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Chinese solar panel manufacturers are seeking immediate government intervention to limit investment and industry collaboration to prevent a drop in prices of solar cells and modules, as the industry faces overcapacity.
China has become the global solar panel factory due to financial incentives and government push, accounting for about 80% of global module capacity. According to some analysts, Chinese manufacturers are expected to add up to 600 GW this year, which will be enough to meet global demand through 2032.
However, industry analysts claimed that fierce competition was threatening to push smaller companies into bankruptcy as the price decline seemed to be unabated. Last year, due to rapid capacity additions, China's finished solar panels achieved price reductions of 42%.
According to the China Photovoltaic Industry Association (CPIA), between June 2023 and February 2024, at least eight companies cancelled or suspended more than 59 GW of new production capacity, equivalent to 6.9% of China's total finished panel production capacity in 2023.
Gongshan Zhu, chair of the Asian Photovoltaic Industry Association, warned new companies against rushing into the sector, saying industry profits had plunged 70% due to overcapacity and falling prices, while exports were curbed by trade barriers imposed by the United States.
Industry executives speaking at the conference also called for an end to race-to-the-bottom price competition and suggested bidding processes consider levels of research and development instead of just pricing. Some company officials, such as Wuxi Suntech Power Chairman Fei Wu, said consolidation had already begun. The industry's prospects were expected to worsen this year, and more small companies were likely to go out of business, he added.
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