China’s “solar power”’ industry is worried about rapid growth

Concerned about the risk of overproduction and the tightening of regulations by foreign governments

Chinese companies hold more than 80% share of the global solar panel market

China’s photovoltaic equipment market continues to grow rapidly. “From January to October 2022, the total installed capacity of solar power generation in China reached 58 GW (gigawatts), surpassing the annual installed capacity in 2021.” Mr. Wang Bohua, honorary chairman of the China Light Fu Industry Association, an industry association of related manufacturers, made this clear at the annual general meeting held on December 1.

Exports to overseas are also increasing rapidly. Total exports of silicon wafers, solar cells and solar modules used in solar panels from January to October totaled 44.03 billion dollars (approximately 5.992 trillion yen), an increase of 90% compared to the same period of the previous year. The export volume of solar cell modules on a capacity basis was 132.2 GW, an increase of 60% year-on-year.

Nonetheless, it seems that the current situation is not necessarily a happy one for related Chinese manufacturers. Mr. Wang, mentioned above, pointed out the risk of overproduction due to excessive competition among Chinese companies. In addition, the large amount of exports by Chinese manufacturers has caused concerns and objections in some countries.

A dilemma due to being too strong

Looking at the world’s photovoltaic power generation market, China has built a consistent supply chain from raw materials for photovoltaic panels to finished products (which cannot be imitated by other countries) and has overwhelming cost competitiveness. According to a report released by the International Energy Agency (IEA) in August 2022, Chinese companies have over 80% of the global share of silicon raw materials, silicon wafers, solar cells, and solar modules.

However, because China is too strong, other countries (from the viewpoint of national security, etc.) are moving to support the domestic production of solar power generation facilities. “Chinese manufacturers will face tough international competition in the future.” Mr. Wang, mentioned above, explained the recent developments as follows.

“The domestic production of photovoltaic power generation facilities has already become a subject of study at the government level of various countries. , supports their own companies through subsidies, etc.”