Monday, February 16, 2026-China’s once-commanding lead in green energy is facing mounting pressure as structural challenges, trade tensions, and slowing domestic demand begin to erode its dominance.
For years, China powered ahead as the world’s largest producer of solar panels, wind turbines, and electric vehicle batteries. Now, overcapacity in manufacturing, tightening overseas restrictions, and price wars within its own clean-tech sector are squeezing margins and exposing vulnerabilities in a model built on rapid expansion and heavy state backing.
Export markets that once absorbed massive volumes of Chinese solar modules and battery systems are increasingly imposing tariffs and local-content rules. At the same time, weaker property markets and slower industrial growth at home have dampened energy consumption forecasts, reducing the urgency of new installations.
Companies that scaled aggressively are now grappling with inventory gluts and falling profits, forcing consolidation and raising concerns about financial stability across segments of the renewable supply chain.
The stakes extend beyond corporate balance sheets. China’s green energy industry has been central to its economic strategy, job creation, and global influence in climate technology. If the current turbulence persists, Beijing may need to recalibrate subsidies, encourage innovation over volume, and accelerate domestic grid reforms to absorb surplus capacity.
The coming months will be critical in determining whether China can adapt and maintain its edge—or whether its green energy advantage continues to unravel under global and domestic strain.
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