China’s proposed move to limit exports of advanced solar technology to maintain its global industry dominance could end up hurting its own companies and slow down their expansion plans, according to analysts. Beijing is canvassing public comments for its plan to impose as-yet unspecified restrictions on the export of technologies used to manufacture large solar wafers, black silicon and ultra-high monocrystalline and multicrystalline silicon. The deadline for submission is January 28. These technologies increase the electricity output, thereby reducing the cost needed to produce each unit of power. They are key to accelerating the proliferation of renewable energy to fight global warming and climate change. The technologies were added to a list of items in the “restricted” category in a joint circular on export control published by the Ministry of Science and Technology on December 30. The proposed restriction could hinder the overseas expansion plans of Chinese solar equipment manufacturers, such as in Southeast Asia where they want to build efficient integrated wafer-to-solar panel production lines, Dennis Ip, regional head of utilities research at Daiwa Capital Markets, wrote in a note on Thursday. “Chinese players may also be hindered from developing wafer capacity in the US to obtain the relevant Inflation Reduction Act subsidy,” he added. The plan comes as Washington has taken steps to restrict China’s access to advanced semiconductor machinery, in a bid to thwart Beijing’s chip-building capabilities. Longi’s record-breaking solar cells will ‘take years’ to cut electricity bills Analysts said it is understandable for China to want to maintain its solar sector dominance for longer given the investment the nation has put in. The nation is the world’s largest installer of solar farms and the biggest maker of the equipment. The US, European Union, and India are stepping up efforts to develop their home-grown solar manufacturing industries. China accounted for 97 per cent of the world’s wafer production, according to an International Energy Agency report published in July. “Given the enormous amount of investments in related research and development over the past [few] years, China will want to secure and maintain its position as a technology leader,” said Frank Haugwitz, founder of the Asia Europe Clean Energy (Solar) Advisory. The technology and capital-intensive wafer industry presents a relatively high barrier for new entrants, as evidenced by the US$60 billion tax credit, loans and grants provided by the US government under the Inflation Reduction Act last year to support the manufacturing of clean-energy equipment in the nation, Ip said. “Yet, a complete ban on the export of supersized wafer technology may not be appealing to the Chinese solar players,” he added. China’s solar panel price war to drive renewable energy installations globally A larger wafer size increases the power output, thereby reducing the number of modules, solar panel materials, parts, labour and land needed to produce each unit of power. For example, compared with the previous mainstream modules using wafers with diameters ranging from 156mm to 166mm, modules incorporating 210mm wafers can reduce the per-watt system cost by at least 0.1 yuan (1.4 US cents), according to Jiangsu province-based Trina Solar, one of the world’s largest maker of modules that are assembled into solar panels. Modules using 182mm and 210mm wafers cost 1.75 yuan a watt, according to a Daiwa report on January 18, which cited PVInfoLink data. As China accounts for practically all of the global wafer production, the proposed export restriction will not have any discernible impact on global efforts to expand renewable energy production and decarbonise the power industry in the short term, Haugwitz said.