The spring for photovoltaic companies appears to be finally here. In 2011, the domestic PV industry entered a prolonged downturn. This was driven by several factors, including changes in European solar subsidies, the deepening European debt crisis, and "double reverse" trade restrictions imposed by Europe and the U.S. As a result, the sector, which had heavily relied on international markets, faced a severe adjustment. Many companies halted production, laid off workers, and cut wages. Notably, Wuxi Suntech, once the world’s largest PV module manufacturer, filed for bankruptcy and reorganization.
However, recent developments have brought a dramatic shift. A series of supportive policies have been introduced, hailed by the industry as unprecedented, and they have significantly boosted confidence among domestic PV companies during this challenging period. In the capital market, besides Suntech Power, most Chinese solar stocks have seen sharp gains this year. For example, Artes rose over 300%, while Hanwha Xinneng, Jinko Energy, Daxin Energy, and Trina Solar all saw more than 200% increases. Industry experts believe that with the continued refinement of these policies, the long-awaited domestic PV market is beginning to take off, driving upstream manufacturers into renewed growth.
The market revival has been fueled by multiple policy initiatives. Recently, Li Jingbin, from Yingli Group’s Southwest branch, invested in a 2.12 kW distributed photovoltaic project on the roof of a village in Baoding City. He explained that eight 265W monocrystalline modules generate an average of 2,420 kWh annually, saving about one ton of standard coal and 2.5 tons of CO₂. The investment can be recouped within approximately eight years, making it a highly attractive option.
This success stems from a series of government measures. In August, the State Council issued "Several Opinions on Promoting the Healthy Development of the Photovoltaic Industry," setting targets for annual installed capacity between 2013 and 2015. By 2015, the total capacity was expected to exceed 35 GW, with grid-connected tariffs and subsidies valid for up to 20 years. Subsequently, the National Development and Reform Commission released the "Interim Measures for Distributed Power Generation Management," outlining clear procedures for project development, grid access, and operation.
In late August, the same commission issued a notice on using price mechanisms to promote healthy industry growth, dividing the country into three solar resource zones with different on-grid tariffs. Distributed projects received a subsidy of 0.42 yuan per kWh, with the same 20-year validity period. In September, the National Energy Administration and the National Development Bank issued guidelines supporting distributed PV projects, offering financial services and allowing loan periods of up to 15 years.
Meanwhile, the Ministry of Industry and Information Technology introduced regulations to set entry barriers for PV manufacturing, focusing on quality and sustainability rather than just production scale. Industry insiders suggest that after a period of stagnation, the government is now shifting focus from upstream manufacturing to downstream applications, aiming to build a stronger domestic market.
Many companies are already preparing for this shift. Yingli Group established a distributed power investment company and secured a 60 MW demonstration zone. Other manufacturers like Trina Solar and Artex are expanding into downstream projects such as power station development and design. Some provinces, like Jiangxi, have also launched local plans to boost PV installations, aiming for 200 MW annually and reaching 1,000 MW by 2017.
Looking ahead, the domestic PV market holds vast potential. While large-scale power stations still play a role, distributed generation is gaining momentum. Experts believe that, with the right incentives, distributed systems could become the dominant form, similar to how solar water heaters became widespread in cities. In rural areas and urban outskirts, where many households and institutions lack reliable energy access, PV systems offer a practical solution.
Miao Liansheng, chairman of Yingli Group, envisions a future where PV equipment becomes widely available, even in supermarkets, allowing families to choose systems based on their homes. The decentralized nature of distributed PV also creates opportunities for smaller enterprises to enter the market.
Despite the positive outlook, challenges remain. Technological innovation needs improvement, and the subsidy system must be refined. Public awareness of renewable energy should also be increased to ensure broader adoption. Financial support, tax incentives, and innovative credit policies will be essential for sustaining growth.
Overall, China is rapidly becoming a major player in the global PV market. With strong policy backing and growing domestic demand, the industry is well-positioned for sustained expansion in the coming years.
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