As new entrants muscle their way into China’s solar sector, overcapacity and price war concerns mount

Global transition from fossil fuels to clean energy and a strong installation market have driven up demand for advanced solar-panel technology, Beijing new-energy firm executive says

Chinese photovoltaic manufacturers went through a brief price war from late last year to January due to the oversupply of solar wafers and slow solar power installation

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A worker installs photovoltaic power panels on a roof in Tangshan, Hebei province. China makes and supplies more than 80 per cent of the world’s photovoltaic panels, according to the International Energy Agency. Photo: Xinhua

Published: 7:20pm, 15 Feb 2023

Some Chinese listed companies in sectors unrelated to energy have recently entered the solar business, which is already forecast to go into oversupply with the biggest players aggressively expanding capacity as part of China’s renewable-energy push.

Last week, Shanghai-listed medical services provider Suzhou MedicalSystem Tech announced it is investing 1.86 billion yuan (US$272.4 million) in building a solar cell manufacturing plant in Mianyang, Sichuan province. The plant is expected to have an annual production capacity of 9 gigawatts (GW), and the company has signed an agreement with the local government to start construction within the next two years, according to Suzhou MedicalSystem Tech.

“The global transition from fossil fuels to clean energy and a strong installation market have driven up demand for [advanced solar-panel technology],” said Qi Haishen, president of The Solar, a Beijing-based new-energy firm. “It’s a good development opportunity for companies in the photovoltaics business.”

China makes and supplies more than 80 per cent of the world’s photovoltaic panels, according to the International Energy Agency. The country is set to add at least 570 gigawatts (GW) of wind and solar power in the 14th five-year plan period from 2021 to 2025, as it strives to achieve its net-zero carbon emissions goal by 2060, when non-fossil fuel sources will account for 80 per cent of its total energy mix.

Some of the solar sector’s biggest players have also made capacity expansion plans. Longi announced last month that it had signed investment cooperation agreements with authorities in Shaanxi province to construct a project with an annual output of 100GW of mono wafers and 50GW of mono cells.