China to tighten control over PV manufacturing capacity

Sep 17, 2013 - The Chinese government is introducing restrictions to photovoltaic (PV) manufacturing capacity additions as part of a set of measures aimed at strengthening the domestic solar power industry.

On Monday the Ministry of Industry and Information Technology published a document containing new norms for the PV industry. From now on it forbids PV manufacturing projects that are not related to technology breakthroughs and innovations, but are solely aimed at expanded capacity. It also requires for manufacturers to spend at least 3% of their revenue on research and development and equipment upgrades.

Other points in China’s plan to stabilise the domestic PV sector refer to stricter control over the environmental footprint of the industry. The government also urges domestic manufacturers to tighten quality control.

In the past years China’s solar PV product manufacturing capacity surged significantly, which contributed to a severe supply-demand imbalance globally. For around two years companies from around the globe fought to keep under control rising inventory levels and to survive amid the rising pricing competition. In the past few months the situation on the solar power equipment market is starting to stabilise and the fact that China is making steps to limit capacity additions is a good sign.

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