Chinese solar panel manufacturers are urging governments to curb investment and promote industry collaboration, aiming to halt the sharp decline in prices of solar cells and modules. This problem has been exacerbated by overcapacity.
China’s rise as the world’s leading solar panel producer, boasting 80% of global module capacity, has been fuelled by financial incentives and government support.
Analysts predict that Chinese manufacturers might add up to 600GW of capacity this year – enough to meet global demand until 2032.
Ongoing price drops have led to warnings that intense competition could push smaller producers into bankruptcy. Recent big capacity jumps led to a 42% drop in the prices of China’s finished solar panels last year.
From June 2023 – February 2024, at least eight companies cancelled or suspended over 59GW of new production capacity. According to the China Photovoltaic Industry Association, this equalled 6.9% of China’s total finished panel production capacity in 2023.
At Tuesday’s International Solar Photovoltaic and Smart Energy Conference, Gao Jifan, chairman and CEO of Trina Solar and honorary president of CPIA, called for government regulation of new investments in the sector to prevent further losses.
Gongshan Zhu, chair of the Asian Photovoltaic Industry Association, cautioned against entrants against joining the sector quickly, noting that industry profits had plummeted by 70% due to overcapacity and falling prices and the USA’s trade barriers.
Industry leaders at the conference condemned “race-to-the-bottom” price competition and recommended that bidding processes consider research and development efforts over pricing.
Wuxi Suntech Power Chairman, Fei Wu, believed that consolidation in the industry has already started – predicting that the industry would deteriorate further in 2024 and more small companies are likely to go out of business.
[Image: Solar panels at a photovoltaic industrial park in Hami, Xinjiang Uighur Autonomous Region, China. Image Credit: Reuters]
