The "sweet troubles" of China's photovoltaic industry: Hidden Concerns amid high growth

The Chinese photovoltaic equipment market continues to grow at a high speed. From January to October 2022, China's newly installed photovoltaic power generation capacity reached 58 gigawatts (GW), already exceeding the total newly installed capacity in 2021." Mr. Wang Bohua, honorary chairman of the China Photovoltaic Industry Association (an association related to industry manufacturers), clearly stated at the annual conference held on December 1st.

Overseas exports have also grown rapidly. From January to October, the total export value of silicon wafers, solar cells and modules used in solar panels reached 44.03 billion US dollars (approximately 5.992 trillion yen), an increase of 90% compared with the same period of the previous year. The export volume of solar cell modules measured in power reached 132.2 gigawatts (GW), up 60% year-on-year.

However, for the relevant Chinese manufacturers, the current situation may not be entirely satisfactory. Mr. Wang Bohua pointed out above that excessive competition among Chinese enterprises has brought about the risk of overcapacity. In addition, the large-scale exports by Chinese manufacturers have also raised concerns and opposition from some countries.

The predicament of the "strong"

Looking at the global photovoltaic power generation market, China has established a complete supply chain from raw materials to finished products of photovoltaic panels (which is difficult for other countries to replicate), and it has overwhelming cost competitiveness. According to a report released by the International Energy Agency (IEA) in August 2022, Chinese enterprises have a global market share of over 80% in silicon materials, silicon wafers, solar cells and modules.

But precisely because China is "too powerful", other countries (from the perspective of national security and others) are beginning to support the production of their own photovoltaic power generation facilities. Chinese manufacturers will face a severe international competitive environment in the future. Mr. Wang Bohua expounded on the recent developments in this way and further explained: "At the government level of various countries, the local production of photovoltaic power generation equipment has been included in research topics and supported by domestic enterprises through subsidies and other means."