IEEE Power & Energy Magazine - May/June 2020 - 50

Polycrystalline
Silicon Wafers
Polycrystalline
Silicon Ingots

Polycrystalline
Solar Cells

Solar Cell
Modules
Monocrystalline
Silicon Wafers

Silicon
Furnace

China's PV Industry
figure 1. The PV industry chain.

Monocrystalline
Solar Cells
Metallurgical-Grade Solar-Grade
Monocrystalline
Polycrystalline
Silicon
Silicon Material

ieee power & energy magazine

Monocrystalline
Silicon Rods

PV Cells
Silicon Rods/Silicon
Ingots/Silicon Wafers
Crystalline Silicon
Feedstock

PV Application
Products

PV Power-Generation
System

PV System-Application
Products
PV Modules

Downstream
Midstream
Upstream
50

issued the 531 New Policy in May 2018 to reduce the
intensity of subsidies and limit the scale of new production. Implementing the policy led to higher prices and a
sharp drop in domestic demand for new PV installations.
During the first three quarters of 2018, 34.5 GW of PV
power were added, down 19.7% from a similar period in
2017. Driven by lower local demand, silicon wafer production decreased by 48.9% during the third quarter, and
the output of batteries and associated components fell by
more than 20%. Downstream enterprises were directly
affected by the policy change and sluggish demand, and
their profit margins shrank sharply through the second
half of 2018.
To ensure the sustainable development of PV panel
production, the State Energy Administration established
reduced subsidies in June 2018, extending them until
2022 while also postponing a planned feed-in tariff
on non-PV distributed resources. The government also
sought to stabilize market expectations by increasing the
goals for installed PV nameplate capacity from the original 13th Five-Year Plan, which covered 2016-2020.
The short-term fluctuation in the PV industry's development occurred in response to the initial rapid expansion of production capacity, the 531 New Policy, and the
new subsidies. Since 2018, prices across the PV industry
supply chain have declined, impacting the profitability of
enterprises, and the prices of silicon and silicon wafers
continue to fall sharply, plunging 39% between May and
November 2018 and hurting the performance of upstream
PV enterprises. Due to the lower raw material costs and
prices, some manufacturers of batteries and associated
components have maintained adequate margins.
This article discusses the history of China's PV
industry and the drivers of each development stage,
from manufacturing through installation, and summarizes the country's PV electricity policies. The internal
and external environments affecting the PV industry are
discussed as well as opportunities for and threats to the
sector's development. Future trends and prospects for
national policies, technologies, industries, and markets
are described in relation to electricity rates.

Development Status
The PV industry collects and processes silicon materials
to build solar electricity cells, modules, and generation
systems. The upstream PV industry gathers crystalline
silicon feedstock that is manufactured into silicon rods,
ingots, and wafers. Midstream companies manufacture
PV cells, cell modules, and related solar production
equipment, and downstream firms integrate and operate
the PV power station system, as shown in Figure 1. The
industry's specific situation and development status are
now discussed.
may/june 2020

IEEE Power & Energy Magazine - May/June 2020

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