"Photovoltaic powers" blueprint is emerging

Abstract Since the "double anti-dumping" measures imposed by the United States in early November 2011, the global photovoltaic (PV) industry has undergone significant changes over the following 22 months. These changes included two major "double reverses" 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 largely resolved the key uncertainties that once threatened the future of China’s PV sector. As these factors take effect, a clearer roadmap for the development of China's photovoltaic industry in the coming years is emerging.

The Last Boots Landed

Starting from November 2011, three major events shaped the Chinese PV market: the U.S.-EU "double anti-dumping" actions and the large-scale launch of the domestic market.

According to Wang Bohua, Secretary-General of the China Photovoltaic Industry Alliance, the three major markets—United States, European Union, and China—account for approximately 70% of the global PV demand. He stated, “The implementation of the China-EU PV price commitment marks the final step in stabilizing the market environment for China’s PV industry. At this point, there are no major uncertainties affecting the sector.”

Wang Shijiang, also from the China Photovoltaic Industry Alliance, explained, “Currently, the U.S. imposes double anti-dumping duties on Chinese solar cells. However, by using third-party cell components, Chinese PV modules can still be exported to the U.S. Under the EU price commitment, Chinese PV modules will focus more on high performance and after-sales service. Meanwhile, the domestic market is expanding rapidly, helping to offset losses from the U.S. and EU markets.”

“These combined factors have placed pressure on the core components of PV modules, forcing the U.S. market to accept higher prices, while the EU market is testing the efficiency and lifespan of solar products. At the same time, the domestic market is pushing for more efficient battery technologies,” said Wang Shijiang.

"Strong Body Slimming" Transformation Road

Wang Bohua emphasized that understanding the impact of the "price commitment" negotiations requires a clear assessment of the domestic PV industry. First, China has the potential to become a leading manufacturer in the global PV sector, driven by labor cost advantages, economies of scale, and technological leadership. Second, the previous model of rapid, extensive growth in the PV industry is unsustainable.

“The trade disputes between China and the U.S. and the EU were caused by a price war triggered by the overexpansion of domestic companies. While the U.S. and EU markets remain important, they cannot undermine China’s position as a major player in the PV industry. However, it is clear that the need for 'transformation and upgrading' is urgent,” Wang Bohua said.

Xiao Xiaotong, Chairman of Suzhou Artes Company, noted that after the initial imposition of 11.8% anti-dumping duties, EU prices rose to about 52 euro cents per watt. “This level essentially puts Chinese and South Korean PV modules on equal footing. When prices reach 56–57 euro cents per watt, the ‘price killer’ strategy of Chinese PV products is no longer viable. The industry must now embark on the path of ‘strong body slimming’—focusing on quality and efficiency rather than low costs,” he added.

“At present, the Chinese PV industry needs to stabilize itself and actively transition from a ‘low-cost’ model to a ‘high-quality and efficient’ one. The China-EU price commitment has created space for this transformation, but it also brings significant downward pressure,” Xiao Xiaotong said.

Avoiding the Phenomenon of “Bad Money Driving Out Good Money”

Wang Bohua pointed out, “In recent years, the ‘small and scattered’ structure of the Chinese PV industry has been evident. SMEs that neglected after-sales service and product quality gained cost advantages through price wars, putting leading enterprises at a disadvantage.”

“Replacing high anti-dumping duties with price commitments effectively prevents the phenomenon of ‘bad money driving out good money,’ which is a positive force promoting the reshuffling of the Chinese PV industry,” said Xiao Xiaoyu. “With a price floor in place, big companies are no longer being undercut by SMEs. In this scenario, leading companies with strong brands, R&D capabilities, and sales channels will gain a significant competitive advantage in the EU market.”

Wang Bohua further explained that the State Council’s No. 24 document clearly sets entry thresholds for PV cells, such as photoelectric conversion rate and polysilicon energy consumption, signaling that relevant departments are accelerating the elimination of weak players and actively preventing the “bad money drives good money” phenomenon.

PV Quotas Emerge

According to information provided by PV companies, the “Measures for the Implementation of the Price Commitment of Exported Photovoltaic Cell Products to the European Union” has clearly defined the allocation method and standards for “quotas.” Specifically, 60% of the annual export volume is allocated based on the share of PV module exports to the EU, 30% is reserved as an incentive for participating industry defense companies, and 10% is prioritized for smaller exporters, as well as those with strong brands, high-tech solutions, and solid financial backing.

Regarding pricing, the minimum selling price of 56 euro cents per watt has been largely confirmed. Although this adds only about 4 euro cents per watt, it represents a significant burden for the overall investment in power plants. “According to this calculation, the investment for a 100 MW PV power plant could increase by up to 4 million euros,” said Liang Tian, Director of Public Relations at Yingli.

It is worth noting that the current price and quota levels in the price commitment scheme are not fixed. According to the agreement, the price will refer to the average price from Bloomberg in the last quarter, and if the benchmark price fluctuates by more than 5%, the minimum price will be re-evaluated. Similarly, the quota is based on the previous year’s consumption, and if the difference exceeds 10%, it will be adjusted accordingly.