Chinese Solar Companies Want Action

• LONGi Green Energy, JinkoSolar, Trina Solar, JA Solar and Risen Energy have issued a joint statement calling for government's attention
• They want the government to help steer the domestic PV industry from the current raw material supply challenges and power rationing
• They also want raw material manufacturers to ensure good price control
• Customers have been recommended to defer their project completion

If the ongoing global solar PV raw material supply issues were not enough to rattle the industry, the Chinese government's decision to ration power supply in the country has thrown in yet another challenge for the entire supply chain. Leading module suppliers are now calling on the Chinese government for a way out.

Famous as the world's manufacturing hub the is now seeing increasing demand after a quick recovery post Covid, China battles power woes due to a coal shortage in the country on which it remains still highly dependent. China has been seeing coal power plants slowing power production as the country is seeking carbon neutrality by 2060. Power rationing across provinces is now impacting industrial activity including that for solar PV supply chain.

In a joint statement released recently that lists 4 recommended ways to deal with the situation, LONGi Green Energy Technology, JinkoSolar, Trina Solar, JA Solar and Risen Energy have requested the government's intervention in the matter to avoid the year-end installation rush. For this, they request relevant state departments to deploy flexible policies.

These tier-I companies want their customers to consider delaying their project installations for the time being since power curbs in China have majorly impacted manufacturing unit utilization rates—expected to not exceed 70% during current times, not to miss raw material supply shortages already clogging the activity.

The letter urges PV industry associations to monitor upstream and downstream capacity in the supply chain and update so that companies can plan their capacity in advance. It will help balance supply and demand ratio while effectively restraining any 'disorderly' rise in raw material prices as well as 'vicious competition'.

Companies want raw material manufacturers to bear in mind the common goal of healthy development of the PV market with a sustainable development perspective by ensuring good price controls and supply.

The signatories to the letter believe prices of material in the PV industrial chain has been on an increase over the past few months, and are expected to continue to rise in 2021. While price of PV glass in August increased 18.2% YoY, that of adhesive film went up by 35% over the same period. Polysilicon prices have gone up to exceed $260 per kg, according to the companies.

However, the letter comes at a time supply contracts are being re-negotiated due to rising prices and developers delaying PV projects due to module prices reaching levels that are making projects financially unsustainable. There is a big uncertainty in the sector as to what PV module prices will be next year.

PV InfoLink has said it will soon revise down forecast for global demand in the face of supply shortages and project deferral worldwide since power cuts in China have been seen impacting major manufacturers of polysilicon, wafer and EVA since early September 2021. Only in September, Bloomberg NEF was upping its 2021 solar demand outlook to 191 GW.