How Will China’s Photovoltaic Industry Navigate the New Cycle?
On March 6, 2023, Liu Hanyuan, a representative at the National People’s Congress and chairman of Tongwei Co., expressed optimism about the future of the photovoltaic industry, stating, “In the long run, the development of the photovoltaic industry is just beginning.” Since 2022, driven by strong demand, improved profitability, and smooth financing, the capacity across various sectors of the photovoltaic industry has rapidly expanded. Last year, China’s photovoltaic production saw over a 10% year-on-year growth in polysilicon, silicon wafers, batteries, and modules. However, this growth has also brought challenges, including a temporary supply-demand imbalance.
The issue of how to navigate this new industry cycle has become a focal topic for representatives in the photovoltaic sector during this year’s National People’s Congress sessions. Liu Hanyuan remains optimistic, viewing the current challenges as temporary.
As the industry seeks to overcome these cycles, the strategy of “coming together for warmth” has emerged. Liu revealed that over the past few months, regulatory bodies, associations, and leaders of major companies within the photovoltaic sector have engaged in multiple discussions. Although the collaboration is still in progress, they expect to see preliminary results by mid-2023. This collaboration signals deeper synergy within the industry chain.
Zhong Baoshan, chairman of LONGi Green Energy Technology Co., believes that future advancements should focus on original technology. He advocates for the implementation of a “chain master” and “circle master” cultivation plan to support core enterprises in forming collaborative innovation ecosystems with universities, research institutions, and other players along the industry chain to enhance overall competitiveness.
Similarly, Gao Jifan, chairman of Trina Solar Limited, has suggested enhancing the industry ecosystem’s collaboration and cohesion through mergers and acquisitions, joint innovation, patent alliances, and cross-shareholding.
Industry analysts note that the photovoltaic supply chain is extensive, involving various sectors like silicon materials, silicon wafers, and battery cells. Cooperation between upstream and downstream partners can help reduce costs, increase efficiency, and mitigate risks.
Technological innovation is another critical factor for the photovoltaic industry in overcoming these cycles.
According to Zhong Baoshan, China’s photovoltaic technology development has entered an “uncharted territory.” He emphasized that future growth cannot rely solely on acquiring foreign advanced technologies, patents, or experiences; instead, strengthening independent innovation is essential for breakthrough growth. “True development and leadership depend on self-innovation and original innovation,” he added, noting that raising technical and quality standards is the most effective way to address supply-demand imbalances.
Gao Jifan called for deeper integration of technological innovation and industry innovation to enhance the efficiency, lifecycle, and competitiveness of photovoltaic cells. He also stressed the importance of combining technological innovation with intellectual property protection, advocating for a dual focus on both areas.
In recent years, the “new three items”—electric passenger vehicles, lithium batteries, and solar cells—have become popular exports for China. Liu Hanyuan believes that when exporting photovoltaic products, companies should tailor their strategies to fit the specific conditions of different countries and regions. “Controlling the pace” is key to successful international expansion, meaning that while promoting Chinese products globally, it is also crucial to assist in the development of local industries.
He is confident that with strategic adjustments within the industry, China’s photovoltaic sector will leverage its market share and scale advantages to create a scenario of rising prices, fortified international competitiveness, and enhanced research and production capabilities—resulting in a win-win situation for all involved.
