China Calls for End to Solar Price Wars

• China's solar industry urges manufacturers to halt below-cost selling, promoting market stability and sustainable growth amid oversupply challenges.

China's top solar industry association has urged manufacturers to cease below-cost selling and align production with actual demand to stabilize the market. The China Photovoltaic Industry Association's guidance emphasizes the "survival of the fittest" without demanding immediate capacity closures. This comes amid consultations with enterprises and government agencies addressing oversupply issues in polysilicon, wafers, cells, and modules. The association calls for adherence to China's price law and cautions against "blind" expansion, which has exacerbated the glut.

For developers, a stabilized market could mean steadier pricing and improved project bankability, though costs might rise. The association encourages buyers to consider factors beyond price, such as reliability and warranty strength. The success of these measures depends on provincial politics and financing, as local governments and lenders have historically supported capacity expansions. Globally, buyers should monitor order books and lead times, as any production pullback could quickly impact the supply chain. The association's stance is clear: competition should not come at the expense of market stability.

How Will China's Solar Industry Address Oversupply and Stabilize the Market?

• Encourage strategic partnerships and mergers among solar companies to consolidate resources and reduce redundant production.
  
• Promote technological innovation to improve efficiency and reduce costs, making products more competitive without resorting to below-cost selling.
  
• Implement stricter regulations and oversight to ensure compliance with production and pricing guidelines.
  
• Develop export strategies to tap into emerging markets and reduce domestic oversupply.
  
• Foster collaboration between industry players and government to align production with national energy goals and market demand.
  
• Enhance transparency in the supply chain to better match production with real-time demand data.
  
• Support research and development initiatives to diversify product offerings and open new market segments.
  
• Encourage long-term contracts and agreements with buyers to stabilize demand and pricing.
  
• Advocate for financial incentives or subsidies for companies that adhere to sustainable production practices and market stabilization efforts.
• Monitor and adjust production quotas based on comprehensive market analysis and forecasts.