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Published on January 2nd, 2013 | by James Ayre

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China Announces Large-Scale Overhaul Of Its Solar Panel Industry

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January 2nd, 2013 by
 
 
The government of China has announced a major overhaul of its solar panel industry. It will be actively encouraging mergers among producers of solar panels, reducing government support, and “blocking” local leaders from “supporting domestic producers.” And there has even been some talk that some producers will be allowed to go bankrupt.

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The overhaul is designed to simultaneously strengthen the industry, which has suffered some setbacks recently, and also to address the concerns that the US and Europe have raised about the Chinese government violating trade rules. The Chinese solar panel industry has recently experienced large losses as a result of price-cutting wars between the producers and excessive production capacity.

The statement that the government released didn’t specify any details, but it did clarify that it views solar power as one of many “strategic emerging industries” that it considers important to develop.


 
“Chinese solar manufacturers have reported hundreds of millions of dollars in losses this year due to lower prices and slower sales following the 2008 global financial crisis,” the AP noted.

So far, the industry there has racked up debts of around $17.5 billion dollars, based on a report released in 2012 by a New York financial firm, Maxim Group.

The US, Europe, and India have initiated or completed investigations into unfair Chinese subsidies for Chinese solar firms. While China has denied this, the country and its solar companies have not convinced US investigators, and probably won’t convince European and Indian investigators. Thus, it is not surprising to see the country cutting its support for its solar firms.

Source: US News
Image Credits: Photovoltaics via Wikimedia Commons

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.



  • http://www.facebook.com/johnjaygebhardt John Jay Gebhardt

    The rest of the world needs to thank China for investing in solar. Not punish them.

    • tibi stibi

      true true and true!

      china is paying so we can solve our problems! thanks china!!

  • http://www.energyquicksand.com/ Edward Kerr

    What I could never understand was, if the Chinese wanted to subsidize solar panels, why weren’t we dancing in the streets(?) The need to produce electricity without burning coal and NG is so important globally who cares where the panels are produced. But, alas, when the almighty dollar is the focus you get tariffs.

    • Bob_Wallace

      It has to do with protecting American jobs.

      If we allow China (or any other country) to use government money to subsidize one of their industries and put our similar industry out of business then we could see a systematic destruction of all our manufacturing.

      I totally agree that lowering the cost of solar panels is a great thing. But panel prices are low enough compared to the rest of the system. With panel prices now close to 50 cents per watt it’s time to get the US average price of around $3.50/watt down by acting on the parts that make us $1.50/watt more expensive than Germany.

      • http://www.energyquicksand.com/ Edward Kerr

        No Bob. it’s about protecting the profits of American panel Mfg. We’ve been shipping job to China, Mexico, India etc…etc..for decades. So now, all of the sudden it’s “American Jobs”…sorry Bob I don’t buy it.

        • Bob_Wallace

          OK, you don’t buy it.

          But I suspect you haven’t considered that US manufactures can take their plants to Asia. US workers can’t really commute to China.

          I buy it.

          • arraysolar

            Why fixate on the per watt price? If you are talking about jobs-the installers jobs in California arent in China they are in California right?

          • Bob_Wallace

            Because we were talking about manufacturing, not installing.

          • tibi stibi

            when energy gets cheaper all business will benefit. so china is actually subsidizing all company’s in the usa who need energy!

            thanks you china!!!

          • http://zacharyshahan.com/ Zachary Shahan

            unless they happen to kill competition and limit technological progress by oversubsidizing manufacturers so much that other manufacturers (perhaps better ones) can’t make a profit.

      • SolarLover

        Bob – then do you also fight against the US government for anticompetitive behaviour in airline manufacturing industry or defence industry – where the government gives big financial aid aka subsidies?

        • Bob_Wallace

          I think the rewriting of the Air Force tanker specs in order to ice out non-US builders was a POS.

          I’m not aware that the US government gives Boeing money so that they can under price European or other aircraft manufacturers and force them out of business.

          If so, I think it wrong.

    • http://zacharyshahan.com/ Zachary Shahan

      I was in the same boat on this, but one argument sort of tipped the scales for me, or has at least left me in limbo: by unfairly subsidizing solar companies (seriously subsidizing them, to the point where they are only succeeding because of the subsidies), other solar companies that are doing a better job of advancing the technology (and are driving costs down through innovation and competition) go out of business. So, in the medium- to long-run, if the subsidies are as bad as contended, the solar industry and solar prices are actually hurt more than helped. Focusing subsidies on the demand side of the equation rather than the supply side would do better to stimulate growth in a sustainable way… but that wouldn’t steal manufacturing jobs away from other countries for your own. At this point, I think I’m happy about the China tariffs, as it is focusing China’s efforts more on stimulating demand than artificially lowering solar panel prices on the manufacturing end. But it’s a complicated matter, and I wouldn’t say I know enough about the details to have a strong opinion on this matter.

      • where’s my jetpack?

        I would say that if there is a tech ready to succeed, one that is viable and profitable, it is more than likely to succeed, regardless of the short term dynamics, which are significant for existing tech. Companies that want to profit from a profitable tech will gladly pay pennies on the dollar for a good idea and solid tech that hasn’t been made into a proper business case. They will ramp it up and sell it like the others. Shame the $$ won’t stay with inventor and local area of inception…but that seems rather insignificant given coal plants are still being built every week and original business could have opted for a different plan for development in a hostile market force environment.

      • Arraysolar

        Im dealing with two Chinese companies right now. If the market price for PV is US$.80 per watt, then a 3k/w system with 15 panels and an inverter should cost no more than US$3000? So why is it so expensive in Germany and the US? The Chinese problem is marketing outside China, their attempts are clumsy and childish when dealing with English speaking cultures. They need to get this right then they dont need to be accused of price fixing.

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