China is the largest market for solar thermal energy and photovoltaics. Since 2013, the Chinese solar industry has been the leading installer of solar photovoltaics in the world, with a total PV capacity reaching 77.4 GW in 2018. China also became the first country to pass 100 GW of installed capacity in 2017, with the industry also holding a global record for a 1,500+ GW project at Tengger, making it the largest solar operation in the world.
Despite the many gains created by the China solar industry, however, only 118 TWh are generated annually, with the average capacity factor at solar facilities being just 17%. Just 1.8% of China’s total electricity production comes from solar energy.
At the same time, about 290 GWth of solar water heating capacity is available in China because of industry efforts. That represents about 70% of the total solar thermal capacity currently installed.
Important China Solar Industry Statistics
#1. 705 of the world’s largest solar module manufacturers are located in China, which helps the industry achieve a 25.5% global share of the photovoltaic capacity currently available. (Statista)
#2. The total photovoltaic capacity accounts for about 1% of China’s total energy output at current rates. (Statista)
#3. China is ranked 7th in the world in terms of capacity per unit with their solar power industry, with 213 kWth per 1,000 people. (Statista)
#4. For 2018, the China Photovoltaic Industry Association (CPIA) expects that domestic cell manufacturing capacity will be operational at 57.7%. Only 66.5% of the wafer capacity is expected to be utilized as well. (PV Magazine)
#5. 20% of the costs associated with a solar project in China involve grid connections, financing, and land acquisition for domestic power consumption. (PV Magazine)
#6. Over 140,000 tons of polysilicon were produced in the first six months of 2018 by the Chinese solar industry, which was a 24% increase over the year before. Despite the improvements, the industry was also forced to import 67,000 tons to meet current demand levels. (PV Magazine)
#7. By June 2018, the price of polysilicon fell to below $13,500 per ton. (PV Magazine)
#8. The first half of 2017 saw a 39% increase in silicon wafer output by the industry, creating 50 GW of supply. 12 GW of the supply had to be imported. (PV Magazine)
#9. Cell output rose by 22% for the industry in 2017, with factoring producing about 42 GW of modules as PERC technologies rose in popularity. (PV Magazine)
#10. From January to May 2018, about $5.2 billion in exports were achiever by the China solar industry, which was up from $4.3 billion during the same period the year before. (PV Magazine)
#11. After the Chinese government halted subsidies for the industry in 2017, work on more than 11 MW of commercial and industrial distributed solar photovoltaic projects ceased. (China Dialogue)
#12. In 2017, there were 19.44 GW of new distributed solar added to the Chinese infrastructure, which was as much as the previous three years combined. Another 7.6 GW were added in the first half of 2018. (China Dialogue)
#13. The change in subsidy policy reduced the prices paid per kilowatt hour from 0.90 to 1.00 yuan to 0.50-0.70 yuan, depending on the geographic region where the manufacturing took place. The distributed solar subsidy was also reduced by 0.10 yuan per kWh. (China Dialogue)
#14. China produces 54.8% of the world’s supply of polycrystalline silicon within the global photovoltaic industry. They also produce 87.2% of the global supply of silicon wafers, 69% of the solar cells, and 71.7% of the solar modules. (China Dialogue)
#15. The move to reduce subsidies within the solar industry is expected to slash demand by up to 40% within the largest solar market in the world. (Forbes)
#16. Japan, India, and the United States make up about 30% of the world’s solar market. With China accounting for over half of all solar sales on its own, the reductions expected from reduced subsidies create the expectation of double-digit percentage losses in 2019. (Forbes)
#17. China’s state-run renewable energy fund, which receives funding through a surcharge that is placed on the energy bills of consumers, is running a deficit of more than $15.5 billion. (Forbes)
#18. Over 70% of the solar projects and large-scale wind installations in China are placed in the northern regions where there is low demand levels and few export opportunities. (Forbes)
#19. More than $86.5 billion was invested into the China solar industry last year, accounting for over half of the total amount invested globally into solar power. Since 2004, the world has invested almost $3 trillion into green energy sources, with China receiving a majority of those funds. (CNBC)
China Solar Industry Trends and Analysis
China announced in 2017 that it was rolling back the subsidies which were available in the photovoltaic manufacturing sector for the solar industry. Although the industry saw impressive growth in the first half of 2018, protectionism from the United States, combined with higher costs, has caused total manufacturing to plummet.
That combination of factors has created a scramble within the China solar industry to sell stockpiles around the world. Each provider is undercutting the other, attempting to secure whatever revenues are possible. With trade barriers expected from both the U.S. and India in this sector, there is a very real possibility the industry could begin contracting in 2019.
Only a political breakthrough will alter this trajectory for the next year, 5 years, or beyond. The Chinese government will either need to restore subsidies to encourage growth or negotiate against the threat of tariffs from two of its major export partners in this area. If neither happens, the losses could be very steep for this industry,
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