The Central Military forces seize home at the time of the recovery of the photovoltaic industry
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Earlier this month, the European Commission officially approved the price-compensation agreement addressing the China-EU photovoltaic trade dispute. This decision brought relief to the Chinese solar industry, which had long been burdened by a 47.6% anti-dumping tax. Now, with the tax lifted, the market is beginning to shift back toward China. The introduction of eight new photovoltaic powerhouses has signaled a stronger policy commitment, and the domestic installation target of 35 GW has sparked intense competition among solar companies. Since July, many regions in China have experienced a renewed surge in PV demand, suggesting that the industry may be on the verge of another golden era.
However, the situation isn’t as straightforward as it seems. While the World Bank’s involvement has helped ease some tensions, the real battle is now being fought between the established giants and the emerging players. The core forces currently dominating the solar market are the central state-owned enterprises and national teams, leaving the older, more traditional solar companies struggling to keep up. These veterans, once dominant, are now facing a tough reality—unable to compete effectively and left out of the action.
The rapid expansion of domestic demand for solar energy has created a massive opportunity, estimated at nearly 30 billion yuan in potential projects. But this feast is not open to all. The State Energy Administration has announced plans to completely solve the electricity issue for 2.73 million people by the end of 2015, with 1.19 million relying on solar power. Over the next three years, a total of 583 projects will be launched, with 29.4 billion yuan already allocated. However, the construction and operation of these projects will be managed by eight major central enterprises, including Huaneng, Datang, and Three Gorges Group. This revelation came as a shock to many independent solar firms, who now find themselves sidelined.
While the central enterprises are securing the lion's share of government-backed projects, some former industry players outside the central framework are still trying to grab a piece of the pie. For example, China National Machinery Industry Group recently invested 2 billion yuan to build a 2,500 MW desert eco-solar project in Ningxia, showcasing strong financial backing and aggressive strategies. Meanwhile, even the aviation giant AVIC has entered the solar sector, planning a 400 MW distributed project across 20 cities in 11 provinces. If fully operational, this project could generate 440 million kWh annually, with a projected payback period of 11 years.
Since the Chinese solar industry hit a crisis, terms like “industry restructuring†and “mergers and acquisitions†have been frequently discussed. However, aside from the bankruptcy of Wuxi Suntech, most manufacturers have suffered significant losses but the overall structure of the industry hasn’t changed much. Now, as the Sino-European dispute appears to be resolved and domestic demand picks up, many companies are eager to re-enter the market. Yet, they’re finding that the key projects have already been taken by well-connected central enterprises. What remains for them might only be the leftovers of a highly competitive industry.
So, how did this happen? It seems that the combination of policy support, strong state involvement, and strategic investments by large enterprises has reshaped the landscape, leaving smaller or less-connected players struggling to survive. The solar industry is no longer just about technology or cost—it’s now a game of influence, access, and political connections.