China's solar industry is a poster child for the country’s economic rise over the last four decades. The output of Chinese solar grew by 76% annually between 2004 and 2013, and by 2019 Chinese firms accounted for 63% of all solar panels produced worldwide. At the same time, the cost of solar has fallen by over 90%, making it competitive with fossil fuels. This column shows that local government subsidies to produce, install and perform solar R&D were a major cause of the industry’s explosive growth. The findings highlight that green industrial policies pursued at the national level can become a powerful means of slowing global warming.
Ignacio Banares-Sanchez, Robin Burgess, David Laszlo, Pol Simpson, John Van Reenen and Yifan Wang
6 March 2026
VoxEU
https://cepr.org/voxeu/columns/ray-hope-rise-solar-energy-china
This work is published under POID and the CEP's Growth programmeGreen Transition programme.
This publication comes under the following CEP theme: Clean growth