absorb

In early 2026, the closure of the Strait of Hormuz shook energy markets. Consumers, frightened by the volatility of fossil fuels, looked in all directions for alternatives. What they found was a disconcerting paradox: the planet had—has—a historic surplus of clean, cheap energy. There was no shortage of solar panels. There were plenty of them. And no one really knew what to do with them. Economist Adam Tooze summed it up bluntly in his column Financial Times: “Clean energy, on a scale that would have seemed utopian at the time of the Paris Agreement in 2015, is now within our reach. The price of solar panels has plummeted. And yet factories are paralyzed.” It’s not rhetoric. It’s a diagnosis. After a huge increase in investment since 2020, Chinese companies reached a production capacity of 1,000 gigawatts of solar panels per year. To get an idea: in 2023 global demand was only 451 GW, according to Energy News. Chinese production of solar cells that year—588 GW—already doubled international demand. And they continued building. The result was what economists call “involution”: a spiral of destructive competition where companies destroy each other with none winning. More than 40 Chinese manufacturers have gone bankrupt, been acquired or delisted. A third of the staff of the surviving big five were laid off. JinkoSolar, the world’s largest supplier, registered in 2025 a drop in revenue of 29%, a drop in gross profit of 86% and net losses of 4.45 billion yuan. In this way, in June of last year, more than 30 manufacturers They agreed to an OPEC-style pact to stabilize prices and curb supply. Six months later, the result was a disaster: far from stabilizing, production reached historic highs, installations tripled and losses continued to accumulate. “Since when are solar panels just another commodity? They are a technological miracle. They make us cultivators of the sun,” details Adam Tooze in his column. And in all that time, the price of a solar module fell to $0.10 per watt, according to EnkiAI —well below the $0.16/W production cost of the most advanced TOPCon modules. It is, strictly speaking, the largest climate technology sell-off in history. This is not a steel crisis. It’s something else When economists talk about Chinese overproduction, the debate usually revolves around steel, cement or electric cars. But Tooze makes a distinction worth hearing: Solar panels are no ordinary commodity. They are the result of half a century of research—from NASA spinoff programs in the 1970s to the big energy push of the Carter era—and, along with batteries, they are the master key to a sustainable future. Wasting that surplus is not just an economic problem. It is a civilizational irrationality. According to the OECD, China invested less than $18 billion in sector support over 15 years to build an industry capable of providing more clean energy than the world can easily absorb. That figure is less than the cost of building a medium-sized international airport in Europe, or what the US spent on a single Gerald Ford-class aircraft carrier. The concentration of power in the supply chain is also unprecedented in the history of energy. China controls more than 80% of the entire global solar production chaindirect result of the plan Made in China 2025 with which Beijing decided to stop being the world’s cheap factory and become its technological supplier. By the end of 2025, its operational module capacity exceeded 900 GW, several times the total global demand. The five largest Chinese manufacturers concentrate more than 50% of the market. LONGi Green Energy alone shipped more than 45 GW in 2025 – more than the entire US domestic manufacturing capacity (73 GW). Never in the history of energy has a single nation so completely dominated a key technology for the decarbonization of the planet. Not even oil at its peak. And the climate paradox is painful: since the Paris Agreement of 2015, a scale of deployment like the current one would have seemed like science fiction. The goal was to stop global warming. The instruments to do so are manufactured and stacked in warehouses. What fails, Tooze points out, is coordination: what Keynes would call a global “chaos,” a catastrophe of collective planning. The global bet Chaos has its own correction mechanisms, even if they are painful. In China, the crisis has already forced the Government to act a few months ago, Beijing called for ‘concerted efforts’ to end price war. The proposed measures include capacity control, minimum guideline prices, mergers and acquisitions, and intellectual property protection “to promote the high-quality development of the photovoltaic industry.” In practice: the Chinese State orchestrating an orderly rescue of the sector that it itself encouraged to grow without limits. The consolidation had already started before. In August of last year, several players in the sector launched a plan for large manufacturers to jointly invest $7 billion in buying and closing the least efficient facilities, according to OilPrice.com. In practice, a cartel to stop the bleeding. Prices already reflect the shift. According to ABC SolutionsChinese modules have risen between 10% and 20% in 2026 due to the adjustment of overproduction and new logistics tariffs. Wood Mackenzie forecasts a further rise of 9%. The window for the big bargain is closing, although prices remain historically low. The critical variable for 2027 is how the surplus is resolved: through orderly consolidation or through new business disruptions. Meanwhile, Chinese foreign business continues to boom. As Tooze points out in the FTexports of Chinese solar technology to virtually every country except the United States are skyrocketing. And manufacturers have evolved: they now integrate batteries into systems to offer greater stability to the grid, pushing the product towards the complete solution instead of the isolated module. Storage batteries, which They have also reached historical lows in cost Pushed by the same dynamic of overproduction, they thus complete the package: panel plus storage, at a knockdown price. Domestic demand will also recover. China exceeded 1,230 GW of installed solar capacity … Read more