"Photovoltaic powers" blueprint is emerging

Abstract Since the U.S. "double anti-dumping" measures in early November 2011, the global photovoltaic (PV) industry has undergone significant shifts over the following 22 months. These include two major trade disputes between the U.S. and the European Union, as well as a rapid expansion of the domestic market in China. The implementation of the China-EU PV price commitment has helped to reduce the key uncertainties that previously affected the outlook for China’s PV sector. As a result, the strategic roadmap for the development of China's PV industry in the coming years is becoming more defined.

The Last Major Shift

Since the beginning of November 2011, three major events have shaped the Chinese PV market: the "double anti-dumping" measures by the U.S., the EU's price commitments, and the large-scale launch of the domestic market.

According to Wang Bohua, Secretary-General of the China Photovoltaic Industry Alliance, these developments mark the end of an era of uncertainty for the Chinese PV industry. “The implementation of the China-EU price commitment has eliminated the most significant risks affecting the future of the industry,” he said.

Wang Shijiang, another official from the alliance, explained that while the U.S. continues to impose double anti-dumping duties on Chinese solar cells, many Chinese PV modules are still being exported using third-party components. In the EU, the price commitment has forced Chinese manufacturers to focus on higher performance and better after-sales service. Meanwhile, the domestic market is expected to compensate for losses from the U.S. and EU markets through aggressive expansion.

“These combined factors have shifted the pressure from battery production to module manufacturing. The U.S. market has become more competitive, the EU is now testing efficiency and lifespan, and the domestic market is pushing for high-efficiency panels,” Wang added.

The Path of 'Strong Body, Slimming'

Wang Bohua emphasized that recognizing the impact of the price commitment negotiations requires a clear assessment of the domestic PV industry. First, China is well-positioned to become a leading global manufacturer due to its cost advantages, economies of scale, and technological capabilities. However, the previous model of rapid, extensive growth is no longer sustainable.

“The trade disputes with the U.S. and the EU were driven by a price war fueled by excessive overcapacity. While the U.S. and EU markets remain important, they cannot undermine China’s position as a global PV leader. But this also highlights the urgent need for industrial transformation and upgrading,” Wang said.

Xiao Xiaotong, Chairman of Suzhou Artes Company, noted that after the initial imposition of anti-dumping duties, EU prices rose to about 52 euro cents per watt. “At this level, Chinese and South Korean PV modules are essentially on par. Once prices hit 56–57 euro cents, the so-called ‘price killers’ of Chinese products are gone, forcing the industry down the path of ‘strong body, slimming’—focusing on quality and efficiency rather than just low costs.”

“China’s PV industry must now stabilize and transition from a low-cost model to a high-quality, efficient one. The China-EU price commitment has created space for this transformation, but it also brings intense downward pressure,” Xiao added.

Avoiding the 'Bad Money Driving Out Good' Phenomenon

Wang Bohua pointed out that in recent years, the PV industry has suffered from a fragmented landscape, with small enterprises prioritizing cost over quality and after-sales service. This led to unfair competition and put larger, more reputable companies at a disadvantage.

“By replacing high anti-dumping duties with price commitments, we’ve avoided the ‘bad money driving out good’ situation, which is a positive step toward accelerating the industry’s restructuring,” said Xiao Xiaoyu. “Now that there is a floor on prices, big companies are no longer at the mercy of smaller players. Leading firms with strong brands, R&D capabilities, and sales channels will gain a significant edge in the EU market.”

Wang also mentioned that the State Council’s No. 24 document set clear entry thresholds for PV cells, such as photoelectric conversion efficiency and polysilicon energy consumption, signaling a push to eliminate the problem of weak enterprises undermining the whole industry.

PV Quotas Emerge

According to information from PV companies, the “Measures for the Implementation of the Price Commitment of Exported Photovoltaic Cell Products to the European Union” outlines a quota system. Of the annual export volume, 60% is allocated based on past exports to the EU, 30% is reserved for supporting key industry defense companies, and 10% is given to smaller exporters with strong brand presence, high-tech capabilities, and solid financials.

In terms of pricing, the minimum selling price of 56 euro cents per watt has been largely confirmed. Although this adds only 4 euro cents per watt, it significantly increases the total investment required for solar power plants. “For a 100 MW PV plant, this could raise the investment by up to 4 million euros,” said Liang Tian, Director of Public Relations at Yingli.

It’s worth noting that both the price and quota in the current agreement are not fixed. Prices are based on the average from Bloomberg, and if the benchmark fluctuates by more than 5%, the minimum price will be adjusted. Similarly, quotas are reviewed annually, and if the difference exceeds 10%, they will be revised.