China is expected to produce 25% more solar panels this year compared to last year due to growing domestic sales and demand from the US as well as emerging markets, according to Wang Bohua, secretary general of China’s photovoltaic industry association.
The solar panels to be produced this year are projected to have a combined capacity of 60 gigawatts (GW). China produced panels with capacity of 48 GW in 2016.
Despite growing global demand, China’s solar industry faced challenges ranging from possible tariffs abroad to inadequate grid connections at home, Wang told an industry gathering.
The US has told the World Trade Organization (WTO) it was considering putting emergency “safeguard” tariffs on imported solar cells, a move aimed at shielding its industry from a damaging, unforeseen surge in imports.
The US has been vying with China and India to become a market leader in an industry where production costs have tumbled, favoring producers of scale.
In China, solar generation has been hindered by wastage or curtailment, in which inadequate grid connections mean not all capacity is utilized.
“Wasted solar power in northwestern China is still significant and it may extend to a broader region such as the central and northwest part of the country,” Wang said.
Environment group Greenpeace said solar curtailment rates across China rose 50% in 2015 and 2016, with more than 30% of available power in northwestern province Gansu and Xinjiang failing to reach the grid.
Wang also said there was no efficient system to solve a shortfall in subsidies for the solar industry.
As capacity has surged, Beijing has struggled to find the cash to pay subsidies to renewable energy producers, with the shortfall last year exceeding 60 billion yuan (US$8.86 billion), according to industry estimates.
China had a total of 101.82 GW installed solar capacity by June, after adding 24.4 GW in the first six months of 2017, the industry association said. It will soon reach 110 GW, the target Beijing had aimed to achieve by 2020.
Wang said there is great potential for China’s solar industry to develop in the long term thanks to the firm foundation the Paris Accord has set for solar power. China’s Belt and Road Initiative, which would boost trade links through regional transport and infrastructure projects, would help as well, he added.