Chinese companies have dominated the world’s photovoltaic industry (i.e. solar panel production). The sector represents one of the “new three products” (new energy vehicles (i.e. electric vehicles), lithium batteries, photovoltaic products) comprising Beijing’s current industrial strategy. In 2023, China’s exports of the “new three products” totaled 1.06 trillion yuan (US$ 150 billion), surpassing the trillion-yuan mark for the first time. Within just half a year, however, the entire Chinese photovoltaic industry has fallen into a loss territory.
As of July 9, among the listed companies that have disclosed their mid-year performance forecasts, most companies in the photovoltaic industry are forecasting significant losses. Among them, seven companies – LONGi Green Energy, Tongwei Co., Ltd., TCL Zhonghuan, Aiko Solar, Shuangliang Eco-Energy, Jingyuntong, and Hongyuan New Energy – are expected to have loss exceeding 1 billion yuan each. LONGi Green Energy, the world’s largest photovoltaic company, indicates a net loss of 4.8 billion to 5.5 billion yuan. Its market value has fallen from its peak of 550 billion yuan to below 100 billion yuan.
In the past, China provided heavy national subsidies to the photovoltaic industry that had attracted many manufacturers enter this field, producing homogeneous products. By the end of 2023, China’s annual production reached 861 gigawatts, more than twice the global installation volume of 390 gigawatts. It is predicted that the capacity will increase by another five to six hundred gigawatts this year. It is estimated that China’s silicon wafer, battery, and module production capacity to be put into operation in 2024 will be sufficient to cover the global annual demand till 2032 (nine years).
Critics point out, “(China’s) support for the photovoltaic industry is a result of government policy, rather than market guidance. (The current overcapacity) was inevitable. It is a result of a planned economy that has mismatched production and market (demand).”
Source: Epoch Times, July 14, 2024
https://www.epochtimes.com/gb/24/7/14/n14290396.htm