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China is installing a jaw-dropping amount of solar panels, but growth in electricity generation from solar is barely increasing. Meanwhile prices are remarkably volatile. What gives?
China’s solar revolution is immense — quite literally world-changing — but that doesn’t mean everything is running smoothly.
Last year China installed a record-breaking amount of solar – 87.4 GW – but that number came amidst zero COVID lockdowns and economic turmoil. This year, things are off to a blazing start, with over 48 GW already installed through April and BloombergNEF projections exceeding 154 GW for 2023. For comparison, total installed capacity in the United States is only 142 GW, meaning China is deploying more solar this year than the U.S. has put up over the past two decades. There’s simply nothing happening that approaches the scale of what China is doing anywhere else on the planet. Many of these panels are part of gargantuan energy bases in China’s remote north and western deserts, but rooftop solar is also growing rapidly.
China isn’t just deploying solar power, it’s expanding factories up and down the supply chain. In September of last year, amid crazy natural gas prices, spiking lithium markets, and concerns about Europe freezing, Bloomberg’s David Fickling sounded an optimistic note by looking closely at the solar supply chain. Polysilicon, ingots, wafers, cells, and modules all have annual production capable of making enough to add over 400 GW, suggesting there was a lot more room to run.
Similar announcements continued the drumbeat of solar growth. LONGi declared in January it intends to spend over $6.5 billion to build the world’s biggest manufacturing site for solar. Tongwei, world-leading polysilicon producer and cell maker, is vertically integrating to capture more of the value from its output, expanding into modules.
The cumulative scale of these investments is something to behold. The IEA’s 2050 Net Zero Emission report has been a benchmark for examining the progress the world is making (or, more often not making) towards deep decarbonization. Just a few weeks ago, Exxon denounced it as unrealistic, saying that it’s “highly unlikely that society would accept the degradation in global standard of living required to permanently achieve a scenario like the IEA NZE.” But the IEA just released a report finding that in terms of solar production, the world is already ahead of their 2030 targets. And not just a little ahead. The 1.1 TW (that’s terrawatts!) of manufacturing capacity is “65% higher than the level required to satisfy deployment needs under the NZE Scenario in 2030.”
To be sure, solar isn’t everything, and while the battery sector is similarly ramping up, other key technologies, like wind, are relatively stagnant. Still, we’re at the point where the question isn’t whether we can make enough solar panels to hit climate goals, but how much we’ll need to reconsider the energy mix in these scenarios and just lean more into solar.
The sufficiency of the global supply chain shouldn’t paper over the fact that the vast majority of this investment and production capacity is taking place in China.
There have been many welcome announcements about investments in clean tech production taking place in the United States and Europe, especially in the wake of last year’s Inflation Reduction Act, but nothing compares to the Chinese renewables industry. Italy’s Enel announced it would build a “massive” solar-panel facility in Sicily — its planned capacity: 3 GW. The new IEA report explicitly defines “major projects” as those over 20 GW a year, all of which so far are located in China.
This pattern of development makes clear the dangers of decoupling from China. The EU can’t come close to hitting its goal of installing 400 GW in the next seven years without relying on Chinese panels. But if Europe and North America boycott Chinese-made solar, then these game-changing investments might evaporate.
However, to paraphrase Mao, the solar revolution is not a dinner party.
All of this construction and production is needed to meet our climate goals, but there remain critical questions about how neatly supply and demand will sync up.
Venture capitalist Dipender Saluja calls the energy transition “the biggest opportunity in the history of the world.” He’s thinking about profits when he says this, but profits don’t arise merely from investing in a growing sector. Cutthroat competition, material constraints, time inconsistency, managerial capacity, logistical difficulties, geopolitical pressures, interest rates, financial stability, global pandemics, and more all mean profits in renewable energy are hard won.
For example, the solar sector saw prices of polysilicon, a critical component of solar panels, collapse from $36 per kilogram in December to below $20 in mid-February, only to see it quickly rebound back to $30 by the middle of February before sliding back down below $20 now. This kind of volatility wreaks havoc on the supply chain.
Indeed, the major manufacturers fear that price pressures and overcapacity are going to lead to businesses shuttering. Bloomberg’s eminent solar watcher Jenny Chase said just this week “there will be a price crash, it will hurt, and there will probably be bankruptcies across the industry.”
But the supply and demand issue is not only on the manufacturing side of China’s solar boom. Deploying dozens of gigawatts of solar means unleashing tons of cheap electrons onto a grid that can quickly fall victim to duck/canyon curves where spot prices are essentially zero on a sunny day but ramp up immensely when the sun sets. California was a world leader here, and Chinese provinces like Shandong are increasingly grappling with similar dynamics.
These kinds of difficulties can be seen in data around electricity generation. Despite record expansion in installed solar capacity across China, the growth displayed in generated electricity is mediocre. Solar provided 84.6 TWh in China over the first four months of the year, only 7.5% more than the same period in 2022. And, of course, it’s the energy generation that matters.
Now it just might have been unusually cloudy, and the dust storms and air pollution surely aren’t helping. We know grid connections are lagging as well.
But all of this potential needs to actually start generating electricity fast because climate change isn’t waiting for us. It’s here now. Beyond the storms and droughts and heatwaves, in the electricity sector, climate change is demolishing hydropower production. The past two months have seen China produce the least amount of electricity from hydro since 2015. And, as ever, scale matters. Even with such low production, hydro is about three times the generation from solar, meaning coal makes up the gaps.
The pieces for an energy and economic revolution are assembling, but in China and elsewhere, it’s going to require a lot of effort in designing and planning the future.
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The Department of Energy has put together a list of sites and is requesting proposals from developers, Heatmap has learned.
The Department of Energy is moving ahead with plans to allow companies to build AI data centers and new power plants on federal land — and it has put together a list of more than a dozen sites nationwide that could receive the industrial-scale facilities, according to an internal memo obtained by Heatmap News.
The memo lists sites in Texas, Illinois, New Jersey, Colorado, and other locations. The government could even allow new power plants — including nuclear reactors and carbon-capture operations — to be built on the same sites to generate enough electricity to power the data centers, the memo says.
Trump officials hope to start construction on the new data centers by the end of this year and switch them on by the end of 2027, according to the memo.
The agency will request formal feedback from artificial intelligence companies and developers about how best to proceed with its proposal as soon as Thursday, according to an individual who wasn’t authorized to speak about the matter publicly.
The effort, aimed at maintaining America’s “global AI dominance,” represents one of the few points of agreement between the Trump and Biden administrations. In the final days of his term, President Biden ordered the government to identify federal properties where new data centers could be built.
Scarcely a week later, President Trump issued an executive order lifting all Biden-era limits on AI development — but keeping the mandate to move quickly to maintain America’s alleged edge in the new technology. “It is the policy of the United States to sustain and enhance America’s global AI dominance,” the Trump order said.
The new memo proposes a list of 16 federal sites that could host AI data centers, new power plants, and other “AI infrastructure.” They include several sites where nuclear weapon components are made, including the Pantex site near Amarillo, Texas, and the Kansas City National Security Campus, which is operated by Honeywell International. The other candidate sites are:
Other sites could still be considered, the memo says, and the current list has no particular ranking or order.
The offer may not be enough to convince developers to work with the federal government, one energy expert told me.
“I think it’s important that the government is thinking about how to help the industry, but you also have to think about it from the perspective of the industry a little bit. Why is doing this on a DOE site better than doing this as a project in Texas?” said Peter Freed, a founding partner at the Near Horizon Group and the former director of energy strategy at Meta.
“Historically, the perspective is that anything involving government land just adds complexity,” Freed told me. “I love Idaho National Lab. It’s a national treasure. But if you want a data center there by the end of 2027 — where is the power going to come from?”
Only if the government were able to guarantee fast-track access to certain kinds of equipment — such as transformers or circuit breakers, which are in a severe shortage — would it make sense for most developers to work with them, he said.
The new memo raises the idea that “innovative energy technologies” including “nuclear reactors, enhanced geothermal systems, fuel cells, carbon capture, energy storage systems, and portfolios of on-site technologies” could be considered to power the new data centers.
The memo asks potential developers, “What information would you need to determine the suitability of various energy storage systems (e.g., subsurface thermal energy storage, flow battery, metal anode battery) as a means for supporting data center cooling or other operations?” It also asks what companies would need to know about a site’s suitability for carbon capture and storage operations. It asks, too, what information might be needed about a site’s topography, physical security, and earthquake risk to build a new nuclear power plant.
The memo doesn’t mention wind turbines or new solar farms, although they could fall under some of the terms it sets out. It also asks companies what information they might need about nearby nuclear power plants or the local power grid — and it inquires whether some data center operations could be turned on and off depending on local power availability.
Although the government could allow new data centers to be built, it won’t accept all liability for them. The memo adds that companies might need to “agree to bear all responsibility for costs and liabilities related to construction and operation of the Al data centers as well as other infrastructure upgrades necessary to support those data centers.”
The Trump administration seems intent on moving quickly on the proposal. Once it publishes the request, companies will have 30 days to respond.
Current conditions: A rare wildfire alert has been issued for London this week due to strong winds and unseasonably high temperatures • Schools are closed on the Greek islands of Mykonos and Paros after a storm caused intense flooding • Nearly 50 million people in the central U.S. are at risk of tornadoes, hail, and historic levels of rain today as a severe weather system barrels across the country.
President Trump today will outline sweeping new tariffs on foreign imports during a “Liberation Day” speech in the White House Rose Garden scheduled for 4 p.m. EST. Details on the levies remain scarce. Trump has floated the idea that they will be “reciprocal” against countries that impose fees on U.S. goods, though the predominant rumor is that he could impose an across-the-board 20% tariff. The tariffs will be in addition to those already announced on Chinese goods, steel and aluminum, energy imports from Canada, and a 25% fee on imported vehicles, the latter of which comes into effect Thursday. “The tariffs are expected to disrupt the global trade in clean technologies, from electric cars to the materials used to build wind turbines,” explained Josh Gabbatiss at Carbon Brief. “And as clean technology becomes more expensive to manufacture in the U.S., other nations – particularly China – are likely to step up to fill in any gaps.” The trade turbulence will also disrupt the U.S. natural gas market, with domestic supply expected to tighten, and utility prices to rise. This could “accelerate the uptake of coal instead of gas, and result in a swell in U.S. power emissions that could accelerate climate change,” Reutersreported.
Republican candidates won in two House races in Florida on Tuesday, one of which was looking surprisingly tight going into the special elections. The victories by Jimmy Patronis in Florida’s First District and Randy Fine in the Sixth District bolster the party’s slim House majority and could spell trouble for the Inflation Reduction Act as the House Ways and Means Committee mulls which programs to cut to pay for tax cuts. But the result in Wisconsin’s Supreme Court election was less rosy for Republicans. Liberal Judge Susan Crawford defeated conservative Brad Schimel despite Schimel’s huge financial backing from Tesla CEO and Trump adviser Elon Musk, who poured some $15 million into the competition. The outcome “could tarnish the billionaire’s political clout and trigger worry for some Republicans about how voters are processing the opening months of Trump’s new administration,” as The Wall Street Journalexplained.
The Trump administration announced mass layoffs across the Department of Health and Human Services on Wednesday, part of a larger effort to reduce the agency’s workforce by 25%. The cuts included key staffers with the Low Income Home Energy Assistance Program, which has existed since 1981 and helps some 6.7 million low-income households pay their energy bills. A 2022 white paper calls LIHEAP “one of the most critical components of the social safety net.” The move comes at a time when many U.S. utilities are preparing to raise their energy prices to account for higher costs for materials, labor, and grid upgrades. In a scathing letter to HHS Secretary Robert F. Kennedy. Jr., Senate Energy and Commerce Democrats call the workforce cuts “reckless” and demand detailed explanations for why roles have been eliminated.
Energy storage startup Energy Vault on Wednesday announced it had closed $28 million in project financing for a hybrid green hydrogen microgrid energy storage facility in California. The firm says its Calistoga Resiliency Center, deployed in partnership with utility company Pacific Gas & Electric, is “specifically designed to address power resiliency given the growing challenges of wildfire risk in California.” The zero-emission system will feature advanced hydrogen fuel cells that are integrated with lithium-ion batteries, which can provide about 48 hours of back-up power via a microgrid to the city of Calistoga during wildfire-related power shutoffs. The site is expected to be commercially operational in the second quarter of 2025.
“The CRC serves as a model for Energy Vault’s future utility-scale hybrid microgrid storage system deployments as the only existing zero-emission solution to address [power shutoff] events that is scalable and ready to be deployed across California and other regions prone to wildfires,” the company said in a press release. As Heatmap’s Katie Brigham wrote last fall, PG&E has become an important partner for climate and energy tech companies with the potential to reduce risk and improve service on the grid.
China will finalize its first-ever sale of a green sovereign bond Wednesday. The country is expected to issue the bond on the London Stock Exchange and has reportedly received more than $5 billion in bids. “It’s no coincidence that China has chosen to list its debut green bond in London, given European investors’ continued strong demand for environmental products,” Bloombergnoted. Green bonds are investment vehicles that raise money exclusively for projects that benefit the climate or environment. China’s finance ministry wants the bond to “attract international funds to support domestic green and low-carbon development,” and specifically climate change mitigation and adaptation, nature conservation and biodiversity, and pollution prevention and control. Some of the money raised might also go toward China’s EV charging infrastructure, according toReuters.
GE Vernova has now produced more than half of the turbines needed for the SunZia Wind project in New Mexico. When completed in 2026, the 2.4 gigawatt project will be the largest onshore wind farm in the Western Hemisphere.
Rob and Jesse catch up on the Greenhouse Gas Reduction Fund with former White House official Kristina Costa.
The Inflation Reduction Act dedicated $27 billion to build a new kind of climate institution in America — a network of national green banks that could lend money to companies, states, schools, churches, and housing developers to build more clean energy and deploy more next-generation energy technology around the country.
It was an innovative and untested program. And the Trump administration is desperately trying to block it. Since February, Trump’s criminal justice appointees — led by Ed Martin, the interim U.S. attorney for the District of Columbia — have tried to use criminal law to undo the program. After failing to get the FBI and Justice Department to block the flow of funds, Trump officials have successfully gotten the program’s bank partner to freeze relevant money. The new green banks have sued to gain access to the money.
On this week’s episode of Shift Key, Rob and Jesse talk with Kristina Costa, who has been tracking the effort to bankrupt the green banks. Costa helped lead the Inflation Reduction Act’s implementation in the White House from 2022 to 2025 — and is a previous Shift Key guest. She joins us to discuss how Trump is weaponing criminal law to block a climate program, whether there’s any precedent for his actions, and what could come next in the legal battle. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: There's kind of two lines you hear from the Trump administration about this, two claims made by the Trump administration about the reason for these seizures, and I just wanna talk about them briefly because this is an unprecedented action. We should look at why the government has claimed that it needs to take this unprecedented action.
The first has to do with this video made by Project Veritas, a kind of conservative media organization …
Kristina Costa: A hit squad.
Meyer: A hit squad that recorded, unwittingly, an EPA official who described the EPA’s actions during December 2024, between the loss of the election and the inauguration, as “throwing gold bars off the Titanic.” That the agency was so eager and desperate to spend as much of the IRA down as it could before the Trump administration took office that it was like they were throwing gold bars off the Titanic — you know, a sinking ship.
The EPA administrator has fixated on this line and described it as waste and self-dealing, suggesting reckless financial mismanagement, blatant conflicts of interest, astonishing sums of tax dollars awarded to unqualified recipients and severe deficiencies of regulatory oversight.
You were involved in setting up the IRA. I wonder, first of all, just how do you reflect on this episode? And second of all, was the Biden administration doing the proverbial version of throwing gold bars off the Titanic during the post-election period?
Costa: Yeah, so I mean, it falls apart as any sort of quote-unquote evidence in what's happening with the Greenhouse Gas Reduction Fund if you just believe in the linear nature of time. So, as I said, we announced EPA made the selections in April of 2024. The funds were fully obligated in August of 2024. Grantees were starting to make announcements about investments in October of 2024 — all dates which precede election day by weeks to months. And so it is just a complete fabrication on the part of Lee Zeldin that there was any sort of inappropriate action on the part of the Biden EPA or any of the other agencies in doing what Congress directed us to do, which was to award and obligate funds to recipients consistent with the provisions of the Inflation Reduction Act that authorized and appropriated funds for the programs.
We had also — and I think I might have said this when I was with you guys in December — one of the first things that we did, from the White House implementation team, was to meet with all of our grant agencies and, in September and October of 2022, set targets for them for how much funding we wanted them to try to award and obligate by the end of the administration. And we set a goal, basically, that we would be aiming to have at least 80% of the available funds obligated by the end of 2024. And we hit that. And so the idea that there was some massive acceleration post-election — like, were there some contracts that the agencies obligated in December and January that, in the event of a Kamala Harris administration, they would've maybe obligated in February and March instead? Sure. I'm not going to say otherwise, but those grants had been made already. There wasn't this rush of actual decision-making.
Music for Shift Key is by Adam Kromelow.