Currently, China is the leader of the photovoltaic industry and constantly surprises with his innovations such as the solar panel in the room. This time, however, the country would have a controversial strategy to achieve its objectives, but what is it?
A prize war in the photovoltaic industry
The solar panel industry is confronted with a price war that could significantly influence the market. The situation is so complex that the most important signatures in the industry have held meetings to form a cartel inspired by the model of The organization of oil -exporting countries (OPEC).
The initiative would be led by China and the goal is Regulate the production and trade of solar panels worldwide. To do this, the idea is to set an optimal price that can guarantee competing prices for the sector, as well as the survival of a large part of the companies.
An agreement for the public interest
During the annual meeting at the beginning of December against the China’s Photovoltaic Industrial Association (CPPO)33 Important manufacturers of photovoltaic panels promised to establish a common price discipline.
To do this, the producers came in to produce production based on their capacity, with the strict monitoring of a minimum price that was previously set by the CPPO, located at 0.68 yuan ($ 0.09) per watt.
The start of problems
Everything seemed to go well until the next 2 weeks, when a subsidiary of China Energy Investment Group made a maximum bid for a project in Xinjiang that was lower than the minimum price determined by the CPPO. “Are you trying to put or increase the fierce competition in the industry?” The association Sarcastic asked in a later statement.
On the other hand, the news generates concern in other countries. The European Union and the United States have already expressed that they oppose this initiative Because they consider that it could hinder the transition to clean energy.
The price war will continue
It is assumed that if the price war continues, this could force companies to lower the quality of their products to sell them cheaper, which is a common measure in all types of markets.
Although, it should be noted that in the case of China, despite the controversial situation, The price of solar panels remains almost 50% cheaper than those of its European rivalsWhich implies that the sector has a large margin to maintain its domain and a quality spice balance.
China takes action about this
Similarly, China is already applied to some measures to reduce the surplus production of the sector, for example, it reduces the consumption of electricity for polysil producers, the material used for the manufacture of solar panels. This measure will reduce production capacity between 20 and 30%, according to Ken LioUBS analyst.
On the other hand, Jesica JinGlobal S&P Analyst, indicates that there are so many photovoltaic plates in Chinese territory that it is very difficult to make effective supervision for government measures.
This indicates that, despite the fact that he takes the lead in the photovoltaic industry, China still has many challenges to tackle, especially if you want to continue with these types of initiatives that have undoubtedly caused a certain degree of fear, both at the room As at global level.
An uncertain future for the photovoltaic industry
Creating a system inspired by the OPEC could have a significant impact on the photovoltaic market, which means that the current availability and prices of solar panels, especially if it is not possible to reach similarities.
On the other hand, these types of initiatives emphasize the need to prepare a sustainable energy policy that helps Promotion of renewable energy sources, Especially solar energy, one of the easiest to acquire.
In conclusion, although the initiative could have a positive impact for China, there are still many challenges to take in. China previously placed panels in the water, so we could say that it is one of the most innovative countries in solar energy that keeps this in mind, it is expected that this situation is expected to be tackled in an innovative and dedicated way to The energy transition.