Could old coal mines help ease China’s solar-panel overcapacity?

China leads the world in converting decommissioned coal-mining sites into solar power projects, a trend that promises to advance the clean energy transition while potentially reducing a surplus of solar panels produced by struggling Chinese manufacturers, according to Global Energy Monitor (GEM).

Conversion of surface-mined lands into solar-generation projects had surged in 15 countries, particularly over the past couple of years, the non-governmental organisation said in a report on Wednesday.

In mainland China – the world’s largest producer and consumer of coal – 90 former coal mines were operating as solar-power facilities, with a total generating capacity of 14 gigawatts (GW), GEM said. An additional 46 projects representing 9GW were in the planning stages, it added.

“Repurposing mines for solar development offers a rare chance to bring together land restoration, local job creation, and clean energy deployment in a single strategy,” said Wu Chengcheng, project manager at GEM and co-author of the report.

Outside China, 14 countries, including Australia, the US and Greece, were pursuing conversion projects, targeting a total of 11GW of solar capacity, according to GEM. However, most projects were still in the early stages, with only a small fraction operational.

The report said such projects could help address land-utilisation issues, as the world had closed more than 6,000 coal mines since 2010, mostly in China and the US. More were expected to close under national commitments to phase out coal in 33 countries, GEM added.

“I wouldn’t discount politics for influencing these trends,” said Ryan Driskell Tate, associate director at GEM. “These projects turn ‘abandoning’ into ‘rebuilding’ and are incredibly symbolic of a just energy transition.”

He added that strong government support existed for such projects, including public funding, and many projects in China were led by state-owned enterprises.

For China, mine conversions could also address pressing overcapacity issues within the solar-panel manufacturing sector. With demand for solar equipment slowing in various regions and warehouses filled with unsold panels, converting coal mines to solar sites could align climate objectives with economic relief, according to GEM.

“It’s not a silver bullet for supply gluts, but it’s a smart way to get panels in the ground and push the transition narrative where it matters most,” Driskell Tate said.

Chinese solar equipment manufacturers like JinkoSolar have already engaged in these efforts as far back as 2012, supplying panels for a solar farm built on a former mine in Germany.

Worldwide, more than 300 surface coal mines had been decommissioned since 2020, and 127 large coal sites were expected to close by 2030, according to GEM. Together these could host 288GW of solar generation capacity – equal to 15 per cent of existing global solar capacity – and bring the world closer to tripling renewable energy by the end of the decade, it added.

These projects would also generate an estimated 259,700 permanent jobs in the solar industry, five times greater than the current coal-mining workforce in the US, the report said.

China’s solar-panel overcapacity issue could get worse in the second half of the year, with the industry suffering from slowing domestic installations and heightened tariffs from the US and European Union hindering the export outlook, according to Citigroup.

China’s top 33 solar-panel manufacturers signed a “self-discipline pledge” in December, agreeing to production quotas to control the glut and committing to observing a recommended price floor to preserve margins.