China Solar Panel marketshare increases to 70%

China has increased its dominance in the global solar industry, with the marketshare of its domestic solar panel makers now at 70%. Its marketshare of wafers is even greater at 76%, as the Chinese firms dominate all parts of the solar supply chain. The only part where it is weak is in polysilicon production, where it imported 100k tons of polysilicon as compared to ta production of 132k tons. Even this gap is reducing with major poly producers reducing their costs to $15/kg, which is competitive with other global poly producers such as REC, OCI and Wacker.

The polysilicon gap will reduce further with the Chinese government imposing anti-dumping duties on imports from Europe, USA and Korea. REC has been bludgeoned due to these duties and its US operations are in a bad shape, with inventories piling up. The company has decided to build a new FBR plant in China, to escape the wrath of the Chinese authorities. Though the other global majors such as Wacker and OCI have not made any plans to set up manufacturing in China, they will do so in future if they want to remain viable players. They are losing the technology advantage, with the Chinese companies decreasing costs sharply. Being a commodity, Wacker and OCI will have to think of new strategies as costs are no longer their forte.

More than 35 GW of modules were produced in China along with 30 GW of solar cells. The reason for the lower cell production was the ADD on China by USA, which has forced Chinese panel producers to outsource cell production to Taiwan. With even Taiwan included now, Chinese solar cell production should ramp up or go to other SE Asian countries. Trina Solar has decided to set up a 500-700 MW solar cell and module capacity in Thailand, to escape USA and European Duties. Hanwha Q Cells has also decided to set up a 300 MW module plant in Korea, to escape duties. It is tough to stop the low cost and government supported Chinese solar industry. The industry exported more than $14 billion in panels last year and reportedly employed more than 500,000 people. The industry will keep on growing for the foreseeable future and the Chinese production along with it.