China: Move to shore up manufacturers through new regulations


China's Ministry of Industry and Information Technology (MIIT) has released a draft version of its PV Manufacturing Industry Standards policy document. The proposed regulations include a number of measures aimed at strengthening the industry’s long-term footing. The previous iteration of the guidelines was published in 2013.

One of the key developments is that module manufacturers will be required to have a minimum equity capital ratio of 20% for any PV manufacturing expansions. There was no capital ratio previously in place.

Increasing the resource efficiency of China’s PV sector is another aim of the proposed regulations. In polysiliocn production, the MIIT will require both new and existing manufacturers to decrease energy usage in production to 65 kWh/kg and 120 kWh/kg from previously required efficiencies of 80 kwh/kg and 140 kWh/kg.

The window for input into the new regulations closed on Thursday and the official version is be finalized and published shortly.

In a further sign that the Chinese government is aiming for fewer, larger manufacturers in the PV sector, MIIT has been taking measures to encourage mergers and acquisitions (M&A) amongst PV manufacturers. Earlier this month MIIT set a 2017 goal to have the top five polysilicon manufacturers accounting for 80% of total output. The desire for consolidation from MIIT also extends to battery production, with the goal of the top 10 battery assembly enterprises occupying 70% of total production by the same year having also been announced.

The MIIT policy document states that such concentration of the market will assist China’s PV manufacturers to remain competitive. There has already been some skepticism regarding the M&A goals, with some industry observers saying that the process will be much slower than government expectations due to the high proportion of private companies active in the cleantech space.

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