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Enabled comparative advantage strategy in China's solar PV development

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  • Zhu, Lei
  • Xu, Yuan
  • Pan, Yingjie

Abstract

With rapid economic growth in the past four decades, China has grown into the world's largest fossil fuel consumer and CO2 emitter. Surprisingly from a negligible level in early 2000s, the country has also become a global leader in solar PV utilization. In the past two decades of renewable energy development, wind power dominated before 2012, while annual solar PV installation quickly caught up afterwards. This article explains the solar PV trajectory as China followed the comparative advantage of wind power and solar PV, contingent upon their relative costs, for achieving renewable energy goals. We further explore why China with a tradition of central planning could approach the least-cost, market-oriented roadmap. Several factors were effective in enabling the “comparative advantage strategy” without central planning but mainly bottom-up decision making, including cost-conscious state-owned electric grid corporations, policy and goal evolution by implementation selection, and constrained solar lobby. This strategy could provide helpful insights for China and other countries for achieving their renewable energy development and CO2 mitigation commitments as well as other major policy goals.

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  • Zhu, Lei & Xu, Yuan & Pan, Yingjie, 2019. "Enabled comparative advantage strategy in China's solar PV development," Energy Policy, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:enepol:v:133:y:2019:i:c:s0301421519304586
    DOI: 10.1016/j.enpol.2019.110880
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    2. Wang Lai Wang & Marek Kryszak, 2020. "Technological Progress and Supply Base under Uncertain Market Conditions: The Case Study of the Taiwanese c-Si Solar Industry 2016–2019," Energies, MDPI, vol. 13(21), pages 1-25, November.
    3. Ding, Hao & Zhou, Dequn & Zhou, P., 2020. "Optimal policy supports for renewable energy technology development: A dynamic programming model," Energy Economics, Elsevier, vol. 92(C).
    4. Xu, Li & Zhang, Qin & Shi, Xunpeng, 2019. "Stakeholders strategies in poverty alleviation and clean energy access: A case study of China's PV poverty alleviation program," Energy Policy, Elsevier, vol. 135(C).
    5. Ansari, Dawud & Holz, Franziska, 2020. "Between stranded assets and green transformation: Fossil-fuel-producing developing countries towards 2055," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 130, pages 1-1.
    6. Lin, Boqiang & Xie, Yongjing, 2024. "How feed-in-tariff subsidies affect renewable energy investments in China? New evidence from firm-level data," Energy, Elsevier, vol. 294(C).
    7. Lin, Boqiang & Xie, Yongjing, 2023. "The impact of government subsidies on capacity utilization in the Chinese renewable energy industry: Does technological innovation matter?," Applied Energy, Elsevier, vol. 352(C).
    8. Liu, Zhengguang & Guo, Zhiling & Chen, Qi & Song, Chenchen & Shang, Wenlong & Yuan, Meng & Zhang, Haoran, 2023. "A review of data-driven smart building-integrated photovoltaic systems: Challenges and objectives," Energy, Elsevier, vol. 263(PE).

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