[NEW YORK] Chinese solar sector luminaries offered solutions at China’s annual parliament that could help their beleaguered industry in the long-term – but not much to staunch the current bleeding.
Panel makers focused on improving the industry’s technology, expanding overseas trade and reforming China’s power markets at the National People’s Congress in Beijing over the past week. Less time was spent on fixes to the industry’s overarching problem – overcapacity that’s sent prices into a deflationary spiral and hammered profitability.
“The development of China’s solar industry has entered a no-man’s land,” Longi Green Energy Technology chairman Zhong Baoshen said on the sidelines of the meeting. “Breaking out depends on original technology and independent innovation.”
The growth of China’s solar industry has been largely driven by private firms, and their success has meant that many corporate leaders have been invited to join the country’s main legislative bodies. While these conferences are largely symbolic, they do give members a platform to discuss issues they see as most pressing.
For Sungrow Power Supply chairman Cao Renxian, whose firm produces solar inverters and battery storage units, that means the creation of electricity futures to help producers hedge growing price volatility as intermittent renewables become a bigger source of generation.
Longi’s Zhong pushed for increased research and development to deploy new products, such as roofs and other building materials that feature integrated panels. That could help bring more solar generation to China’s rural areas, creating more clean energy and providing an economic boost for poorer regions, he said.
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Wang Gang, chairman of glassmaker Shandong Jinjing Science & Technology, wants more support for perovskite, a next-generation solar film that could boost the power output of panels but remains commercially untested.
While such efforts may pay long-term dividends, they are unlikely to solve the industry’s more pressing problem with excess supply, which has driven prices to record lows and put pressure on corporate bottom lines. China’s seven major solar manufacturers posted a combined net loss of 28.4 billion yuan (S$5.2 billion) last year, Bloomberg Intelligence (BI) analyst Chen Chia said at a separate event in Beijing on Tuesday (Mar 11).
More important to the near-term success of the sector will be measures such as voluntary output cuts agreed to by more than 30 manufacturers. Such measures should start to pay off within months, Tongwei chairman Liu Hanyuan told reporters at the congress.
Analysts seem to agree, with the market consensus of those same seven major manufacturers rebounding to a combined net income of 10.5 billion yuan this year, BI’s Chen said. BLOOMBERG
