Chinese Government Pushing For Major Consolidation Of Solar PV Manufacturing Companies

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The Chinese government — through the Ministry of Industry and Information Technology — is now pushing even harder than before for a “major” consolidation of the country’s solar PV manufacturing industry, as per recent reports.

The calls for consolidation are accompanied by new government guidelines regarding industry consolidation — at the heart of these new guidelines is the number of “sustainably operating” companies that the government wishes to see the industry consolidated into by the end of 2017.

China flag

That number, to be precise, is 10 — 10 “major” PV manufacturers supplying 70–80% of domestic demand by the beginning of 2018. Which ten companies the Ministry wants is of course unstated (publicly anyways).

The idea is for these 10 consolidated super-companies to form the heart of the solar PV industry in the country. Interestingly, these companies will receive notable governmental support — including a variety of different types of support across the “federal,” state, and regional levels.

As far as the specific polysilicon sector goes, the Ministry is looking for ~5 producers to be providing ~80% of domestic production by the end of 2017. Given the huge number of polysilicon producers operating in China before the price collapse, that number represents an incredible decline in numbers.

Of these unnamed “5 producers,” it seems that two are very likely to be GCL-Poly, and Daqo New Energy — both of which have been increasing their production numbers recently.

As part of the information accompanying the new guidelines, the Ministry also noted, in some detail, some of the “problems” that have held up the process of consolidation in the past — as well as outlining the broad variety of support available to those participating in said processes now.

Image Credit: Public Domain

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James Ayre

James Ayre'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.

James Ayre has 4830 posts and counting. See all posts by James Ayre

4 thoughts on “Chinese Government Pushing For Major Consolidation Of Solar PV Manufacturing Companies

  • So does that mean, that the current PV manufacturing industry in China is not sustainable?
    So in the end Solarworld was right all along and it was all about price dumping without any real competitive edge?

    • No. If I had to guess this is probably about slaying zombies. In China the state provides cheap loans to manufacturers with the cheap money obtained by stealing from worker’s bank accounts through inflation. But sometimes financial discipline is lacking and a company ends up uncompetitive but the access to cheap capital means it can continue to stagger on in a half dead state for a long time. So in an attempt to slay these zombies the ministry in charge can arrange to have them taken over by healthier companies with better fiscal disipline. (Or simply better luck, as is often the case. Sometimes the sort of luck that can result from the Minister being one’s brother-in-law.)

      • I got curious about this article and especially that there were no links to any further or expanded information. So a Google search turned up some strange results, out of the first six five just led back to this same article, though under different titles and sites.
        The sixth was a Stanford report from back in June explaining how this has been basic government policy due to the market collapse since 2012 and is an ongoing effort.
        Now whether Mr Ayres has some more recent information as to this being more encouraged, or if it has just taken him this long to get the basics of the situation to us, I don’t know.
        But it seems that the Chinese government is just trying to see that the most efficient companies survive to ensure delivery for their own requirements and demand from the worldwide market.

  • all governments should do so, instead of imposing import fees.

    affordable Solar Panel production is needed all over the world.

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