China's solar technology is changing Africa's energy mix faster than expected

A pattern is emerging on the African continent that places economic logic ahead of geopolitical preference: more and more states are relying on solar technology from Chinese production for their energy expansion.

The reason lies less in political orientation than in price. Sonia Dunlop, CEO of the Global Solar Power Association, speaks of a „solar revolution“ currently spreading across the continent.

Two strategies, one market

The USA is pursuing an energy policy focused on fossil fuels under the slogan „drill, baby, drill“.

China, by contrast, officially describes its course as „path to light“, a formulation for accelerated renewable energy expansion. For African governments that must make investment decisions, the cost comparison becomes the decisive factor.

Chinese manufacturers have invested massively in solar module and battery technology in recent years. The economies of scale resulting from this continuously reduce acquisition costs for solar systems.

For countries with limited budgets and often lacking grid infrastructure, this is a key argument, regardless of foreign policy considerations.

Decentralized solutions for a still young electricity grid

Many African states do not have comprehensive electricity grids like European countries. This opens a structural advantage for solar technology: systems can be installed decentrally without first having to build expensive transmission networks. Combined with falling battery prices, this also makes power supply to remote regions economically viable.

This development runs parallel to China's Belt and Road Initiative, within which numerous infrastructure projects in Africa have been financed in recent years. Energy projects are a growing part of the portfolio, although current demand for solar technology is also driven by private and municipal actors independent of state-controlled major projects.

Cost advantage as a decision basis

Industry observers point out that the price decline in photovoltaic modules and storage technology has been considerable in the past five years.

Chinese manufacturers such as Longi, JinkoSolar or Trina Solar are among the world's largest producers and are increasingly supplying African markets. For governments choosing between coal, gas, or solar projects, the calculation is increasingly shifting in favor of renewable options.

At the same time, the USA remains an actor in the African energy market with its focus on fossil energy sources and corresponding export interests. The competition between the two approaches is increasingly not decided solely politically, but by market prices.

For European and Austrian companies in the solar and storage industry, this development has direct market relevance. Austrian companies such as Fronius, a manufacturer of inverters based in Pettenbach, or Kioto Photovoltaic are active in international supply chains where they compete with Chinese providers for market share, also outside Europe.

The European photovoltaic sector also sources a significant portion of its solar cells and modules from China, which indirectly makes price developments in the African market relevant for the cost structure of European providers as well.

According to the International Energy Agency, around 80 percent of globally installed solar module production capacity came from China in 2023, a share that significantly influences pricing at the global level, including European procurement markets.

Source: China – South China Morning Post | Original Article