It’s nothing new to say that China is one of the kings of solar energy; the Asian country is one of the countries with the most installation and use of this type of renewable energy. But as we’re starting to see in other countries like Pakistan, this is great Overexploitation of photovoltaic energy can cause additional problems.
Right now, China is between a rock and a hard place; between continuing to use more and more solar energy or halting production a bit to see what happens. Although the use of solar energy can be very good for the environment, In other areas it could be a bit damaging, for example to other industries in the country, which are seeing losses in their numbers.
What’s happening with solar energy in China?
We know that China is a leader in the world of solar energy, the country has more than conquered 80% of the global solar energy supply. Moreover, it already had an installed capacity of 650 gigawatts in 2023 and most importantly, its enormous production has caused prices to fall around the world.
However, this is exactly what was generated certain cracks in the Chinese economic systembecause so much overproduction has caused price drops and certain problems between different industries.
This is also related to China’s ambition to avoid paying tariffs, as China has expanded southward by not wanting to pay the tariffs of some countries such as the United States. However, this led to a large overproduction and caused Other countries, such as Brazil, will also impose their own taxes on imports from China and other countries.
How does this overexploitation of photovoltaic energy affect industries in China?
What happens with this is that many companies in China started to present themselves financial losses. In addition, experts explained that the country can no longer generate sufficient energy and urgent measures need to be taken.
There came a time when Chinese manufacturers started producing more panels than residents could buy themselves, and then a gap emerged. Another problem that it also brings is the loss of jobs because companies cannot maintain such expenditures.
What measures will the Chinese government take as a result of this overproduction?
It is for this reason that the Chinese government has taken action on this issue. He Ministry of Industry and Information Technology (MIIT) of this Asian country has published a statement explaining the measures that will be taken to stop this overproduction.
These new guidelines explain that companies will now be required to guarantee a coefficient of Minimum equity financing of 30% for solar energy projects. This change is due to the fact that previously this 30% rule only applied to polysilicon production projects, but the minimum for solar photovoltaic projects was 20%, so now it will all be 30%.
This was done to somewhat discourage and also to reduce the mass and excessive production of photovoltaic modules Solar panel manufacturers are also becoming aware of the use of these technologies, Because since they have to use more money from their own pocket and finance fewer parts, they will think twice the next time they want to produce more panels, which means they will have quite a control over the amount of production from now on.