As Interest in Solar Grows, Strong Fight Anticipated Between Chinese Companies and the Rest Over PV Module Industry

Photovoltaic (PV) modules, the humble solar cells are caught in a tug of war between different countries as cheap and relatively reliable Chinese imports make indigenous production and supply of PV cells very difficult  

COP21 has become the hot topic of discussion in political and business circles; while the discussion may veer sharply on sectarian lines, there is no doubt that a renewed interest in environment sustainability will shine a light on the cleantech business and its pros and cons. Perhaps the most important among cleantech sectors today is solar; as per World Energy Outlook 2016, over 37% of power generation will come from renewables in 2040 (compared with 23% today) and solar will form the backbone of said renewables. The India led International Solar Alliance (ISA) is being seen as a bridge, especially for solar rich but economically backward regions such as Sub Saharan Africa etc. A lot of formerly energy dependent countries can hope to become energy independent, and of course, with tariffs of renewables steadily going down, it stands to reason that at one point renewables will render coal uncompetitive in case of a price war.

However, when talking about cleantech, almost all enterprise refers to the broad macroeconomic contours of building a sustainable environmental future with multilateral consensus etc. but everybody forgets the lowest common denominator: the humble PV cell. As per a recent report on the reliability of PV modules, ten companies stuck out. Jinko, Trina, Canadian Solar, Hanwha Q Cells, JA Solar, GCL, First Solar, Yingli, Talesun and Risen were the top PV module suppliers globally. Out of these, Jinko, Trina, JA Solar, GCL-Poly, Yingli, Talesun (who merged to form Suzhou Talesun) and Risen are all Chinese; seven out of the top ten. China is the top producer and consumer for photovoltaics around the world, with over 400 companies engaged in the solar sector. One of the major reasons for the rise of these companies has been the generous funding provided by the Chinese government to their indigenous solar industry market players.

This comes at a time when the solar industry is experiencing heightened demand over a renewed interest. Chinese stranglehold over the solar industry is intense, with cheap and relatively reliable products, they offer value for money which more expensive but longer lasting European and North American products simply cannot match, as per TechSci Research report “India Solar Power Products Market By Product Type, Competition Forecast & Opportunities, 2012 - 2022”. In addition to curtailing indigenous production of PV modules in developing countries, the Chinese disruption is also proving to be a major problem for Western innovation; a lot of new tech startups in the West are failing because the huge market share that Chinese firms have already captured. It will be interesting to see how emerging markets and developing countries will see this semi-recent Chinese ‘invasion’ of the solar industry and what it bodes for the future of cleantech and renewables. 

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