China has turned solar power into a strategic industry on a scale no other country has matched, reshaping both the economics of clean energy and the geopolitics of the energy transition. In a few years, it has moved from fast follower to the central hub of the global solar supply chain, from raw materials to rooftop panels.
That dominance is now so entrenched that efforts by rivals to catch up look less like a race and more like damage control, as governments scramble to secure their own energy futures without being locked into a single supplier.
From national priority to global manufacturing machine
China’s rise in solar started as an industrial policy bet and has ended up as a near monopoly in key parts of the value chain. Backed by state-directed finance, cheap land and infrastructure, and a vast domestic market, China built factories for polysilicon, wafers, cells, and finished modules at a speed that rivals could not match. Analysts now describe a system in which it controls almost every step of solar manufacturing, supported by a deep pool of technically trained workers and dense industrial clusters that keep costs low and innovation cycles short.
That strategy has delivered a decisive lead. One detailed account of How China Took describes how the country moved systematically up the value chain, from assembling imported components to mastering upstream materials and equipment. The result is a manufacturing ecosystem that is not just large, but integrated: suppliers, logistics, and skilled labor are concentrated in a few regions, giving Chinese producers a structural cost advantage that competitors in Europe, the United States, and elsewhere struggle to replicate.
Scale that dwarfs the rest of the world
The numbers behind China’s solar buildout are staggering. One widely cited assessment finds that China is on track to hold over 80% of global solar manufacturing capacity through 2026, a share that effectively makes it the default supplier for much of the world. A related analysis notes that this represents capacity roughly 17 times larger than the rest of the world combined, underscoring how far ahead Chinese firms have pulled in the race to build factories and secure market share.
That dominance extends across the supply chain. A separate report from Wood Mackenzie concludes that China will control over 80 percent of the world’s production of polysilicon, wafers, cells, and modules from 2023 to 2026, effectively dominating the entire chain from raw silicon to finished solar panels. Another industry briefing projects that China will hold more than 80 percent of global solar manufacturing capacity, with India forecast to overtake Southeas Asian countries as the largest producer outside China, but still far behind the Chinese lead.
Cost advantage built on materials, scale, and policy
China’s grip on solar is not only about volume, it is about cost. Analysts point to a combination of strong state support, low-cost financing, and industrial clustering that has driven down the price of panels and components. One detailed climate and energy analysis notes that China has a big cost advantage in clean energy manufacturing, with the combination of strong state backing and industrial scale allowing it to produce key technologies at prices that undercut rivals. That cost edge has helped flood global markets with cheap modules, accelerating solar deployment but also squeezing manufacturers elsewhere.
Control of critical materials amplifies that advantage. Every gigawatt of solar power deployment requires around 15,000 to 20,000 tons of ultra-clear silica-based glass, and China dominates this segment too, backed by significant investments in beneficiation processes and glass production. At the same time, the domestic market is booming: one market study on China Solar Energy describes a study period from 2021 to 2031, highlighting how rapid capacity additions at home reinforce the economies of scale that keep Chinese exports cheap even as trade barriers and tariffs rise.
Deployment at home, disruption abroad
China is not just exporting panels, it is installing them at a pace that has no precedent. One widely shared engineering analysis notes that China has achieved a staggering milestone by installing more solar power in a single year than every other country in the world combined, an energy feat unmatched in history. Another market-focused report says China installed a record-setting 277 g of solar capacity in 2024, a figure that captures both the scale of domestic deployment and the pressure it has put on global supply and pricing.
That surge has had destabilizing side effects. As factories kept expanding, module supply outstripped demand and prices collapsed, leaving the solar industry “bleeding out” even as installations soared. In response, the Chinese government has tried to tackle module oversupply by pushing up the price of solar components and encouraging manufacturers to charge more, an effort to stabilize a sector that has become both a national champion and a source of financial strain heading into 2026.
Backlash, tariffs, and the new energy security politics
China’s dominance has triggered a wave of defensive policy in other major economies. One detailed investment-focused analysis describes how a section titled Escalating Tariff Spiral captures the response: Chinese batteries and BESS now face a 34% immediate duty, rising to 82% by January 2026, with Southeast Asian producers also pulled into the net. A related section framed around “Impact: Cost vs. Control” notes that investors who are Interested in solar must weigh the benefits of cheap Chinese supply against the risk that this cost advantage comes with strings attached, from trade disputes to sudden policy shifts.
Other governments are explicitly treating solar manufacturing as a strategic asset. One policy review of Strategies other nations are adopting notes that the United States, India, and members of the European Union are folding solar manufacturing into national security strategy, using subsidies, local-content rules, and procurement policies to build their own capacity. India in particular is highlighted as a rising player, with some forecasts suggesting that India could overtake Southeas Asian countries as the leading non-Chinese manufacturing base, even if it remains far behind China’s scale.
