China's Photovoltaic Industry Welcomes New Regulations, Including Three Major Changes
On November 20, 2024, the Ministry of Industry and Information Technology of China issued an announcement stating that it had revised the "Standard Conditions for the Photovoltaic Manufacturing Industry" and the "Interim Measures for the Management of Standard Announcements for the Photovoltaic Manufacturing Industry", emphasizing the need to encourage intensive and clustered development of the industry, guide photovoltaic companies to reduce photovoltaic manufacturing projects that simply expand production capacity, strengthen technological innovation, improve product quality, and reduce production costs.
1. This Revision Mentioned The Need For Intensive And Clustered Development. Why Is This Encouraged?
This is because the current photovoltaic industry's production capacity is too decentralized, which has led to intensified competition in the photovoltaic industry, so that the price war is becoming more and more intense, and the ultimate losers are Chinese companies. Intensive and clustered development will make a reasonable allocation of production capacity and use scale to exercise the right to speak on prices.
In this way, the price of the photovoltaic industry will not be as low as it is now, thereby improving the competitiveness of the industry and enhancing the profitability of photovoltaic companies.
2. Guide Photovoltaic Companies To Stop Simply Expanding Production Capacity, Strengthen Technological Innovation, And Improve Product Quality.
This actually increases the added value of photovoltaic products, because only after technological innovation and the quality of products are improved, photovoltaic products can be sold at a better price, and the benefits will be greater than those of low-quality photovoltaics, and the profitability of the company will be significantly improved. With continuous improvement, this will undoubtedly extend the life cycle of photovoltaic companies.
The most important thing is that this is the way for photovoltaic companies to survive in the future. Only with technological innovation can companies have a steady stream of markets domestically and internationally. This is the fundamental solution to the contradiction between supply and demand.
3. New Photovoltaic Projects Require A Minimum Capital Ratio Of 30%.
This undoubtedly raises the threshold for new photovoltaic projects. In essence, it blocks most new photovoltaic projects that do not meet the standards.
Overall, it hopes that the photovoltaic industry will shrink its front line, especially encouraging small photovoltaic companies to develop in clusters and intensively with large photovoltaic companies, so as to improve the concentration of the entire industry.
What New Pattern Will Emerge In The Photovoltaic Industry In The Future?
The author believes that the reason for revising the regulations of the photovoltaic industry is essentially to cope with the upcoming severe situation of foreign trade, especially after the reduction of relevant tax incentives, which has a negative impact on the survival of some companies. This document came out in this context.
The core of the entire document is to benefit the leading photovoltaic companies, because before the new industry regulations came out, the production capacity expansion of the leading companies had been completed, and the leading companies also have advantages in technological innovation and quality improvement. In this case, it will only bring better profits to the leading companies, while for non-head companies, it will be a gradual elimination process. The photovoltaic industry has indeed reached the time of differentiation.