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China to continue pushing for higher efficiency solar power plants to reform its industry

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Higher Efficiency Solar Companies to survive in China

China is the world’s largest solar market with more than 16 GW of solar installation in 2015. The country which has the world’s largest solar manufacturing industry with most of the top 10 solar panel makers located in the country, is trying to reduce overcapacity and weed out the weaker players. Solar energy saw a massive boom during 2009-2011, when hundreds of small companies set up solar production facilities in China due to easy credit, free land and loans from local governments. This has led to a period of huge overcapacity, which led to a precipitous fall in solar panel prices. Many of the smaller companies have gone bankrupt, while other are operating like zombies. While the biggest companies such as Trina, Jinko Solar and others have recovered from the downturn and are posting profits, many of these smaller companies continue to operate using doles from the local government.


The Chinese central government wants to reform the industry and bring in better technology and scale. It has planned to make the industry sustainable by having only 10-15 large companies operating. These plans have not succeeded till now, as local government keep bailing out the companies through state owned investment funds and cheap loans from government banks. The central government has mandated that 3 GW of the total 15-20 GW of solar installation in 2016, have to come from solar power plants using higher efficiency silicon solar panels. These products are only made by large solar companies in China, who have invested in new technology and equipment. The smaller companies will not be able to use their strategy of selling low quality products at low prices to win these orders. The central government is trying to circumvent local government, in order to kill these small zombie like companies.

I think that the central government policies will not work as they intend to do so. Rather the current Chinese hard landing will do what the government wants. As credit becomes harder to attain amongst bankruptcies, the smaller companies with losses will automatically fold up. The local government may not have any funds to prop up their local favorites. Even the Chinese state owned banks will not have funds, as NPA problem becomes apparent. Some analysts have estimated that Chinese banks may have NPAs between 10-20%, which they are hiding. Official estimates of NPAs are only 1-2% which seems implausible. There is no doubt that Chinese industry will go through a major overhaul in the next couple of years, as the economy goes through a major credit crisis. Only the biggest and high quality companies can be expected to survive.

Source – DigiTimes

China, to boost the PV industry under the 13th Five-year National Development Plan, has set a target installation capacity of 3.0GWp for model PV power stations to be set up in 2016, according to the government National Energy Administration (NEA).

Model power stations are required to use PV modules made of solar cells with higher energy conversion rates, NEA said. In 2016, modules used in general PV power stations must be made of mono-Si solar cells with a minimum energy conversion rate of 16.0% or poly-Si cells of at least 15.5% in energy conversion rate, NEA indicated.

But for model PV power stations, the respective minimum energy conversion rates are 17.0% and 16.5%, translating into minimum power generation of 275W and 330W for a PV module made of 60 and 72, respectively, mono-Si cells and 270W and 325W for a module made of 60 and 72, respectively, poly-Si cells, NEA explained.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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