fbpx

Type to search

Beijing Moves to Prop up Solar Panelmakers Hit Hard by Price War

Officials pledged on Thursday to help the photovoltaic industry, as top solar manufacturers have suffered losses amid huge overcapacity and a long price war


Governments need to be more proactive and must invest, and use tax and regulatory levers to speed up the transition to clean energy, leading economists say.
Workers install a solar panel in Jiuquan, China. Photo: Reuters

 

Officials in Beijing have vowed to curb disorderly price-cutting in the solar sector in a bid to prevent further financial losses caused by vicious competition between companies producing solar panels.

The industry ministry pledged on Thursday to help prop up the photovoltaic industry, as many of the country’s top solar manufacturers have suffered losses because of huge overcapacity and a prolonged price war.

Most of the world’s solar farms are powered by cells and modules made in China, but the country’s top producers are facing billions of dollars in losses as breakneck competition has pushed prices below cost level.

 

ALSO SEE: How China’s New Auto Giants Raced Ahead of The World

 

China solar module prices as of the end of May were down nearly 30% from a year earlier, and uncertainty about demand for cells and modules has complicated matters as Beijing is scaling back subsidies for renewable energy projects after the boom in solar and wind power installations.

New solar plants commissioned after June 1 will have to sell their power into the market instead of receiving a guaranteed rate benchmarked to the price of coal.

In a meeting on Thursday with solar companies and industry association representatives, Li Lecheng, head of China’s industry ministry, said authorities should guide companies to improve quality and “promote the orderly exit of outdated production capacity,” according to a statement released by the ministry.

The ministry will step up guidance and governance for the industry, Li said. He also urged industry associations to take responsibility for improving industry self-discipline.

Earlier this week, China’s senior leaders said they would tighten regulations to deal with aggressive price-cutting by Chinese companies.

Separately, China’s top solar panel manufacturer LONGi Green Energy Technology told state media Securities Times on Thursday that it would accelerate the commercialisation of high-efficiency products to overcome the low-price dilemma.

It added that market share for “high-quality capacity” in the sector would grow more quickly after “outdated” capacity is phased out.

 

  • Reuters with additional input and editing by Jim Pollard

 

ALSO SEE:

China Passes 1 Terawatt of Solar Power, Government Says

Floods Swamp Cities in Southwest China, And More Storms Due

Firms Underestimating Risks From Carbon-Fuelled Climate Change

Carbon Removals Not Growing Fast Enough For Climate Goals

Climate Change Has Cost China $32 Billion in Just One Quarter

Decline in China’s Solar Output Seen Due to Oversupply – PV Mag

China’s Billion-Ton Coal Expansion Plan Sparks Methane Fears

Booming Solar Puts 2030 Renewable Energy Goals ‘Within Reach’

Chinese Solar Giants’ Profits and Revenue Plunge in First Half

China Wind, Solar Capacity Set to Outstrip Coal For First Time

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.