Solar-driven hydrogen production for zero carbon future: Social, economic, and policy implications for China's energy transition

China's pledge to achieve carbon neutrality by 2060 China’s pledge to achieve carbon neutrality by 2060 represents a transformative shift in the country’s energy and industrial landscapes, with profound implications for societal change. This study conducts a comprehensive economic and policy-oriented assessment of solar-based hydrogen production systems, focusing on their cost structure, scalability, and contribute to the broader social movement towards sustainability. By providing a comprehensive economic and policy-oriented analysis, the study assesses the social, economic, and policy dimensions of solar-based hydrogen production, particularly its scalability and impact on social equity in different regions of China. Using operational data derived from a pilot-scale solar hydrogen facility in western China between March and October 2024, the analysis evaluates levelized hydrogen costs, capital intensity, resource efficiency, and co-product value creation under realistic deployment conditions. A techno-economic framework is developed to quantify production costs across pilot and commercial scales, incorporating capital expenditure, operational costs, solar resource variability, and revenue streams from carbon-based by-products and emissions credits. Results indicate that the levelized cost of hydrogen reaches USD 1.87 kg −1 at pilot scale and declines to approximately USD 1.23 kg −1 under a projected 5 MW commercial configuration, positioning solar-based hydrogen favorably relative to conventional fossil-based hydrogen, grid-powered electrolysis, and hydrogen production with carbon capture. Sensitivity analysis highlights the dominant influence of solar utilization rates, policy incentives, and carbon pricing mechanisms on overall system competitiveness. Life-cycle economic evaluation demonstrates substantial reductions in carbon-related externalities, with emissions intensity corresponding to a 94% reduction compared to conventional fossil-derived hydrogen and a 76% reduction relative to electrolysis under China's current electricity mix. This decline in cost presents an opportunity to make renewable hydrogen accessible, which could drive social transformation by empowering local communities, particularly in high-irradiance regions of western China, where solar energy resources are abundant. Sensitivity analysis highlights the critical role of policy incentives and carbon pricing mechanisms in ensuring that the benefits of solar hydrogen are distributed equitably across society. The study underscores the positive social change that could arise from the widespread adoption of solar hydrogen, including the reduction of carbon-related externalities, the creation of green jobs, and alignment with China’s carbon market and decarbonization policies. The findings illustrate that solar hydrogen production has the potential to act as a key enabler of industrial decarbonization, regional economic development, and social equity, offering a scalable solution that advances China’s broader climate and social objectives. • Hydrogen production can drive regional economic growth and job creation. • Policy support is key to addressing regional disparities in hydrogen production. • Spatial mismatch challenges hydrogen transport, increasing costs and inequalities. • Socio-economic benefits depend on equitable distribution of hydrogen projects.