China imposes new solar industry guidelines

Share

The Chinese Ministry of Industry and Information Technology ( MIIT ) has announced new regulations for domestic photovoltaic manufacturers.

The guidelines for the solar manufacturing industry, published on Tuesday, will prohibit manufacturers from investing solely in the expansion of production capacity. The ministry’s stricter regulations also address production requirements, energy consumption, environmental protection and quality management.

The new policy will now require manufacturers to invest at least 3% of annual revenue, or the equivalent of €1.22 million ($1.65 million) a year, in research and development and technological advancement. In addition, the regulations call for minimum requirements in production capacities for various products, including ingots, solar cells and thin film products. The new guidelines will go into effect within 30 days of publication, i.e., by mid-October.

The solar market is currently struggling with tremendous overcapacity in solar modules, a development that has been exacerbated by the expansion of capacity among Chinese manufacturers in recent years.

In addition to the problem of excess capacity, a massive price war developed in a number of PV markets worldwide, with many manufacturers selling their products at below cost. As a result, most photovoltaic manufacturers have also recorded heavy losses in recent quarters.

Last fall, a lobby group led by Germany’s SolarWorld filed anti-subsidy and anti-dumping complaints with the European Commission against Chinese manufacturers of crystalline solar photovoltaic products. Brussels initially imposed preliminary anti-dumping duties on Chinese imports in early June. Since then, the European Commission and the Chinese government have negotiated a settlement that provides a minimum price for Chinese solar modules of €0.56 per watt as well as an import ceiling. However, the EU Commission will continue its investigation into the matter until the end of the year before presenting its final results.

Translated by Edgar Meza