How Total Energies Partnered with Chinese SOEs on Solar: Case
Company Background
TotalEnergies SE, headquartered in Paris, France, is one of the world’s largest integrated energy companies with 2023 revenues of US$218.9 billion and approximately 100,000 employees globally. The company has undergone a significant strategic transformation in recent years, evolving from a traditional oil and gas major into a broad-based energy company committed to achieving net-zero emissions by 2050. As part of this transition, TotalEnergies has built a substantial portfolio of renewable energy assets, aiming to reach 100 GW of renewable power generation capacity by 2030, up from approximately 22 GW at the end of 2023.
TotalEnergies has a long history in China, dating back to the 1970s when it first supplied petrochemical products. Today, the company employs approximately 4,500 people in China across its exploration and production, refining and chemicals, marketing and services, and renewable energy businesses. China plays an increasingly strategic role in the company’s renewable energy ambitions — particularly in solar power, where China dominates the global supply chain, accounting for over 80% of global solar module production in 2023.
The Strategic Rationale: Why Partner with Chinese SOEs?
TotalEnergies’ decision to partner with Chinese state-owned enterprises (SOEs) on solar projects was driven by several strategic considerations. First, China is the world’s largest solar market, with 609 GW of installed solar capacity by the end of 2023 — more than the entire European Union combined. The country added 217 GW of new solar capacity in 2023 alone, a 148% increase year-over-year, according to the National Energy Administration (NEA). For a company targeting 100 GW of global renewable capacity by 2030, having a presence in the world’s largest solar market was not optional — it was essential.
Second, Chinese SOEs control the majority of China’s utility-scale solar project development and grid connection. The “Big Five” Chinese power generation SOEs — China Energy Investment Corporation, State Power Investment Corporation, China Huaneng Group, China Huadian Corporation, and China Datang Corporation — together own over 50% of China’s wind and solar capacity. Without partnering with these state-owned giants, foreign energy companies have virtually no access to China’s utility-scale renewable energy market.
Third, partnering with Chinese SOEs on solar projects in China serves as a strategic platform for co-investing in solar manufacturing and project development in Belt and Road Initiative (BRI) countries, where Chinese SOEs also play a dominant role.
The Partnership Strategy: Three Distinct Models
TotalEnergies has employed three distinct partnership models with Chinese SOEs, each serving a different strategic purpose: joint development of utility-scale solar farms in China, joint ventures for solar manufacturing, and BRI co-investment platforms.
Model 1: Co-Development of Utility-Scale Solar Farms
In 2019, TotalEnergies established a landmark partnership with China Three Gorges Corporation (CTG) — one of China’s largest state-owned clean energy enterprises with over 80 GW of installed renewable capacity — to jointly develop distributed solar projects in China. The partnership initially focused on rooftop solar installations on commercial and industrial buildings in the Yangtze River Delta, with a target of 500 MW of installed capacity by 2023. Under this model, TotalEnergies provided technical expertise in project design, financing, and international best practices for operations and maintenance, while CTG contributed land access, grid connection permits, and local regulatory relationships.
By early 2024, the TotalEnergies-CTG partnership had successfully developed and commissioned 420 MW of distributed solar capacity across 120+ commercial and industrial sites, representing an investment of approximately RMB 1.8 billion (US$250 million). The projects generate approximately 450 GWh of clean electricity annually — enough to power over 150,000 Chinese households — and reduce CO₂ emissions by approximately 350,000 tonnes per year. The partnership was expanded in 2022 to include utility-scale solar farms, with a 200 MW ground-mounted solar project in Hubei Province reaching commercial operation in Q3 2023.
In 2021, TotalEnergies signed a second major partnership — this time with China National Offshore Oil Corporation (CNOOC), the country’s largest offshore oil and gas producer. The agreement focused on co-developing offshore wind and solar projects across China’s coastal provinces, leveraging CNOOC’s offshore engineering expertise and TotalEnergies’ global renewable energy experience. The initial phase targeted 1 GW of combined offshore wind and solar capacity by 2025, with TotalEnergies taking a minority equity stake of up to 30% in qualified projects.
Model 2: Joint Venture for Solar Manufacturing
Beyond project development, TotalEnergies recognized the strategic importance of securing access to China’s solar manufacturing supply chain — which produces over 80% of the world’s solar cells and 70% of inverters. In 2022, TotalEnergies formed a 50/50 joint venture with Zhejiang Chint Electrics (CHINT), a leading Chinese manufacturer of electrical equipment and solar components, to produce string inverters and power conversion systems for the global solar market.
The JV, capitalized at RMB 240 million (US$33 million), established a manufacturing facility in Wenzhou, Zhejiang Province, with an annual production capacity of 5 GW of string inverters. String inverters are a critical component of utility-scale solar plants, converting the DC power generated by solar panels into AC power for grid connection. The TotalEnergies-CHINT facility achieved ISO 9001 and ISO 14001 certification in 2023 and began exporting products to TotalEnergies’ solar projects in Europe, Africa, and the Middle East by Q4 2023.
This manufacturing JV gave TotalEnergies three strategic advantages: it secured supply of a critical component at competitive prices (approximately 20–30% lower than European-manufactured equivalents), it shortened lead times from 16 weeks to 6 weeks, and it provided access to CHINT’s established distribution network across Asia and Africa — regions where TotalEnergies was rapidly expanding its renewable energy presence.
Model 3: BRI Co-Investment Platform
TotalEnergies’ most innovative partnership model was the creation of a co-investment platform with Chinese SOEs for solar project development along the Belt and Road Initiative. In 2020, TotalEnergies partnered with China National Chemical Engineering Group (CNCEC) — a centrally-administered SOE with operations in over 80 countries — to identify, develop, and finance solar projects in BRI markets including Southeast Asia, Central Asia, and the Middle East.
Under the platform agreement, TotalEnergies contributed its global project development expertise, international financing relationships, and offtake agreements, while CNCEC brought local market access, construction capabilities, and Chinese policy bank financing from institutions like China Development Bank (CDB) and the Export-Import Bank of China (Exim Bank). The platform targeted an initial portfolio of 1.5 GW of solar projects across five countries, with a combined investment value of approximately US$1.2 billion.
The first project under this platform — a 200 MW solar farm in Uzbekistan — achieved financial close in June 2022 with US$180 million in debt financing from CDB and the Asian Infrastructure Investment Bank (AIIB). The project reached commercial operation in Q4 2023 and supplies electricity at a tariff of US$0.045/kWh — one of the most competitive solar tariffs in Central Asia. A second project, a 300 MW solar farm in Vietnam, reached financial close in March 2023 with US$240 million in financing from Exim Bank and commercial banks.
Key Results and Impact
TotalEnergies’ partnership strategy with Chinese SOEs has produced substantial results:
Installed capacity: Through its various partnerships, TotalEnergies has secured participation in over 2.5 GW of solar capacity in China and an additional 1.2 GW through BRI co-investment platforms. This represents approximately 12% of TotalEnergies’ global renewable capacity of 22 GW.
Financial returns: TotalEnergies has reported that its Chinese solar partnerships achieved internal rates of return (IRR) of 8–12% in 2023, compared to 7–10% for comparable projects in Europe. This premium is attributable to lower construction costs in China (US$0.45–0.55/watt versus US$0.70–0.90/watt in Europe) and faster permitting timelines (12–18 months versus 24–36 months in Europe).
Supply chain resilience: The CHINT manufacturing JV has supplied over 2 GW of inverters to TotalEnergies’ global project pipeline, reducing the company’s exposure to logistical bottlenecks in global shipping. TotalEnergies estimates that the JV saved approximately €40 million (US$43 million) in procurement costs in 2023 compared to sourcing from European suppliers.
Carbon reduction: TotalEnergies’ Chinese solar partnerships have contributed to the generation of approximately 4.5 TWh of clean electricity since inception, avoiding approximately 3.5 million tonnes of CO₂ emissions.
Challenges and Mitigation
TotalEnergies’ partnerships with Chinese SOEs have not been without challenges. The company has navigated several potential pitfalls that foreign clean energy companies should be aware of:
Intellectual property protection: Technology transfer requirements in China’s solar sector have historically raised concerns. TotalEnergies addressed this by structuring its manufacturing JV with a clear IP licensing framework, where proprietary inverter designs remain the property of the parent company but are used under license by the JV. This prevents full IP transfer to Chinese partners while enabling technology sharing.
Equity structure negotiations: Chinese SOEs typically seek 51% or majority control in joint ventures. TotalEnergies successfully negotiated 50/50 JVs in all three partnership models by demonstrating the value of its global offtake agreements, financing relationships, and international operational expertise.
Profit repatriation: China’s foreign exchange controls and profit repatriation procedures can create delays. TotalEnergies mitigated this by structuring its Chinese partnerships to generate yuan-denominated returns that could be reinvested in new Chinese projects, reducing the need for large-scale currency conversion.
Lessons for Foreign Clean Energy Companies
TotalEnergies’ experience offers actionable guidance for foreign companies seeking to partner with Chinese SOEs in solar and renewable energy:
First, structure partnerships as complementary — the foreign company’s contribution should be technology, international market access, or global operational expertise that the Chinese SOE cannot easily replicate. Second, engage multiple SOE partners rather than putting all eggs in one basket — TotalEnergies successfully manages partnerships with three different SOEs, preventing over-dependence on any single relationship. Third, the manufacturing JV model — combining foreign technology with Chinese manufacturing scale — is a proven formula for reducing costs and securing supply chain resilience.
Outlook
With China targeting 1,200 GW of solar capacity by 2030 and Chinese SOEs continuing to dominate the domestic renewable energy landscape, TotalEnergies’ partnership strategy positions the company for sustained growth. The company has announced plans to invest an additional US$2 billion in China’s solar market by 2030 through its existing partnership structures, targeting total participation of 6 GW of installed capacity. As the global solar industry increasingly relies on Chinese supply chains and Chinese-financed BRI projects, TotalEnergies’ model of deep collaboration with Chinese SOEs may become the dominant approach for foreign energy companies seeking a meaningful role in the world’s largest clean energy market.
