By Frank Andorka, Senior Correspondent
When China suddenly decided to slash its domestic solar industry by cutting off its expansion of new plants and cutting back on subsidies to end-users, some in the industry thought it might be a boon to the U.S. solar industry.
After all, those modules that were in the process of being produced had to go somewhere if they weren’t going to be used domestically, and the U.S. market – especially in light of the 30% tariffs – seemed a logical place for those modules to go.
And indeed, you’ve seen some of that. According to solar installers I’ve talked to, module prices have already dropped to pre-tariffs prices, which means some projects that had been discarded as too expensive are now back under consideration.
Well hold on to your hats because Reuters is reporting that not only did Chinese module manufacturers not slow down production as a result of the domestic cuts, they inexplicably increased production so far in 2018.
To wit:
[China Photovoltaic Industry Association (CPIA) Vice-Chairman Wang Bohua said] the production of silicon wafers – a key solar component – rose 39% year-on-year to 50 GW in the first half, with solar module output rising to 39 GW, up 22%.
Reuters also reported Wang saying this:
Domestic market weakness has driven down prices and stimulated foreign sales, with solar component export earnings rising 21.2% to $5.51 billion in the first six months.
But overall profits and utilization rates in the sector have continued to decline, Wang added, with some manufacturers even making losses in the first half.
“As competition in the sector continues to intensify, and as subsidies are cut, the sector has entered into a period of low profit,” Wang told the conference.
I mean…wow. This is more amazing than any of us here in the United States could ever have imagined. Not only are inexpensive modules from China going to flood this market, there are even more of them than originally expected.
Lower prices could buoy an industry that had expected to struggle as the tariffs kicked in, and that could mean good things for employment, too. In other words, despite having a Trump Administration that seems hellbent on destroying the solar industry, the Chinese might be coming to our rescue with overproduction and inexpensive modules.
How does one say “Hallelujah” in Mandarin?
More:
China solar manufacturers raise first-half output despite capacity cap: association (Reuters(
Chinese Solar Market Suffers Severe Setback As Government Slashes Subsidies, Projects (SolarWakeup)