Opinion | China’s solar power breakthrough could really shine in energy-starved Africa

That’s because solar energy enjoys a powerful positive feedback loop. As the number of solar panels grows, economies of scale kick in, driving down production costs. These lower prices make solar more accessible and attractive, increasing demand. Increased demand drives more investment and innovation, making solar technology even more efficient and affordable. This self-reinforcing cycle drives exponential growth in solar energy.

Given that solar accounted for less than 6 percent of global electricity generated last year, the biggest growth is yet to come. Solar is expected to generate more electricity than gas-fired plants in 2030 and coal-fired plants by 2032 — and could become our largest source of electricity within a decade.

However, two major obstacles stand in the way of even faster deployment of solar power: storage and long-distance transmission.

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In China, growth energy storage systems – from power generators to industrial users – is accelerating. Globally, battery storage costs have fallen by 99 percent over the past three decades; battery technologies are set to evolve with solar power in an empowering ecosystem. There are ambitious plans to ship solar and other forms of renewable energy between countries, for example to the UK from Morocco and to Singapore from its Southeast Asian neighbors. China, which is expanding its Long-distance power gridlaunched the world’s largest solar power plant in Xinjiang last month.

But regulatory frameworks and market-based pricing mechanisms are just as important. For most of the West, solar is just another option in the green energy transition. But for many in the energy-poor Global South, it provides initial access to grid electricity.

In Africa, for example, solar energy can fuel industrial growth without the devastating pollution costs of Europe and the United States. The scalability of solar energy also creates opportunities distributed power solutions without the need to make huge investments in network infrastructure.

Some 43 percent of Africa’s population, or 600 million people, lack access to reliable electricity, which is also a major business constraint cited by 40 percent of African companies in the study. Not surprisingly, renewable energy mini-grids have proliferated across Africa as the distributed renewable energy (DRE) sector has grown. Large factories are getting power “inside the fence”; more than 400 million Africans have access to electricity through home solar systems.

In April, the World Bank and the African Development Bank announced a plan to provide electricity to at least 300 million people in Africa by 2030, mostly through DRE systems. If successful, Africa could become a global leader in a new paradigm of distributed energy, bypassing years of uncertain waits for national grids to build out.

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This could be a key moment for China to reshape its role in Africa’s growing solar market. It could move beyond just providing equipment to become a developer and operator of solar projects, leveraging its complementary strengths in photovoltaics, batteries and mobile payments.

The door to the US market may be closed, but China can still shape development in Africa’s most important growth market. As margins in the solar supply chain become razor-thin, solar operations could take their place as a far more profitable and sustainable business. They could even become a cornerstone Belt and Road Initiative in Africafrom powering mines to energizing industrial parks, to create integrated industrial ecosystems.

Solar operations not only promise to be more economically viable, but also have a social impact. And the modular and scalable nature of solar installations enables adaptive deployment, from small off-grid systems to large utility-scale projects. Much shorter implementation times offer a faster return on investment. It also enables greater private sector involvement and reduces dependence on state entities, streamlining project development and increasing efficiency.

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In Africa, solar operations are much more likely to involve partnerships between Chinese, international and African businesses, working with state-owned rather than state-led entities. This business-led approach – with its emphasis on collaboration, innovation and community empowerment – would be a fundamental departure from previous state-led efforts Belt and Road Initiative Projects.

To succeed, Chinese companies will need to develop new competencies in navigating the regulatory environment, managing stakeholders, developing innovative business models and improving cross-cultural cooperation.

By making a decisive shift from building infrastructure to leading the continent’s green electrification project, China can accelerate Africa’s sustainable industrialization.

This business approach to distributed solar energy has the potential to light millions of lives and boost economies – cementing China’s role as Africa’s indispensable partner. In doing so, China will not only help unlock Africa’s vast potential, but also show a new course for inclusive South-South cooperation.

Winston Mok, a private equity investor, was previously an investor in the private equity sector