Chinese photovoltaic (PV) manufacturers strategically reduced production capacities due to intensifying competition and challenges stemming from extensive capacity expansion, as reported by Chinese state media Securities Daily.
Second and third-tier solar companies implemented production cuts to navigate declining product prices resulting from oversupply.
The solar industry, in an adjustment phase highlighted by insufficient capacity utilisation in various segments, experienced an 18.8 per cent month-on-month decline in silicon wafer production in October, according to Securities Daily’s report.
“When the overall price of the photovoltaic product supply chain was high in 2022, companies were optimistic about market growth and better profits, leading to announcements of large-scale production expansion plans. This intensified competition and caused prices to fall rapidly,” the report stated.
Bloomberg’s recent report also indicated that PV panel costs in China had plunged to an all-time low and continued to fall. Consequently, many Chinese manufacturers adjusted utilisation rates to align with market demand, prompting cancellations of expansion plans for 2024.
For most Chinese solar industry players, their opportunities exist overseas, according to a CEO of a major PV manufacturer.
“Overall, from a global perspective, the current energy transition trend heavily relies on Chinese manufacturing. China’s photovoltaic manufacturing holds a share of 80 per cent to 95 per cent in various stages worldwide,” the CEO said.
“Every Chinese company, at an appropriate pace and in a suitable manner, can expand globally.”
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