Why does China make nearly all the solar panels & batteries? and so cheap?
You might have seen in the papers recently that despite record economic growth both China and India reduced the amount of energy produced from coal Coal power generation falls in China and India for first time since 1970s | Energy industry | The Guardian
And you might have wondered where do they get the equipment to harvest so much solar energy? The answer is China makes it, and makes it cheap. China produces 3/4 of the world’s batteries.
Why is it so cheap? Spoiler - it is not only by using slave labour.
Acknowledgement: most, well nearly all, the information in this note is from the excellent Hannah Ritchie https://hannahritchie.substack.com/ She is always worth a read.
China’s battery manufacturers are efficient. It takes 50 Chinese workers to product 1GWhr worth of battery power in a BYD factory, 233 in other Chinese factories and 6 times as much in US factories.
Also Chinese processes are efficient, there is less wasted materials or substandard production.
Super-low battery costs: the top two manufacturers in China are in a league of their own
Costs are initially higher outside China, partly due to inherent disadvantages
Yes, there have been, and still is, forced labour practices, exploitation of minorities and discrimination in Chinese supply chains, as there is a Congolese extraction of cobalt. It is all bad.
There are sustainability schemes that assure the silicon supply chain, which are more or less effective, a good summary is in this link https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2024/Sep/IRENA_Solar_PV_supply_chains_technical_ESG_standards_2024.pdf.
Anyone that is buying panels or batteries should make sure that the supplier is covered by a good scheme.
OK, so EU and US manufacturers can learn and get more efficient and close the gap can’t they?
Not really, its cost of energy, largely solar/wind/coal in China, gas/oil/coal elsewhere. It costs $0.02/kWhr of production in China and $0.2/kWhr in Europe.
So, in reality, when you buy solar you will be buying Chinese – just make sure its backed by strong labour rights controls.