China’s solar panel makers to enjoy brighter outlook as plant shutdowns, scrapped expansions ease overcapacity crisis
- Producers have delayed or cancelled capacity expansion plans and even curtailed production, partially addressing overcapacity issues
- Companies including a dairy firm and a medical devices maker, which had drawn up unrelated diversification plans, have abandoned their projects
Several solar panel producers have delayed or cancelled capacity expansion plans and curtailed production entering 2024, with analysts expecting the trend to further accelerate this year, amid hopes it will solve the industry’s overcapacity issues.
“Considering the recent accelerated clearing of production capacity, we believe that the supply and demand situation of the photovoltaic industry could be corrected for the better in 2024,” said Wu Bohua and Cao Haihua, analysts at Changjiang Securities this month.
China’s installed solar electric power generation capacity rose by 55.2 per cent in 2023, adding over 216 gigawatts (GW) of solar power, data released by the National Energy Agency showed. Powered by this furious pace of expansion, the country is expected to meet its 2030 target of 1,200GW of renewable capacity five years ahead of schedule, according to analysts’ forecasts.
But the panel makers have added capacity at a faster pace with the result that despite the country’s record-breaking installation of solar energy under its 2060 carbon neutral target, China’s solar panel sector is grappling with overcapacity. This has unleashed a brutal price war, forcing many players to down their shutters.
According to a report from industry portal Century New Energy Network released this month, among the 58 listed Chinese solar PV enterprises that have issued earnings estimates for the year 2023, nearly half, or 25 companies, expect to report lower profits or even losses, a contrast to the rosy picture painted by China’s solar power installation sector.