of manufacturing cost for members of Europe’s solar-manufacturing industry association, said Johan Lindahl, the group’s secretary-general. Around 40% of the panels manufactured this year by members who responded to the association’s survey were languishing in inventory.
One Norwegian producer of solar wafers, a key panel component, went bankrupt in August. Its sole remaining European rival, NorSun, stopped production in recent weeks because its customers—mostly European solar cell and panel manufacturers—weren’t able to sell their products, said Carsten Rohr, NorSun’s chief commercial officer.
At this rate, Europe’s dependence on Chinese solar is increasing rather than decreasing, said Gunter Erfurt, chief executive of Swiss solar cell and panel manufacturer Meyer Burger. The company has opted to postpone its planned European expansion and instead ship the manufacturing equipment to a new factory in the U.S., which has offered big government subsidies to solar manufacturers.
Market watchers say the oversupply may work itself out faster than expected, because some companies are likely to cancel or postpone expansion plans and others are retiring old factories in favor of new ones.
Still, some Chinese industry executives such as Liu Yiyang, deputy secretary-general of the China Photovoltaic Association, are calling for local governments to tap the brakes on green-tech investment.
In January, the Shenzhen Stock Exchange issued a letter of concern to Suzhou Shijing Technology, known for its pollution-control equipment. The exchange asked Shijing from where it was drawing its investment capital of $1.5 billion to build a solar-cell factory. The company’s total assets are valued at only $450 million.
In its reply, Shijing said 60% of the investment would be provided by the local government, including building the factory infrastructure and dormitories as well as granting equipment and electricity subsidies.
When asked about the progress of the solar project, Shijing referred to its public statements. In the latest quarterly report in October, the company noted it was proceeding in an orderly manner.
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Relationships get complicated when one spouse retires and the other keeps working
4 min
When one spouse retires but the other doesn’t, roles change and feelings get complicated.
David Buck, 60, stepped back from a long career in sales management just as his wife, Susan Rose, 58, an ordained minister, leaned in, working 40-plus hours a week.
They’ve had to rethink who does what at home. David now folds more of the laundry and takes on grocery duties. He also has freedom, which Susan sometimes longs for. He talks about going to visit their adult children, who live out of state. Their first grandchild is on the way.
“I do get jealous. I have a couple more years,” Susan says.
Most couples now retire at di’fferent times , research suggests.
Only 18% of retired households claimed Social Security at the same time, according to a review of Federal Reserve data conducted by the Center for Retirement Research at Boston College.
A separate poll found that just 11% of couples retire at the same time. Nearly two-thirds stagger their retirement by at least a year, according to a survey of 1,510 couples ages 45 to 70 commissioned by Ameriprise Financial, a financial services company.
Timing two retirements
The timing of retirement is often out of a couple’s hands. Nearly one-third of retirees surveyed left the workforce unexpectedly due to layoffs and early retirement packages. Health is also a factor.
Women, who often leave work to care for older parents or in-laws, retire at younger ages, averaging 62 compared with 65 for men, according to the Center for Retirement Research. A younger spouse may continue working to keep family health insurance until Medicare kicks in, or to delay having to tap retirement savings. They may want to hold off collecting Social Security to get higher payments.
Some people simply want to keep working even if their partner doesn’t. Living on one paycheck can be scary for people used to having two, no matter how much money couples have.
When couples retire at different times, routines, schedules and expectations diverge, and tensions can surface. Assumptions arise over who should clean or make dinner. The still-working partner may feel a twinge of envy when the other one heads to the beach or visits grandchildren.
“There can be resentment. This is the time people have been dreaming about,” says Pepper Schwartz, emeritus professor of sociology at the University of Washington who focuses on relationships.
Other couples are wary of their partner retiring and being around all the time. “They dread too much togetherness,” says working filmmaker Sharon Hyman, 61, who lives separately from her retired partner of 25 years.
Navigating new routines
David Brown, 70, and Beth Keenan-Brown, 64, planned to retire together. Last year, Beth left her nursing job and David retired from the Secret Service. They made plans to travel to Budapest and spend more time at their beach house.
Shortly after Beth retired, she received a dream job offer and returned to work full time, as director of clinical operations for a Maryland hospice agency. Now she spends the week in their Severna Park, Md., home, which is larger and has space for a home office, while David stays at their beach home in Delaware, where he bikes and volunteers with Meals on Wheels. They travel back and forth.
“It’s a challenge keeping our calendars straight,” says David.
Beth logs her meetings on a joint Google Calendar so David knows when not to call. Every morning, they FaceTime over coffee and talk about their plans. On Wednesdays they each get takeout from the same type of restaurant, recently Ethiopian, and eat together over a video call.
There are upsides, too. They have made two trips since she took her new job, one to Costa Rica and the other to the Netherlands, thanks to her added income. Beth has unlimited paid vacation with her new job.
She says it would be hard if they were still in the same house and she was working while he was retired. “I think I would drive you nuts,” says Beth, adding that she is younger and has more energy than David.
“I just can’t keep up with you,” says David, who had a stroke a few years ago and needed to slow down.
Tough choices, new roles
Jeni Mastin, 74, of Vancouver, British Columbia, retired a decade ago from a career in nonprofits and social work. Her partner, Cameron Hood, is still working as a musician, teaching music and performing jazz.
“I’m an artist. I imagine I will be working until I drop dead,” he says.
Their different schedules and responsibilities have led to some inconveniences. Earlier this year, Jeni planned a monthlong 65th birthday celebration for Cameron in Mexico. They cut it a week short because of his teaching job. Cameron’s work schedule also means that he can’t always go with Jeni to her doctor’s appointments. His substitute teaching job ends at 3:30 p.m. and there’s an hourlong commute.
David Buck and his wife, Susan Rose, the minister, are navigating the transition in Ponte Vedra Beach, Fla.
David, who describes himself as “semiretired,” continues to advise some clients of his time-management consulting business. Susan logs more than 40 hours a week doing two part-time jobs, one as transitional pastor at a local church and the other at a nonprofit she formed to mentor women in ministry.
David has picked up more responsibilities at home, taking on tasks that Susan did before she began working more and he semiretired. He takes their cars in for maintenance and balances the checkbook.
“If the dogs need to go to the vet, that’s me,” says David.
Susan says she has a hard time letting some things go. “I will say, ‘I can go to the grocery store on the way home,’ and Dave will say, ‘Stop. I can go to the grocery store. Tell me what we need,’ ” she says, although he tends to pick up snacks and cookies that she wouldn’t buy.
It has been an adjustment for David, too.
Being semiretired, he says he sometimes forgets about the demands of a job, especially one in ministry where congregation members have needs outside of 9 to 5. She might call and say her meeting went longer than expected. “Then I’m sitting there thinking, ‘I got dinner about ready. What am I going to do now?’ ” he says.
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Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
