China’s renewable energy goals ‘could increase pressure’ on global supply chains

The country’s new 2026-2030 renewable energy plan has set targets around 3.5 terawatts (TW) of domestic renewable capacity by 2030, including more than 2.8TW of wind and solar, alongside major investment in storage, transmission and offshore wind.

Mohammed Talib, an expert in construction and infrastructure at Pinsent Masons, said: “China's new renewable energy plan is about far more than building additional solar and wind capacity.”

“The key takeaway is that China intends to deepen its leadership across the entire clean energy value chain, including generation, storage, transmission, offshore wind and critical supply chains,” he said.

“The knock-on effects could be significant. Greater domestic demand may absorb more renewable equipment production, potentially slowing the long-term decline in solar panel prices and creating periodic supply constraints.”

As China absorbs more renewable equipment domestically while continuing to strengthen its position in critical minerals, manufacturing and clean energy supply chains, developers outside China may face greater competition for equipment and potential price pressures should they continue to be dependent on Chinese supply chains, according to Talib.

China's total installed renewable energy capacity reached around 2.3TW by the end of 2025, according to China's National Energy Administration. China accounts for more than 80% of global manufacturing capacity across all major solar power production stages, including polysilicon, ingots, wafers, cells and modules, and produces around 95% of global solar wafer manufacturing capacity, one of the most critical upstream components for renewable energy.

Alice Wang, an expert in infrastructure and energy projects at Pinsent Masons, said: “Importantly, China could further strengthen its position in critical minerals, batteries, electrical equipment and grid infrastructure.” 

"For developers and energy-intensive industries outside China, the challenge may increasingly be securing affordable equipment and resilient supply chains, rather than simply accessing renewable generation capacity. From a contractual perspective, these supply chain pressures heighten the risk of price escalation disputes, delay claims and force majeure arguments across EPC and equipment supply agreements. Project developers and their advisers should be reviewing procurement and risk allocation provisions carefully," she said.

"China+1 strategies, where supply chains are diversified by adding an additional country alongside China, may become more expensive than many expected. Countries such as India, Vietnam and Malaysia continue to build manufacturing capacity, but China's scale, integrated supply chains and processing capabilities remain difficult to replicate. Diversification also introduces legal and regulatory complexity — different trade remedy regimes, anti-dumping duties and varying local content requirements all add layers of risk that need to be addressed at the contracting stage."

Other jurisdictions are also taking steps to build domestic clean energy manufacturing capacity. The US Inflation Reduction Act and the EU's Net Zero Industry Act both seek to incentivise local production of solar panels, batteries and other critical components, while countries across the Middle East and Asia-Pacific are investing in upstream processing capabilities. However, whether these efforts can meaningfully reduce reliance on Chinese supply chains in the near term remains uncertain, given China's scale advantages and integrated production ecosystem.

Wang said: “For infrastructure and energy projects with long investment horizons, the interplay between geopolitical supply chain shifts and contractual risk allocation will be a defining issue over the coming years.”