Chinese Solar Giants set to grow even bigger with Climate Change driving Renewable Energy Demand

Large Chinese players have already increased their marketshare drastically in the last few years taking advantage of the shift in technology from multicrystalline silicon solar technology to monocrystalline solar technology with many of the Tier 2 and Tier 3 Chinese companies disappearing or becoming marginal. Companies such as Trina Solar, JA Solar, and Jinko Solar have become larger each year with many of them expected to ship more than 15 GW this year. Longi Solar has used its massive advantage in making profitable solar wafer business to aggressively expand and now become the No.1 module supplier in the world with expected shipments of more than 20 GW. Some companies which used to be major players earlier have become niche players (eg. GCL, Renesola, etc.). The large Chinese companies now plan to further expand their dominance with a target to more than double the capacity this year. The increasing concerns over climate change and the drive to net zero will drive the growth of the renewable energy market globally. With climate friendly governments in almost all major economic blocs operating now, solar energy expansion should get a boost.

Longi has plans to expand capacity to almost 50 GW which would make it the undisputed No.1 company and something akin to Samsung/Hynix in the memory chip business. Others are expected to follow suit. While there are fears of overcapacity, the upstream constraint in the form of polysilicon should keep a rein on prices as, without polysilicon, dumping of solar panels may not be possible. The price of polysilicon has increased in the past few months showing that there is a supply constraint in at least one part of the supply chain. There is a chance of the next transition of technology to IBC, hetero, or perovskites to kill at least one or two major companies as the capex and technology required may not be upto the capabilities of all companies. Tier 2 Chinese companies face the greatest threat as there is a lot of pushback against Chinese imports and products around the world, especially in the USA and India. This might curtail the ambitions of the Chinese companies to take away the entire market.