Tenth of Chinese solar production capacity located overseas by end of 2015

Share

Around one tenth of all production capacity of Chinese solar manufacturers will be located in overseas facilities by the end of this year, according to data compiled by Bloomberg New Energy Finance (BNEF).

As leading producers from China seek ways to dodge and circumnavigate stinging trade duties applied by the U.S. and the European Union (EU) in the wake of anti-dumping (AD) and countervailing investigations, BNEF forecasts that some 5.3 GW of solar cell capacity will exist beyond Chinese shores at the close of 2015.

Many of the largest Chinese solar companies have already added production capacity in neighboring Southeast Asian countries such as Thailand, Malaysia and Singapore, pouring billions of dollars into these new ventures to be able to continue supplying the lucrative U.S. and European markets.

In May, leading Chinese solar company Trina Solar confirmed that it is to build a 700 MW cell and 500 MW module production facility in Thailand, while JinkoSolar’s Malaysian factory will end 2015 with a cell and module production capacity of 950 MW.

"Products from our Malaysian plant will be mainly exported to the U.S., but we’re eyeing global demand," Sebastian Liu, JinkoSolar’s director of investor relations, told Bloomberg. "This isn’t temporary. JinkoSolar wants global manufacturing to avoid the risks posed by a single production line."

China’s dominance of the solar panel production landscape – the country has capacity of 65 GW and makes seven out of ten solar panels globally each year – has long caused concern in the markets of Europe, the U.S. and Japan. Many Chinese companies are state-backed and have been accused of deliberately undercutting their rivals on price and causing a global glut of modules.

Recent and ongoing trade disputes have resulted in the imposition of severe tax duties on solar products entering the EU and U.S. from China, and the European Commission (EC) in May confirmed it is to initiate a widening of the investigation to cover solar products exported to the EU by Chinese suppliers via Malaysia and Taiwan. The U.S. is also working on a draft to amend its trade duties to include any solar product assembled in China, regardless of where the original components were produced.

However, the threat of a wider investigation does not appear to have deterred most leading Chinese solar companies. According to BNEF, more than 50% of future solar panel production capacity will be added in Southeast Asian nations, which prove both economically and logistically attractive to Chinese companies.

Elsewhere in the region, notably India, growing local demand is also proving attractive to Chinese solar companies. Trina Solar will spend $500 million investing in a solar production plant in the country in collaboration with local company Welspun Energy. The plan is to tap into a market set to boom following Prime Minister Narendra Modi’s 100 GW of solar by 2022 goal.

According to IHS’s Ash Sharma, this trend is likely to continue for a good while yet. "Manufacturing outside China can be more cost effective," the analyst told Bloomberg.

Writing for pv magazine, Solarpraxis CEO Karl-Heinz Remmers queried recently just how robust Chinese domestic manufacturing can remain, musing: "It seems clear that many of the ‘early mover’ Chinese companies don’t have a lot of state-of-the-art manufacturing cell and module equipment… everybody has to update, update, update to stay alive. But with debts that have gone crazy, it’s not possible to fund these operations – which we have seen with LDK and Suntech in China."

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Popular content

Saudi Arabia launches tender for 8 GWh of battery storage in world’s largest deal

05 November 2024 World’s largest storage procurement process is underway in Saudi Arabia for 2 GW/ 8 GWh of storage.

Share

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.