China is reportedly planning to impose restrictions on expansion of solar equipment production to tackle overcapacity in the industry in the face of falling domestic installations, a draft plan issued by the country’s industrial ministry showed on Friday.
According to Reuters surging manufacturing capacity helped to spark grid price parity, where electricity from solar and coal are priced the same, but also led to a severe supply glut in the Chinese market and encouraged producers to dump cheap Chinese products abroad.
Ministry of Industry and Information Technology (MIIT) said “(We will) strictly control the solar equipment manufacturing projects whose solo purpose is to expand capacity,” reports the news agency.
China, the world’s biggest manufacturer of photovoltaic products, had silicon wafer production capacity of 173.7 gigawatts (GW) by end 2019, accounting for 93.7 per cent of the world’s total, according to China Photovoltaic Industry Association.
It also took 77.7 per cent of the world’s solar panel production capacity, 69.2 per cent of photovoltaic modules capacity and 69 per cent of polycrystalline silicon capacity in 2019.