Taiwanese Firms Coping With Abrupt Change in China's PV Power Policy

published: 2018-06-15 11:55 | editor: | category: News

Taiwanese PV firms have responded quickly to new 531 PV power policy unveiled by the Chinese government, which will impact the global PV power industry, as China is the world's largest PV power market, accounting for half of the net installation capacity of PV power facilities in 2017.

Released by the National Development and Reform Commission, the Ministry of Finance, and the National Energy Administration jointly on June 1, the new policy calls for cut on subsidies and FIT (feed-in tariff) immediately, without any grace period, in order to cope with the widening shortfall for subsidy. In response, many suppliers have begun to cut output and dump products and related stock prices in Taiwan dropped. Some Taiwanese firms have slashed output by over 30%, according to the Chinese-language Economic Daily News.

Green Energy Technology reported that in order to stem loss, it has decided to cut the production amount of crystal growth and wafer, allocating shipment after screening orders and focusing on supply to long-term strategic customers.

Chen Chi-min, chairman of Giga Solar Materials, a PV-cell conductive paste supplier, admitted that impact of the new policy is inevitable, as the Chinese market accounts for 75% of the company's sales, saying that the company has yet to come up with plan for output reduction, as the market situation is still very fluid.

Neo Solar Power, a PV-cell supplier, pointed out that given limited share of the Chinese market in the company's sales, the new policy will have limited effect on the company, adding that it will still step up effort developing new customers in other areas, in order to diversify risk.

In order to alleviate the impact of the new policy, quite a few Taiwanese suppliers plan to diversify their operation, such as Sino-American Silicon Products Inc. which acquired 30.93% stake in Taiwan Special Chemicals Corp. at NT$990 million the other day, as part of the effort to alleviate impact of the fluctuation of the PV power market on its business, while screening orders for PV cells and wafers and shifting focus to deployment in PV power stations.

Meanwhile, reeling from the impact of the policy, 11 veterans of the Chinese PV power industry urged the Chinese government on June 3 giving grace period for approved projects, lowering the scale of cut, carrying out medium- and long-term planning, and discussing with the industry before the execution of the policy.

During a meeting with industry representatives on June 6, officials in charge pointed to serious idled PV power capacities in some areas, adding that the new policy is designed to enhance the quality and efficiency of the Chinese PV power industry and assure sustainable development of the industry, as increasingly heavy pressure from PV power subsidies runs counter to the healthy development of the industry.

(Written by Daisy Chuang; Image credit: Schwarzerkater via Flickr CC BY 2.0)

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