The New Energy Era Is Here: Seven Chinese Solar Companies Now Produce More Capacity Than Oil Companies

  • The new energy leaders are seven Chinese PV companies, with Tongwei and GCL at the forefront, dominating the industry.

  • Solar power has already started to surpass oil companies in long-term production capacity, marking a shift in the energy landscape.

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While the International Energy Agency (IEA) is predicting the decline of the oil industry, analysts are now identifying the new key players in the sector. These, however, are companies that might not be familiar to you.

The seven new leaders in the energy sector: Tongwei, GCL Technology, Xinte Energy, Longi Green Energy, Trina Solar, JA Solar, and Jinko Solar. These Chinese photovoltaic companies have grown to the point of posing a threat to the oil industry.

They do so not only in terms of sustainability amid the energy transition (which one would expect from companies that control the supply of renewable technologies), but also in terms of energy production. This is an unexpected development.

How can these seven Chinese solar companies, virtually unknown in the West, overshadow the likes of ExxonMobil, Chevron, Shell, BP, TotalEnergies, ConocoPhillips, and Eni–the seven oil giants that have dominated the energy sector since the 20th century?

Oil barrel inefficiency. Oil is widely available but terribly inefficient. Besides being a finite resource, only about 25% of the energy in a barrel of oil is used as useful energy. The rest is wasted as heat and noise, such as in the case of gas turbines that reach a maximum efficiency of 33%.

To compare this inefficiency with the photovoltaic industry, a recent Bloomberg report converted the number of barrels produced annually into exajoules. One exajoule is a substantial amount of energy, capable of supplying a country like Australia, Italy, or Taiwan with electricity for a year.

ExxonMobil, the world’s largest oil company, produces around 8.3 EJ of energy annually, but only one fifth of it is actually used, amounting to about 2 EJ per year. In contrast, the world’s largest PV company, Tongwei, produces 150% less energy annually than what ExxonMobil uses.

The Chinese solar industry’s overtaking. What do we mean by “overtaking?” The energy sector in China has made a breakthrough in the way it produces energy. Unlike oil and gas, which are used up in a matter of months, solar panels can generate energy for decades, with a typical warranty of 25 years.

When you multiply the capacity of China’s solar industry by the lifetime of its photovoltaic cells, the seven major companies that lead the industry produce more useful energy than all the geological reserves developed by oil companies. This is even after taking into account a 1% annual degradation for solar panels.

For example, Tongwei produces a 25-year useful energy of almost 30 EJ, followed by GCL Poly with 20 EJ. Both companies dominate global polysilicon production, generating enough capacity to power a country like Italy for a year. What’s even more surprising is that they plan to double their production in the coming years.

Another point to consider is the focus on clean energy. As geopolitical tensions rise due to shifting balances of energy control, the emergence of China’s solar giants indicates that the future of the energy industry is increasingly reliant on our most abundant resource: the Sun.

The era of oil, with all its inefficiencies and environmental issues, is giving way to a period of clean, sustainable energy. In fact, the nation that dominates the supply has already started to outpace the energy giants of the 20th century.

Image | Tongwei

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