China’s excess solar capacity a product of tech transition, market forces, energy official says
- The head of China’s energy administration has said the country’s high solar capacity is an outgrowth of industrial transition, and the market will eventually correct itself
As China’s solar industry transitions into an era of new technology and practices, it will take time for the consequent excess capacity to be absorbed by the market, said the country’s top energy official at a press conference on Thursday.
“The upstream of China’s photovoltaic industry is dominated by private firms, and competition is sufficient among them. As the future of the market looks bright, they have chosen to expand production,” said Zhang Jianhua, director of the National Energy Administration (NEA).
“The coexistence of old and new production types during the technological conversion period has pushed up the total capacity of the industry,” he said.
NEA officials vowed at the conference to provide guidelines for rational planning in the sector, and avoid the redundant construction of low-end production.
The balance between supply and demand is relative, and imbalance is often the norm
Zhang said any issues with production capacity should be viewed with the principles of a market economy in mind, and in the context of economic globalisation.