FACING strains in its own market, one of China’s biggest hog breeders is looking beyond the boom-and-bust cycle of farming to an expansion into clean energy, which it says could allow it to piggyback on billions of dollars in investment by a major power generator.

A unit of Jiangxi Zhengbang Technology Co., the second-largest hog supplier among Chinese listed companies in 2020, has reached an agreement with the renewable energy subsidiary of State Power Investment Corp. (SPIC), one of China’s five biggest State-owned power generators, in Zhejiang Province to mount solar panels atop the sheds where it keeps its pigs.

Zhengbang released news of the deal last week, including a claim that SPIC’s investment could reach US$6 billion in three years, which initially sent the pig farmer’s shares soaring. But the stock has since retraced those gains after the company was asked to clarify its plans by the Shenzhen Stock Exchange.

SPIC’s confirmation of the deal was more general and didn’t include investment figures, and SPIC hasn’t responded to requests for comment.

Investors may also have been mindful of Zhengbang’s recent problems in paying its debts, which exemplify the financial stresses faced by China’s hog breeders when they expand too quickly and prices begin to fall.

Although the renewable power industry isn’t immune to financial pressures, including issues around materials costs and wastage, China’s drive to net-zero makes it an attractive opportunity for agricultural firms that control a lot of land.

China is a leader in the field. The hybrid industry, dubbed agrivoltaics, had 2.8 gigawatts of capacity installed in 2020, of which China accounted for about two-thirds, according to the Fraunhofer Institute for Solar Energy Systems ISE in Germany.

Initially, SPIC will install 100 megawatts of solar power on 800,000 square meters of rooftops, from which Zhengbang will derive rental income and electricity, according to the breeder’s filings. (SD-Agencies)