IEEE Power & Energy Magazine - May/June 2020 - 56

Strengths-Weaknesses-Opportunities-
Threats Analysis of China's PV Industry
The PV industry is strategic to China's new energy development. To understand the internal and external environments
the sector faces, the government conducted a strengths-
weaknesses-opportunities-threats (SWOT) analysis to formulate development strategies, plans, and countermeasures.
The SWOT analysis appears in Figure 5.

Strengths
High Insolation Levels

China has abundant solar energy resources, with annual solar
radiation exceeding 5, 000 MJ/m 2 and more than two-thirds of
the country receiving better than 2,000 h of solar radiation each
year. China encompasses 1.08 million km 2 of deserts, primarily
distributed in the northwest region, with high insolation levels.
In 2017, it was estimated that the total radiation that a PV module could receive at the optimal tilt angle was 1,725.3 kWh/m 2.
Low Cost

PV enterprises are growing to form industrial conglomerates,
thereby achieving economies of scale. As their shipments
increase and upstream, midstream, and downstream costs
decline, they benefit considerably.
Policy Support

Governments at all levels in China have provided subsidies
and made concessions to PV power-generation projects. They
have introduced encouragement and support policies in different periods that provided higher subsidies than other countries,
including all aspects of the financing, construction, production, and sale of PV projects. As the national supply-side structural reform and electric-power-system overhaul continue, the
functions of power-grid enterprises are changing, with gradu-

ally increasing support for constructing distributed PV systems
and the local consumption of PV power.

Weaknesses
Overcapacity

With supportive policies, the domestic PV power-generation
market is growing rapidly. Stimulating downstream factors
have spurred PV manufacturing enterprises to expand their
production capacity to rank first in the world. However, with the
decline of PV subsidies, the construction of power-generation
projects has decelerated. Given insufficient domestic demand
and low export sales, the problem of manufacturing overcapacity is becoming increasingly prominent.
Difficulties in Consumption

With the rapid increase in PV power generation, some areas
have experienced serious problems of reaching hosting-capacity limits. The national PV generation rejection rate was 11%
in 2016 and 6% in 2017, and it eased to 3% in 2018 through
various efforts. However, the PV generation rejection rates are
still relatively high in some places, with Gansu and Xinjiang
Provinces reporting 2018 figures as high as 10.06 and 15.84%,
respectively. The main causes are as follows:
1)	 Solar energy resources are unevenly distributed, located primarily in the "Three Norths" region, which
has a relatively backward economy and limited ability
to locally consume PV power.
2)	 The PV power station development speed far exceeds
the construction times for grid-network improvements.
3)	 The electricity market is an imperfect trading
mechanism.
Weak Industry Structure and Technology

China's PV industry structure is relatively simple, and the
quality of its high-efficiency solar
cells and other products needs to
be improved.
1 Widening of PV Subsidy Gap

1 Abundant Light Resources
2 Low Cost
3 Policy Support

1 Overcapacity
2 Difficulties in Consumption
Weak Industrial
3
Structure and Technology

2 Significant Capital Volatility
and Financing Difficulty
3 Trade Risk
4 Missing DistributedPower Retail Market

1 Good Macro Environment
2 Promotion of ElectricPower-System Reform
3 Broad Global Market

figure 5. The SWOT analysis of China's PV industry.
56	

ieee power & energy magazine	

Opportunities
Good Macro Environment

The government promotes electric-energy production and consumption; strengthens the construction of renewable energy
resources; proposes that nonfossil energy sources supply 15% of
the primary power consumption
by 2020; participates in the Paris
Agreement to limit carbon dioxide emissions; and accelerates
the establishment of a clean, lowcarbon, safe, and efficient modern
energy system. Corresponding
may/june 2020



IEEE Power & Energy Magazine - May/June 2020

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