solar PV now a driving force behind national economy

NEA (National Energy Administration) reports that 78.42 gigawatts (GW) of solar power was added in H1 2023, bringing the country's total installed capacity up to 470 GW. This indicates a y-o-y increase of 154 percent, aligning closely with the total additional instalments of 2022, reports China Times.

It is also estimated that the PRC's exports of PV (photovoltaic) products (including silicon wafers, cells and modules) reached a total value in H1 2023 above US$29 bn, up 13 percent y-o-y, according to CPIC (China PV Industry Association). CPIC has also revised its forecast for PV installations this year, with

• the global estimate adjusted up from 280-330 GW to 305-350 GW
• the PRC's estimate adjusted up from 95-120 GW to 120-140 GW

Export growth may slow in the second half of the year, says Wang Bohua 王勃华 CPIC honorary chairman, noting application procedures in the European market are becoming more complicated. Although the relevant procedures are being simplified, they are constrained by issues such as labour, land and power grid consumption, he says. In addition, distributors have high inventory levels. However, Africa is growing fast, he notes, but the base is small and will not bring much impact.

The solar PV industry has undeniably emerged as a prominent driving force behind the national economy, proclaimed Wang during a recent seminar. The production figures in H1 for polysilicon, silicon wafers, batteries and modules have already, he said, surpassed the entire output of 2021, comprising 65 percent of last year's total, with

• polysilicon reaching 600,000 tonnes, up 65 percent y-o-y
• silicon wafers exceeding 250 GW, up 63 percent y-o-y
• cells exceeding 220 GW, up 62 percent y-o-y
• modules exceeded 200 GW, up 60 percent y-o-y

H1 saw a significant drop in prices along the PV industrial chain, particularly in silicon materials and wafers, according to Han Xinkuo 韩心阔 Baichuan Yingfu PV analyst. In his assessment, the PV industry's profit dynamics underwent a noticeable shift during this period; previously, profits were concentrated in the polysilicon segment, but in H1 they spread from upstream to downstream and auxiliary materials. Enterprises involved in quartz crucibles, as well as PV modules, cells and brackets, experienced prosperous outcomes, while the growth rate of silicon wafer enterprises' profits decelerated significantly compared to the previous month.

Despite the favourable global trends, the PRC's PV industry faces new challenges from the international situation, says Yang Xudong 杨旭东 MIIT (Ministry of Industry and Information Technology) Electronic Information Department deputy director. This might suggest the impact of various factors on the industry, such as trade dynamics, geopolitical shifts or changes in market conditions, Yang says.

Additionally, Yang notes that in the process of accelerating high-quality development, the PRC PV industry is encountering internal challenges that require attention, including

• the rapid growth in scale, which may lead to potential supply and demand imbalances in the industrial and supply chain; this could lead to new low-level and disorderly competition, which may hinder the industry's sustainable growth
• the need for a more forward-looking technology layout and tech research to support the industry's continued advancement; investing in R&D is vital for maintaining the PRC's competitiveness and leadership in the global PV market
• the recycling of decommissioned PV modules has emerged as a new issue; to ensure a greener and more sustainable approach to the industry, it is crucial to address the green cycle and full life cycle management of the entire PV industrial chain

There are currently three major external risks and challenges, Wang Zhenfu 王振富 Ministry of Commerce Trade Remedy and Investigation Bureau deputy commissioner points out, noting

• traditional trade remedy measures and tariff barriers still exist
• the risks of foreign industrial competition and supply chain security are increasing; major overseas PV markets such as the US, EU and India are actively deploying manufacturing localisation policies and increasing subsidies and support for domestic industries
• new trade barriers, like human rights and green standards, are increasing

The continuous growth of PV installed capacity has spurred a frenetic influx of capital into the PV industry. Leading enterprises from various sectors, including home appliances, toys, animal husbandry and real estate, are eagerly investing in the PV sector, the article notes.

Regarding the focus on installed capacity in the PV industry, Wang Bohua highlights three major domestic areas awaiting investment, namely

• large new energy bases situated in deserts, like the Gobi and other regions identified as prime locations
• integrated development of PV and transport; Shanghai has taken the lead in this, issuing documents that cover 17 ‘PV +’ application scenarios encompassing a diverse range of applications, including subways, airports, ports and buses
• offshore PV is also experiencing a surge in large-scale development and both local governments and enterprises have responded positively to NEA's issued guiding documents