Global Demand for Clean Technology Surges Despite Oil Crisis
Over the past two months, nations have scrambled to secure oil supplies as the conflict in Iran disrupted the movement of oil tankers through the Strait of Hormuz. This situation has led some global analysts to predict a downturn in clean technology exports from China, the world’s leading producer of solar, wind, batteries, and electric vehicles (EVs). They argued that the rush to secure fuel for cars and trucks, combined with China’s manufacturing oversupply, would lead to collapsing prices and trade barriers, resulting in a sharp decline in cleantech exports and a slowdown in global deployment.
However, new data from the energy thinktank Ember shows the opposite trend. China’s solar exports doubled in a single month, reaching a record 68 gigawatts in March. Fifty countries set records for importing Chinese solar panels, with demand particularly high in nations most affected by the oil crisis, such as India and the Philippines. Battery and EV exports also saw a significant increase, rising by 38% in one month.
Nations Seek Reliable Energy Supplies
Countries are not only focusing on oil but are also working to secure more reliable energy sources to avoid future disruptions. Solar energy is now becoming a global phenomenon, with developing nations feeling the impact of soaring oil and gas prices. It is no surprise that many of these countries are rapidly seeking alternatives.
Demand for solar energy in African nations has risen sharply since 2024. In March alone, demand across the continent increased by 176% compared to the previous month, reaching 10 GW. Meanwhile, demand in Asia reached 39 GW. The top importers were India (11.3 GW) and Indonesia (6.2 GW), both of which have long relied on coal. Some of this demand may decrease due to recent changes in China’s tax rebates, which will add 9% to the cost of solar panels. However, this does not diminish the overall trend.
The Question of Oversupply
In just a few years, China has come to dominate the mass production of almost all clean technologies, including solar (80%), wind (70%), battery cells (80%), battery systems (80%), EVs (70%), and hydrogen electrolysers (58%). In newer industries like heavy electric trucks, China’s market share exceeds 90%. This success has brought about the challenge of overcapacity, where firms produce much more than the world is buying. Authorities have highlighted the need for industry consolidation.
For other cleantech producers, China’s record exports appear threatening. However, from a climate perspective, overcapacity is not necessarily a problem. This is because of Wright’s Law, which states that for every doubling of cumulative production, the cost per unit falls by a predictable percentage. When production is concentrated in high-volume hubs like China, this law translates into rapid cost declines globally. The effect is even stronger because China is installing solar at world-beating rates.
Record Solar Exports and Consistent Growth
Record solar exports are not a temporary blip. Growth has been consistently strong since 2023, and there is no sign of a long-term slump in demand for cheap solar and clean tech.
Impact on Fossil Fuels
As the International Energy Agency points out, this year’s oil crisis is likely to accelerate the shift toward clean technology. In the coming months, shipments of solar panels from China will be unloaded and added to power grids or used as standalone energy sources in regions ranging from South America to West Africa. Once online, cheap daytime solar will reduce demand for pricier power from coal and gas plants.
This was evident in Pakistan, where an unreliable grid drove enormous solar uptake in recent years, leading to less demand for gas. Solar panels typically displace coal and gas, as thermal power plants often burn these fossil fuels. However, EVs directly displace oil. This is why it is significant that exports of EVs and batteries are now more valuable to China than solar panels.
Solar and Storage Open Up Hard-to-Abate Sectors
Solar produces cheap, abundant power, while batteries allow it to be used later. These technologies are useful first for cleaning up electricity generation and boosting energy security. But they can unlock much more. They make it possible to electrify polluting sectors long considered “hard to abate.”
Electric options for heavy industry are multiplying. Electric arc furnaces are now replacing coal-fired blast furnaces in steelmaking. High-temperature electric heat pumps and electric boilers are replacing gas in some chemical and food-processing plants, while heavy-duty battery-electric haul trucks are being trialled in mining and construction. These technologies are still in early stages and often come with higher upfront costs. However, their advantage lies in being cheaper to operate, as long as electricity remains fairly affordable. This is exactly what solar and battery combinations deliver.
Australia Paving the Way
Last month, Australia imported nearly 1 GW of solar from China, setting a new monthly record. This quiet surge happened even as leaders debated whether to drill for more oil in Queensland or expand domestic fuel reserves. The facts on the ground favor clean technology. Per capita, sun-drenched Australia has the most rooftop solar in the world. Battery storage is growing rapidly, and the main power grid is now at 50% renewables. Uptake of EVs is surging after a slow start.
The next big thing will be clean tech for heavy industry and mining. Some mine sites already get most of their power from renewables, while electrified fleets are developing.
Cleantech is Here
China’s export boom demonstrates that cleantech is becoming the new engine of the global energy system. The scramble for oil is a stopgap measure. Higher oil prices will only spur the search for alternatives—just as they did during the first oil shocks over 50 years ago. This time, however, the oil shock has occurred amid the fastest energy transition in human history.
