China's Solar Industry Will Lose 2.5 Million Job Opportunities Due to Trade War and 531 New Policy

published: 2018-08-02 11:06 | editor: | category: News

Whether it's US tariffs or China's 531 new policy, these policies have greatly affected the status of China's solar industry, and experts predict that this new wave of developments will cause China to lose RMB 1 trillion and 2.5 million job opportunities.

In recent years, China has made vigorous efforts to develop solar photovoltaic systems, with the output of its solar panels increasing by about 40 percent to 75GW in 2017. This has enabled China's solar photovoltaic products to occupy 70 percent of the global market. In the same year, China's domestic installed capacity exceeded 100GW and reached 130GW.

Despite its generally favorable momentum, China's installed capacity in 2018 is expected to experience its first decline.

After the US imposed a 30 percent tax on solar photovoltaic products under the Section 201 trade case on China on January 22 this year, the Chinese government announced its 531 new policy in early June to reform the market. The 531 policy is aimed at reducing the country's solar subsidies and restricting the construction of power factories, which were continuous disasters for China's solar manufacturers.

In the city of Changzhou, Jiangsu, which is known to be China's major city of solar power, the local factory operations, wages and job opportunities are also being affected. Employees of the solar module supplier Trina Solar have pointed out that the company's panel factory in Changzhou has closed. The utilization rate of manufacturers of si-wafers for PV cells also plunged, and the wages of June were lowered to RMB 2,000, a decrease of almost 50% compared with the same period last year.

In response to its staff's comments, Trina Solar has pointed out that the shutdown is the result of a merger with another factory in Changzhou, and that about 100 employees will also move to the same city's silicon factory.

Trina Solar is not the only company affected in 2018. Recently, 800 former employees of GCL, a polysilicon solar manufacturer, protested against the layoffs which took place in early July. GCL's overall shipments are expected to exceed 2GW in the first half of 2018, with the foreign markets accounting for more than half of the total. The focus of 2H18 is expected to be the overseas markets. The company stated that some factories have been shut down and that a number of orders have been cancelled temporarily after the 531 new policy.

China's Photovoltaic Industry Association also pointed out that the January-May price of solar components continued to decline. After the 531 new policy, the price of components has even dropped to below RMB 2 per watt. Many small component companies suffered the loss and large companies accelerated the development in overseas markets.

Faced with this cold wave of PV development, Wang Sichang, a researcher at China's National Development and Reform Commission, estimates that China will lose RMB 1 trillion and 2.5 million job opportunities.

The 531 new policy will cause a decline of more than 30 percent in new installed capacity in China in 2018, with Chinese analysts predicting that China's installed capacity could fall from 53GW in 2017 to 35GW in 2018. EnergyTrend predicts that the installed amount in 2018 will be around 29-35GW. In 2018, global installed capacity will struggle to exceed 100GW.

The Section 201 trade case also made Chinese solar modules and batteries uncompetitive in the US. In order to reduce the impact of US tariffs on Chinese manufacturers, the government set up the International Investment Alliance for Renewable Energy by the end of June to open up other solar business opportunities and find and nurture new markets that replace the US.

China's solar energy development is very rapid. By 2017, the accumulated installation capacity in the country had already exceeded its 2020 target of 110GW. Although the US tariffs and China's new solar energy policy will greatly affect the Chinese solar market, this can make China more determined to open up new markets and rectify the domestic industry. In the future, there is still a chance for China's solar energy industry to return to the same state as 2017.

(Picture Credit:Kate Ausburn via Flickr CC BY 2.0. Article by Daisy Chuang)

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