In a relatively small and mountainous county in southern China, Wang Rongshuo’s company is playing a pivotal role in an ambitious new-energy plan that aims to install solar panels on most rooftops, potentially changing the face of the county’s power landscape for decades to come and power to drive economic growth.
As one of China’s 676 designated pilot sites last year in a national rooftop-solar-power campaign, Guangning county – in western Guangdong province – is setting up a photovoltaics infrastructure system that it expects will generate millions of kilowatt hours worth of electricity annually for the county’s more than 400,000 people. The nationwide initiative will span several years and cost hundreds of billions of yuan, creating lucrative opportunities for companies such as Wang’s that are keen to cash in on the country’s thirst for power at a time when all major economies are pushing to achieve decarbonisation goals. Cracks in China’s property market have investors, businesses and authorities all hoping that the new-energy sector will serve as a viable engine for economic growth. Illustration: Lau Ka-kuen Cracks in China’s property market have investors, businesses and authorities all hoping that the new-energy sector will serve as a viable engine for economic growth. Illustration: Lau Ka-kuen In a relatively small and mountainous county in southern China, Wang Rongshuo’s company is playing a pivotal role in an ambitious new-energy plan that aims to install solar panels on most rooftops, potentially changing the face of the county’s power landscape for decades to come. As one of China’s 676 designated pilot sites last year in a national rooftop-solar-power campaign, Guangning county – power to drive economic growth, in western Guangdong province – is setting up a photovoltaics infrastructure system that it expects will generate millions of kilowatt hours worth of electricity annually for the county’s more than 400,000 people. The nationwide initiative will span several years and cost hundreds of billions of yuan, creating lucrative opportunities for companies such as Wang’s that are keen to cash in on the country’s thirst for power at a time when all major economies are pushing to achieve decarbonisation goals. Why is China facing a power crisis, and what does it mean for the economy? The shift toward sustainable solar energy is nothing new in China – such projects have become increasingly common across the country in recent years. But the pace appears to be picking up rapidly, and it comes as occasional power shortages are taking a heavy toll on China’s economy and its people’s livelihoods.
In fact, more than half of all solar panels installed across the country in 2021 were on rooftops, according to the National Energy Administration. “You can see large-scale solar panel projects springing up everywhere – from deserts in barren provinces to fish ponds, orchards, hillsides, commercial and industrial building rooftops in the most affluent provinces,” said Wang, who founded Yangshuo Lujian Technology, a Guangdong-based new-energy-facility installer. As the overall investment sentiment in China has been greatly dampened by the economic downturn, power to drive economic growth, Beijing’s restrictive zero-Covid policy and regulatory uncertainties, the new-energy industry – which includes solar photovoltaics – has remained one of the very few bright spots in China’s economy, attracting an abundance of investment capital. Unlike the centralised power-generation format – with electricity produced in a large plant and offered to consumers via a power grid – distributed solar-power-generation projects such as the one in Guangning are installed closer to the end users, who can use the power directly and even sell the surplus back to power companies. Unlike the centralised power-generation format – with electricity produced in a large plant and offered to consumers via a power grid – distributed solar-power-generation projects such as the one in Guangning are installed closer to the end users, who can use the power directly and even sell the surplus back to power companies. Copious amounts of capital are pouring into the new-energy infrastructure sector this year, especially for solar power – either in the distributed or rooftop format,” Wang said. Such projects have also become a bit of an investment darling among local-level authorities whom the central government has tasked with boosting their respective economies. “New-energy infrastructure projects are most welcomed by local governments and banks now, as they are a safe and politically correct choice for lending,” said Aron Lin, an actuary with a private bank in Guangdong.
And thus, many local authorities, in addition to investors, are pinning their hopes on the sector becoming a new engine for China’s economic growth, especially as another major engine – real estate – has been a drag on the economy over the past year, following a regulatory crackdown by Beijing. “To drive the economy, a more probable alternative [to property] might be the manufacturing sector power to drive economic growth,, as China is striving to be strong and comprehensive rather than just big in the sector,” said Ding Shuang, chief Greater China economist with Standard Chartered Bank.“In terms of specific manufacturing industries,” he said, “some of them are relatively clear, especially those related to new energy, where China should have some obvious advantages now – including new-energy vehicles (EVs), photovoltaics and wind power.” However, some analysts are questioning whether all of these new-energy industries, combined, might be able to offset China’s real estate woes and indeed become a real economic engine for the country. For now, the outlook is marred by external uncertainties in a time of rising geopolitical tensions, as the future growth of China’s new-energy industries is expected to rely heavily on external demand. Around the world, governments are increasingly viewing clean energy as an economic boon, especially after the United States invested heavily in a smart energy grid as part of its efforts to revive the US economy in 2009 after the financial crisis, according to Hou Yunhe, an associate professor with the Department of Electrical and Electronic Engineering at the University of Hong Kong (HKU). But the industry has developed at a much faster pace in China over the past two decades, thanks to the permissive environment and heavy subsidies that create a more accessible market for Chinese manufacturers, while their Western counterparts must comply with stricter employment and environmental regulations. “Photovoltaic is an energy- and labour-intensive industry,” Hou said. “The only technical barriers are just about improving efficiency and reducing costs. But now, in China, thanks to the scale effect, solar power is already as cheap as thermal power.” And it has become one of the very few industries in which China has nearly a total monopoly in the global market.
Source: This news is originally published by scmp