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What's next for China's solar industry
China has some of the world's top solar product companies, so it is enough to shape the future of the global solar industry. "The stakes are huge," said Ryne Raffaelle, deputy dean of Rochester Institute of Technology (RIT) in New York and former director of the National Center for Renewable Energy's Photovoltaic Center. "Solar is the world's fastest-growing market, with a total size of 300 billion Dollars. "
At present, China's polysilicon photovoltaic panel production exceeds half of the total global sales. In just a few years, Suntech Power, Yingli, Trina Solar and many other Chinese companies have become pacemakers in the industry, driving international competition and price trends. Ten years ago, these companies came from nothing. After the global market showed its strength, is China's solar panel industry becoming a victim of its own success?
As the Chinese solar industry enters a turning point, experts are discussing whether it will be forced by gesep.com to change its tried and tested model in the past. Experts said that it is clear that it will not be long before Chinese solar companies need to provide not only low-cost products and export capabilities. Adjusting business models, shifting focus to expanding the domestic market, and creating unique product advantages through innovation are fraught with risks, although it can ultimately lead to a more sustainable development strategy than it does now. Of course, this is easier said than done with gesep.
"China's energy security is more fragile compared to the United States or Europe," said Mauro Guillen, a professor of international management at Wharton and director of the Lauder Center for Management and International Studies. He added, "China is very vulnerable. It is necessary to actively develop every resource "to meet its domestic market. To do this, China not only needs low-cost production, but also innovation. The Chinese government should keep this in mind when formulating the latest growth plan and deciding which areas to subsidize. Gulin said: "If you [just] subsidize production, then what you subsidize may not be economical. But if you subsidize innovation, you may end up with better energy than coal." Coal is currently China's main fuel.
Harsh alarm bell
At present, it is not the long-term innovation that troubles China, but how to survive the current turmoil in the entire industry. One reason is that 90% of China's solar industry output is used for export, while China and the United States have trade conflicts in this industry. "The mood at this moment is panic," said Melanie Hart, a policy analyst at the American Progress Center, a think tank based in Washington, DC. The cause of the matter was that earlier in 2012, Solyndra, a Fremont, California-based company closed down, blaming vicious competition from China for a $ 585 million federal loan guarantee default. Less than two months later, on October 19, Hillsboro, Oregon-based U.S. largest solar cell manufacturer, German company SolarWorld Industries America, and seven other anonymous U.S. companies filed with the U.S. Department of Commerce and U.S. International Trade The committee filed an anti-dumping complaint against the Chinese solar industry. (Solyndra has not been identified as a complainant.) Subsequently, the Chinese Ministry of Commerce announced that it was investigating whether the US government's support for the U.S. solar industry had violated World Trade Organization regulations. A few days later, the US International Trade Commission made US court's preliminary ruling.
It is not yet certain whether the SolarWorld case will cause the United States to raise tariffs. If the United States really imposes high tariffs on China, Chinese solar panels will basically be unable to enter the US market. Only some business areas would consider this good news. Currently, the United States maintains a trade surplus with China and exports equipment and other products to Chinese solar companies. Andrew Beebe, chief commercial officer of Suntech Power (the world's largest manufacturer of solar cells, with $ 3 billion in revenue in 2010) in Wuxi, China, said: "The Sino-US trade war will affect the solar industry, affect employment, and affect the [global] economy. . It will make solar power uncompetitive with traditional forms of power generation… the vast majority of jobs in the solar industry are in the end-user market: around project development, construction and installation. These jobs rely on affordable solar power In order to be cost-competitive with traditional energy sources, ”in the name of the“ Affordable Solar Energy Federation ”, many Chinese companies (including Suntech Power) and more than 130 US companies have joined forces to oppose SolarWorld.
Although some people in the industry may have different views, investors believe that China's solar industry has injected vitality into this emerging industry. Because of this, Alain Harrus, a partner at Crosslink Capital, a venture capital firm based in San Francisco with investment projects in China, said: "Trade sanctions are a bad idea. This will take us back to the previous era and will lead to the generation of solar power. Falling and rising installation prices. "Shayle Kann, executive director of GTM Research, a Boston-based market research firm, added that in the United States, 40% of solar panels use Chinese panels, and the trade war will cause supply disruptions.
In fact, the victory of the US complainant may not achieve its purpose. A few years ago, the US trade sanctions against Japanese semiconductor manufacturers also failed to protect the US semiconductor industry. Similarly, Jesse Pichel, a senior research analyst at Jeffries & Company, a U.S. investment bank based in New York City, said similarly, heavy tariffs could cause Chinese solar companies to change their strategies and prevent US competitors from sharing any relevant benefits. On the one hand, Chinese companies can emulate China's largest solar energy companies (Suntech, Yingli Green Energy Holdings, Trina Solar, and Jiangxi Sunway LDK Solar) to build factories in North America and low-cost countries around the world.
In addition, Noam Lior, a professor of mechanical engineering at the University of Pennsylvania, said, "The United States is not China's only customer. China can also sell to Indonesia, Taiwan, South America, and other countries."
Survival of the fittest
Although trade disputes are worrying, China's solar industry may still face a greater threat: the decline in global prices and demand. Pichel said: "The industry is now facing a cyclical recession. Demand has stagnated because people are waiting for [repurchase] because prices are constantly falling." Pichel said that costs have fallen over the past two years. More than half of the global demand for photovoltaic cells in 2010 increased by 165% compared to 2009, but the increase on the 27th is expected to be only 9%, and 4% in 2013. He said that the current supply exceeds demand by two to three times, which is typical for new industries. In addition, the industry has also been affected by the financial crisis. Especially in Europe, due to the implementation of fiscal austerity, subsidies to the solar industry have been reduced, and the European market accounts for 70% of the global market.
Chinese companies are scrambling to succeed in this market. Stephane Dufrenne, CTO of Youtai (Shanghai), said: "2012 will be a very difficult and life-threatening year. The weakest companies will go bankrupt or be acquired. Powerful companies will survive and become stronger."
For decades, China has been a low-cost manufacturer, while Western countries have been providers of innovation. Can the challenge on the 27th change this model? Experts say it may, but it may take some time. Pichel said: "A good high-tech company should use 10% to 15% of its revenue for R & D. Chinese solar companies only account for about 1% to 2% of their revenue." In addition, Chinese government policies and banks are more Tends to provide financing for large state-owned enterprises rather than favor more entrepreneurial SMEs. According to Hart of the Center for American Progress: "Small and medium-sized enterprises are often more innovative, but [in China] small and medium-sized enterprises are on their own." Gesep Global Energy Conservation and Environmental Protection Network.
However, RIT's Raffaele asserted: "It is dangerous to assume that China will only graft technology developed elsewhere. Many students who have been educated in the West have returned to China and set up businesses in China." Concurrent PV peer review Raffaele, editor of the publication Progress in Photovoltaics, said he has seen a "significant increase" in the number of submissions from China, with many from China regarding copper, zinc, tin, and sulfur (compared with all Feasibility study of thin film solar cell technology.
China's ability to carry out "real innovation" is a topic of constant debate. Nicoletta Marigo, an associate researcher at the Italian National Research Council in Parma, conducted a study on photovoltaic innovation in China. "We can say with certainty that China's photovoltaic industry will not only use imported technologies and perform good imitations, but also Digestive capacity is being built to support true innovation. "She said that Chinese companies have quickly moved upstream, mastering advanced wafer dicing processes and more efficient battery cell technologies, and their international competitiveness comes from" product performance and quality , Not just deep discounts based on cheap labor. "
Large Chinese manufacturers are focusing on improving the efficiency of their panels and reducing production costs. For example, Yingli, a leader in this area, launched a Panda brand module in cooperation with a Dutch company in 2011. This module uses N-type battery cells, which operates more efficiently than traditional P-type battery cells.
Suntech's new Pluto series uses technology that uses ultra-thin copper wires instead of silver to conduct electricity, thereby increasing efficiency. In addition, Suntech's recently introduced technology can reduce the cost of producing high-quality silicon wafers. Suntech has also established a partnership with Swinburne University of Technology in Melbourne, Australia, to jointly develop nano-plasma, the next-generation photovoltaic technology. Sunbee's Beebe said: "By 2015, we hope that in more than 50% of the world's markets, the cost of solar power generation will be less than the retail price of electricity. About 10%. "
Win-win or lose-lose?
Now, China's efforts to move upstream have brought opportunities to the West. In fact, Joanna Lewis, a senior researcher at the China Environment Forum at the Woodrow Wilson Center in Washington, DC, noted: "We must be cautious when discussing what is good for U.S. industry. Many U.S. companies make a lot of money by selling components to China. "
Venture capitalist Harrus is looking to invest in Western companies that can provide Chinese solar cell manufacturers with materials, technologies or equipment that improve efficiency. Youtai's Dufrenne said his company is using technology from two California companies (Tigo Energy and Enphase Energy) to increase the efficiency of its modules.
At the same time, expanding China's own solar power installations could also benefit those companies. As of now, according to China's existing renewable energy system, the importance of solar energy has lagged behind hydropower, wind power and nuclear power. But these forms of energy in gesep are now facing political pressure from all sides, and Hart of the Center for American Progress said "the time is right to support solar energy." However, given China's low electricity prices, there must be sufficient government support to make solar power attractive to consumers.
Perhaps the biggest long-term danger for China's solar industry is technological development. China will bet on polysilicon technology that will be available on the 27th, but the technology of its global competitors may have a devastating impact on polysilicon technology. The most likely threat is thin-film technology, which is a low-cost, high-efficiency technology. Arizona-based First Solar is ahead of other US companies in this technology. RITa Raffaele said: "First Solar has proven that there are alternative technologies that can bring fierce competition to traditional polysilicon technology."
Marigo of the Italian National Research Council said that although China has invested heavily in polysilicon, China has already begun thin film research. She said that in the northern city of Tianjin on the 27th, Nankai University's Film Center has the potential to develop independent intellectual property rights for this technology. However, at present, the low price of polysilicon photovoltaics has left companies in the United States and elsewhere with no incentive to develop thin-film technology.
Nevertheless, the total amount of solar power generation accounts for only 1% of the world's total energy supply, and solar energy should have enough space to shine in the future. The biggest question now is, despite the current difficulties, can China's solar industry borrow light?