Photovoltaic industry overcapacity is just an appearance

The photovoltaic industry has been hit hard by a cold winter, but amid the challenges, it's also prompting deeper reflection. Many experts agree that the key issue lies in the lack of core technology. In response to the ongoing transformation and development of the sector, on December 20, China Power News reporter conducted an interview with Li Meicheng, vice president of the School of Renewable Energy at North China Electric Power University. "Overcapacity is just an appearance," Li emphasized. He pointed out that in the global ranking of photovoltaic components, six Chinese companies were among the top ten in 2010, and eight in 2011. "These rankings are the most convincing proof of our strength in the global market," he said. According to Li, the real reason behind the current difficulties is not overproduction, but rather external factors. The global economy is in a slow phase, which has led to a decline in demand. Additionally, trade protectionism has significantly impacted exports, as most of China’s solar products are sold abroad. "When the export market is blocked, the result is a perceived overcapacity," Li explained. However, he noted that there are still many technology-driven companies performing well globally. For example, Japan’s Sanyo, with its HIT battery technology, remains a leader due to its proprietary intellectual property. "Only one company in the world can produce such a product, and no one else can compete," he said. In contrast, the crystalline silicon products produced by Chinese manufacturers are largely similar and lack differentiation. "Blocking one road blocks all," he added, highlighting the need for stronger investment in research and development. When asked about the way forward for current photovoltaic companies, Li suggested focusing on two main strategies. First, promoting distributed applications under strong policy support. Second, integrating photovoltaic technology with traditional industries to create new value chains. "The winter of the photovoltaic industry is actually the spring for technological innovation," Li told the reporter. During this period of slow business activity, many technical staff have moved to R&D institutions, including universities. He encouraged companies to take advantage of this time to retain talent and invest in long-term research. "In 2008 and 2009, everyone was focused on making money. Now it's time to upgrade our technology." Moreover, Li stressed the importance of a complete industrial chain in ensuring sustainable growth. "In the past, we had over-investment, but it wasn’t necessarily overcapacity. Many technological upgrades weren’t properly absorbed, and some industries couldn’t keep up, leading to disconnected supply chains." He believes that now is the time for companies to focus on improving the industrial chain, which can significantly reduce operational risks and enhance resilience in the long run.

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