China Tightens Rules for Solar Manufacturing to Curb Overcapacity
China Tightens Rules for Solar Manufacturing to Curb Overcapacity
China has introduced stricter investment guidelines for solar PV manufacturing to address overcapacity and promote quality control in the sector.
cross-posted from: https://feddit.org/post/5134551
The Chinese industry ministry issued final – but not binding – investment guidelines for solar PV manufacturing projects after the local industry has been calling for government intervention to curb the booming solar manufacturing.
The government now wants a minimum capital ratio of 30% for solar PV projects, up from 20% previously. This ratio typically refers to the share of total investment shareholders invest with their own assets.
The manufacturing boom and the competition for market share have prompted some Chinese manufacturers to sacrifice quality for the sake of higher profits, an industry executive said earlier this year. Companies are looking to survive in the race to the bottom in China’s solar component market and some are skimping on quality and testing.
The Chinese solar panel market remains oversupplied and this glut could last up to two more years, Longi Green Energy Technology said in July.
The company, which is one of the world’s top solar panel manufacturers, warned it would book a loss for the first half of 2024, amid a fierce price war and overcapacity in the sector.
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