The Central Military forces seize home at the time of the recovery of the photovoltaic industry
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This month, the European Commission officially approved the price-compensation agreement for the China-EU photovoltaic trade dispute, bringing relief to the Chinese solar industry. For the first time in years, companies were able to escape the 47.6% anti-dumping tax, and the market began to show signs of returning to China. The introduction of the eight new photovoltaic powerhouses signaled a more stable policy environment, while the domestic installation target of 35 GW intensified competition among PV players. Since July, many regions across China have seen a long-awaited surge in PV demand, hinting at a potential resurgence of the industry.
However, this revival comes with challenges. While the World Bank's support has helped ease some pressures, the traditional solar giants who once dominated the global market are now struggling. The current main players in the PV sector are no longer the old veterans but rather state-backed enterprises—central armies with strong financial backing. These veteran companies, already weakened by past downturns, find themselves sidelined, facing a difficult situation where they can only watch from the sidelines.
The State Energy Administration has issued a directive to address the energy needs of 2.73 million people without access to electricity by 2015, with 1.19 million relying on solar power. Over three years, 583 projects will be launched, involving a total investment of 29.4 billion yuan. With such a massive market opportunity, it's no surprise that every PV company is eager to get a piece of the pie. However, at the end of July, the director of the Energy Administration revealed that these projects would be managed by eight major central enterprises, including Huaneng, Datang, Guodian, and others. This news came as a shock, like a cold bucket of water, dousing the enthusiasm of smaller, independent solar firms.
If the central power companies securing these large-scale projects is a short-term move to grab market share, then the recent actions of former central enterprises outside the state framework are even more intense. Some of them have started to "pick peaches" from the growing solar market, leaving little room for struggling PV companies. At the end of July, China National Machinery Industry Group announced a 20 billion yuan investment to build a 2,500 MW desert eco-PV project in Ningxia. Their bold moves and generous investments have left only a few solar companies standing, barely surviving the tough times.
The biggest shock still lies ahead. Distributed PV, once considered the future of the industry, is now being dominated by state-backed entities. The AVIC Group, best known for building aircraft, is developing a 400 MW PV project that will be constructed across 20 cities in 11 provinces over the next three years. Even with conservative estimates, the annual power generation could reach 440 million kWh, with a total investment of 3.8 billion yuan expected to be recouped in 11 years.
Since the Chinese PV industry faced a full-blown crisis, talk of restructuring and mergers has been frequent. However, apart from Wuxi Suntech’s bankruptcy, most manufacturers have suffered significant losses but the overall industry structure hasn’t changed much. Now, as the Sino-European dispute escalates and domestic demand grows, companies are eager to re-enter the market—but find that the state-backed forces have already taken control. What remains for the rest? Perhaps just the remnants of the past. So how did this happen? The answer lies in the shifting dynamics of power, capital, and policy in the evolving solar landscape.