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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Mirzaian is a senior director within CBRE’s Development NSW business, operating across the company’s Western Sydney and North Sydney offices
Singapore’s Formula 1 weekend has always looked different. Held beneath floodlights on the Marina Bay Street Circuit, the race transforms the city into a nocturnal spectacle of speed, heat and saturated colour. It is this distinctive atmosphere — and one of Singapore’s most important natural symbols — that has shaped IWC Schaffhausen’s latest motorsport-inspired watch. …
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Randy Boyagoda’s new novel, “Lords of Serendipity,” delivers a biting satire of cheating, politics and dysfunction across modern universities.
5 min
Administrative cowardice. Rampant cheating. The soaking and scamming of undergrads and grad students. Performative wokeism. Intensifying competition for international tuition dollars from an expansive China.
These are either the latest dire headlines about American higher ed or the myriad subplots of “Lords of Serendipity,” an ambitious new novel by Randy Boyagoda. Unlike most campus fiction, its scope extends well beyond the cloister of the liberal arts classroom to whammy the entire university system, from its financial model to its function within a globalized economy. Along the way, it skewers its lightning-rod targets with a precision too sharp to be considered entirely fictional.
That its author is not only well-versed in satire, having written four other novels in the genre, but is also a professor of English at the University of Toronto and an experienced college administrator, further blurs the lines between comic fiction and brutal fact. It’s the kind of no-holds-barred book only a consummate insider would know to write—but only one who is also conveniently outside the American university system could get away with writing.
“This is someone who’s got the inside dope on what can go on at universities, especially with international students, and what kind of con games are going on,” said Margaret Atwood, a friend and fellow Torontonian.
The novel, like Boyagoda himself, is often very funny—even as the dilemmas its characters face read as tragedy. Its cast includes the bickering members of a Sri Lankan hotel cleaner’s family, insecure American freshmen, dead-end third-tier college professors and their highflying Ivy League counterparts and dispirited university functionaries. An old-fashioned Dickensian tale, it sweeps across continents and campuses, from a classic liberal-arts college to a stand-in for Harvard University to an urban technical school to the dilapidated buildings of a state-run university in Sri Lanka.
“I’m a joyful person,” Boyagoda said in an interview, though he prefers to see his outlook on academia as “hopeful” rather than optimistic. He smiles and laughs frequently. He bikes everywhere. He derives energy from his students and from his four daughters, ages 14 to 20. They help him and his American wife, Anna, also an educator, care for Boyagoda’s father, an immigrant from Sri Lanka who has dementia and lives with the family.
The germ of the novel came to Boyagoda during the pandemic, when he was serving as a vice-dean. An urban legend was circulating about a statistics grad student selling passing grades to international students. The cheating scheme itself may well have been apocryphal, but it felt tantalizingly plausible.
“As a novelist, it stayed with me,” Boyagoda said. “Who would sell grades for a stats course? Why would someone buy grades? What’s motivating them? Why wouldn’t the university be doing something about it?” What he didn’t want to do, he explained, was write “another novel about a creative writing professor and his drama with students.”
In addition to writing novels—the first of which was a finalist for Canada’s prestigious Giller Prize; he’s written eight books in total—Boyagoda teaches literature full-time. For his students next semester, kids raised in a purportedly “post-literature era,” he’s assigning three 700-page novels, he noted mischievously, books by George Eliot, Ralph Ellison and Kiran Desai.
On RateMyProfessors, students remark on Boyagoda’s heavy assignments, tough grading and distaste for cellphones, but also hail his “comedy.” When alerted to these reviews, Boyagoda laughed. “Guilty as charged,” he said.
“Randy’s one of those people in academia who is very well educated but doesn’t have an ounce of superiority about him,” said John Irving, who frequently guest lectures in Boyagoda’s classroom. “It’s amazing to see how willing students are to talk in his classrooms, how little afraid they feel of being mocked or put down—he gets complete candor out of them.”
Negotiating competing interests seems to come naturally to him. Like many college campuses, after the Oct. 7 Hamas attack on Israel, the University of Toronto was embroiled in protests, encampments and discord; part of the school’s response was to convene a working group on civil discourse. Boyagoda was put in charge, serving for two years. It’s the kind of thankless task many professors would flee from, but Boyagoda relished the prospect and thinks the group, which is ongoing, made progress.
He has since pivoted to another formidable academic concern: the waning prestige of the humanities. In July, Boyagoda became the director of the Jackman Humanities Institute and special advisor on the humanities to the dean of arts and science. This fall, he is starting a series of gatherings he calls the Dead Book Club. (Dead writers feature heavily among his favorites: St. Augustine, Dante, William Faulkner, Evelyn Waugh, Saul Bellow.)
“The goal is to encourage students to read for its own sake and have conversation for its own sake,” Boyagoda said. “The importance of the humanities will be revealed to those who participate.”
“Lords of Serendipity,” which publishes next week, reflects Boyagoda’s commitment to the pursuit of knowledge: “I’m supposed to say I learn more from my students than they do from me, but no,” Boyagoda said. “I enjoy sharing my excitement and joy about literature and ideas. There are these moments when you are teaching and you can see someone’s face change because they didn’t know something and then they did. That moment when you’re actually watch someone enlarge themselves is deeply satisfying.”
In literary circles, Boyagoda is often referred to as a Catholic novelist, a description he embraces. “A novelist willing to give shape and voice to contemporary religious experience is needed,” Boyagoda said. “I understand myself as a Catholic novelist, provided that I’m not only a Catholic novelist, I’m also a South Asian novelist and I’m a Canadian novelist. I don’t want to be captive to one label.”
His characters, he said, are subjected to what he calls “Graham Greene character situations.”
“They are trying to do good in a fallen world and realize the most they can do is less harm than someone else would do in that same role,” he explained. “They have to accept they are complicit in something that provides some good thing to others. It’s a very Graham Greene way of thinking about sacrifice.”
The campus green they inhabit is a febrile zone in which lofty ideals and cynicism regularly collide. It’s a place where a traditional holiday college celebration is now an occasion for political protest. Kids freely police one another inside and out of the classroom with social media their constant, ready weapon of choice. International students, knowing their family’s financial futures hinge on their degrees, operate in terror of failure and deportation.
Early readers of the book include Gary Shteyngart and Junot Diaz, both of whom have taught at universities and written comic novels. They each contacted Boyagoda midway through to say, in essence, “You nailed it.”
As biting as “Lords of Serendipity” can be, Boyagoda’s faith in higher education remains undaunted.
“It’s absurd that we live in societies that make the decision to take people between the ages of 18 and 22, when they are most physically capable of contributing to our nations and communities, and tell them, ‘Go away for four years, and read and learn and have conversations,’” he said. “I want students to be aware of what an incredible privilege that is.”
Corrections & Amplifications
Randy Boyagoda is a special advisor on the humanities to the dean of arts and science at the University of Toronto. An earlier version of this article incorrectly said he is a special adviser to the dean of humanities. (Corrected on Sept. 2)
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