China installed just a little more than 43 gigawatts (GW) of solar power generation capacity in 2018, 18 percent less than that recorded a year ago, according to a group in the solar sector, after government released measures to restrict new capacity and tackle a subsidy payment backlog.
With the capacity newly added, China’s installed photovoltaic generation capacity amounted to more than 170 GW by the end of last year, data from the China Photovoltaic Industry Association (CPIA) showed.
The government said last year that it would call a halt to constructing new photovoltaic projects after the solar capacity installation hit a record 53 GW in 2017, leaving it with a renewable subsidy backlog of at least 120 billion yuan ($18 billion) and struggling to find spare grid capacity last year.
China is also aiming to gradually call off direct financial support to the photovoltaic industry after a fast decline in construction costs. The National Development and Reform Commission (NDRC), the country’s top economic planner, on January 9 said that China would launch a series of new subsidy-free projects, adding that solar construction costs in China had fallen 45 percent from 2012 to 2017.
But solar manufacturers are already feeling the pressure and sounded a warning last year they were facing closure after new production capacity built up too much in previous years and resulting in sliding component prices.
“Facing a lot of complicated domestic and overseas trends, the sector as a whole is under big pressures and substandard producers are expected to promptly exit the market,” said Wang Bohua, vice-chairman with CPIA.
Wang said solar equipment output continued to rise in 2018, with solar module production jumping 14.3 percent to an equivalent of 85.7 GW.
The excessive production was mostly shifted to overseas markets, with revenues from solar component export increasing 10.9 percent from last year to $16.11 billion, Wang added.
Chinese solar manufacturers have long been accused of using government subsidies to depress prices and squeeze foreign competitors out of the market.
The United States levied duties on China’s solar product imports last year, with its share of China’s exports seeing a sharp decline from 5.9 percent in 2017 to 0.24 percent in 2018. China had most of its overseas shipments go to India, Europe and South East Asia last year.