China to Limit ‘Low-End’ Solar Manufacturing Capacity

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Workers inspect solar panels in November 2021 in a town in Tianchang, East China’s Anhui province. Photo: VCG

China’s energy regulator said that it will take steps to slow the breakneck expansion of the country’s solar industry, such as by limiting the addition of “low-end” manufacturing capacity, following industry leaders’ call for greater government intervention at a conference earlier this month.

The competition in China’s solar power industry is “indeed very fierce,” an official at the National Energy Administration (NEA) said at a press conference Thursday.

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China is implementing measures to curb low-end solar manufacturing capacity amid fierce industry competition.
China's solar power capacity surged, but excessive expansion led to overcapacity, profit declines, and plummeting prices.
The NEA intends to regulate the sector, promote technological advancements, and bolster solar infrastructure to sustain market health.

AI generated, for reference only

Who’s Who

GCL Holdings Co. Ltd.: GCL Holdings Co. Ltd., chaired by Zhu Gongshan, is a significant player in China's solar industry. Zhu highlighted at a June 11 conference that the industry's profits have dropped by about 70% due to rapid expansion, describing the situation as an "ice age." The company is actively involved in discussions about regulating the sector to prevent overcapacity and improve profitability.

AI generated, for reference only

What Happened When

As of the end of 2022：: China accounted for 89%, 97%, 86%, and 62% of the global production capacity of polysilicon, wafers, cells, and solar panels, respectively.

2023：: China's solar power-generating capacity increased by a record 217 gigawatts.

2023：: Over $130 billion was poured into China’s solar industry.

By the end of 2023：: China is expected to hold on to more than 80% of the world’s manufacturing capacity along the solar supply chain from 2023 to 2026.

Earlier this month in June 2024：: Industry leaders called for greater government intervention at a conference.

June 11, 2024：: Zhu Gongshan, chairman of GCL Holdings Co. Ltd. and the Asian Photovoltaic Industry Association, stated at a conference that companies' profits have tanked by about 70% and the industry has entered an 'ice age.'

June 20, 2024：: An official at the National Energy Administration (NEA) acknowledged the fierce competition in China's solar power industry and announced measures to slow the expansion of 'low-end' manufacturing capacity.

June 20, 2024：: Li Chuangjun, director at the NEA, outlined plans to guide the construction of manufacturing projects in upstream segments of the solar industry and release relevant information on the sector at 'an appropriate time.'