Party is over for dirt-cheap solar panels, says China executive
reuters.com
reuters.com
Module assembly is simple enough that some of those lines could be reactivated in response to demand, but module assembly has always been the easiest part. Smaller wafer and cell manufacturers that go bust probably won't see their equipment resurrected anywhere. Newer capacity from the likes of JinkoSolar, LONGi, and GCL yields more wafers per ingot and more efficient cells from wafers, more consistently, at lower costs.
Do you know how Jinko is handling such thin wafers when they assemble their own modules? If they're making cells of such thinness they presumably have found a way to do it; nobody can afford to accidentally break half of their cells on the way to modules.
So it looks like capacity is being reduced.
Will capacity increase again? Probably. But your mention of cheating seems to be suggesting it's a cartel, I don't think that view is supported by the article, so have you got any other evidence?
You guys need to read up on what happens when a government subsidies something. The subsidies allows inefficient producers to stay in business and it also results in over production....which is what pushes the price artificially low. Once the subsidies end. The weakest go out of business and only the most efficient producers stay in business.
200GW would make sense however.
This is one of the top manufacturers today:
https://www.hanwha-qcells.com/
A Chinese cell and module manufacturer acquired a Chinese ingot manufacturer. Korea's Hanwha Group subsequently acquired this merged Chinese entity as well as the German solar manufacturer Q-Cells. The merged Hanwha Q-Cells is vertically integrated from cells to modules.
A handful of manufacturers like GCL have vertically integrated even further:
- Refined silicon production
- Ingot production from purified silicon
- Wafers from ingots
- Cells from wafers
- Modules from cells
I don't know if that depth of integration makes sense long-term or not. Some companies have been burned in the past as they integrated with producers that weren't close enough to the leading edge. All of these steps are evolving rapidly in small increments; a vertically integrated producer has to keep pretty close to the leading edge at every stage if they don't want to see their integration advantages reverse.
What if your manufacturing outputs are also getting to be commodities? The example I was thinking of was refrigerated cargo containers. The inputs are obviously commodities. The outputs are also getting to the point where the cost of financing to build stock for sale or lease is getting to be onerous for smaller players.
The party being referred to was had by nonChinese developers, as they were getting panels cheaper than anticipated. That meant more profit for them.
Now that those forced sellers have gone there isn't anyone willing to undercut everyone, so theres some support to prices.
aka "The Walmart Playbook".
Edit: I found the source (cued up for 37:25) https://youtu.be/lDxJsa8miNQ?t=2245
[0]: https://www.carbonbrief.org/mapped-worlds-coal-power-plants [1]: https://www.forbes.com/sites/judeclemente/2019/01/23/coal-is...
The consequence of having 1.4 billion people in your society, is that you don't get to pollute at the rate of a nation with one million people that outputs 10x more pollution per capita.
Is that unfair? No. I don't think per capita equality of pollution is the most important factor in this. As a society China has to bear the consequences of their immense population and its impact on the earth. Pre-emptively I'll note this isn't a defense of any other nation's high per capita pollution output level.
Globally we have to take the China output very seriously, and we can afford to not be nearly so concerned about the 10x output of the one million person nation because it's not a dire threat to the planet (which isn't the same thing as not caring about their output, it's a difference of one threatening human existence and the other not; I'm far more concerned about North Korea's nukes & missiles than the localized authoritarian militia activity in a tiny nation - even though they might both be reprehensible governments, one is far more dangerous).
So if China were to split up into a whole bunch of separate countries, it would be acceptable for each of those countries to have a higher per capita pollution rate than is acceptable for current China?
As you noted, the Earth doesn't care. That's why per capita is the correct way to handle this. Otherwise, whether a given set of people producing a given level of pollution is acceptable changes depending on how you draw arbitrary political boundaries among those people.
I don't think war is good for anyone but it has a way of reducing both population and carbon output.
Only recently they relaxed it to avoid social side effects and unbalance in proportion between generations, and fertility rate is still bellow that of the USA (1.62 vs 1.80).
EU plans to be carbon emissions neutral by 2050. (Reduction of emissions, planting forests, increasing use of renewables, and so on)
That is quite aggressive for the EU and we'll see how it plays out e.g. with the use of goal.
Critiquing others is easy.
Of course, being the historic polluters, we shouldn't point with fingers here. They do have a right to wealth like any other economy in the world. But I think that wealth + renewable energy sources are possible. China has giant deserts. The only real problem is energy storage, but until a good cheap solution is found, you could just use conventional sources until the night or if there's no sun.
We'll eventually get to a point where we generate 5% of the world's power with solar and people will still underestimate its impact and will still claim its too expensive to scale...
Even my local electricity coop, which sends me climate change denial newsletters every month[1][2], is buying solar.
the fact that they are both silicon technologies I think is tangental
1. Cutting subsidies should raise prices. I guess the subsidy cut could have offset a steeper decline, but the article is full of head-scratchers like this one.
2. When has China ever cut a major subsidy?
55% of solar capacity installed in 2017 was installed in China, so a fall there is going to have a big impact on the global market.
Expected to climb 10-15% over two years.
Doesn’t seem like the party has ended. Just cooled a bit.
Is this an actual known pattern or just a strange side effect of this situation?
It's possible that the price will keep dropping until the panels are cheap enough to move at their current production capacity. But it's also possible that the lost profits make this level of production unsustainable, and solar panel costs climb back up as manufacturers shut down their no longer profitable lines and supply drops. It depends partly on what their margins are now, and what cost reduction room they have.
China's MO is to subsidize Chinese businesses, restrict foreign competition internally, and steal foreign companies IP until they are bankrupt, while simultaneously being allowed to export their goods to those same countries with no penalty. Then they jack up the prices when all the competition is gone
Everybody criticized Trump for the steel and solar tariffs because they don't think beyond next quarter earnings report. What happens in 20 years when China has a monopoly on steel, solar, and other key industries and they decide to jack up prices? The rest of the world won't be able to do anything about it because they are junkies and China is the supplier
Germany is also a predatory exporter in Europe, but fewer people seem to care about that. The US definitely doesn't want to end up having the same relations with China as Southern European countries ("PIIGS") have with Germany. You can't win if you have zero leverage left to negotiate.
I'm a democratic socialist, but tariffs are not the way to control trade and standards of living. That is a mercantilist attitude from the 19th Century. Tariffs are paid by the consumers in the country that has the tariffs (ie Tariffs on China by US is paid by people in the US). It primarily hits those that spend most of their income on consumption, which is those that are poorer.
What is needed is the power of Labor (ie unions etc) to be applied in the foreign country, by having restrictions on goods and services that are not provided by Labor with fair conditions.
That's not the same as pay or money, there are comparitive advantages in things like the supply and demand on local food production etc.
But consumers are already paying for the current situation in Germany. Instead of tariff, Germany decided to put downward pressure on salaries via the Hartz reforms. The effects are not far from tariff in that it shifts money from consumption towards savings/investments. That's why Germany has such a large trade surplus. And like tariff, it's a losing solution. In the end, your currency should reevaluate. Germany is just lucky to have the euro.
For a long time, I was really puzzled by why the German European partners stuck with Germany in the currency union were so tolerant of pretty much being spoiled. But after Macron, I think it's pretty clear: the richest are far too happy to be able to present lowering salaries and degrading work conditions as an inescapable part of modern economic competition. They are after all on the right side of the rising inequality.
Although this would generally negate the need for tariffs, there are serious issues:
-You can't enforce this. It's a very different country on the other side of the globe.
-You can't properly observe working conditions for the entire supply chain (and conversation on what constitutes "fair conditions" can enter the realm of philosophy very quickly)
-Even if labor was in control of production, they could still act maliciously as a group
-Small transient fluctuations in efficiency are magnified without a hard cutoff to stop them from using the extra capital to become too big and undercut competition
And on top of that, rich countries have to face a sharp recession while the poor countries catch up. That's not a small amount of time. In much of Europe we already have 1-2 generations that faced very harsh economic conditions because of this. Generosity has limits. Yes, free trade (generally, not always) allows poor countries to develop faster, but they grow asymmetrically and the working/middle class of rich countries suffers too.
I thought tariffs are leftist proposition. At least in Europe it is.
There are valid reasons not to implement tariffs too, but having completely unrestricted trade imbalances is a bad idea no matter how you look at it.
The opposite of tariffs is common quality, safety, labor, ecological impact requirements.
Tariffs are just a tax on one part of the local population to subsidise another part. Tariffs are paid by the importer, not the exporter.
For the exporter, not being able to export to a particular country, if there are other markets available, is a hindrance, not a killer.
The US is a big market for Chinese solar panels, but so is the rest of the world.
China was a big customer for US soybeans, now it buys none. This has ruined US farmers, but the global soybean market has taken up that slack.
Tariffs are dumb, clunky, 19th century tools for a global, multinational world. We need to accelerate not just the flow of capital, but also of labor, we need to make sure that the benefits of development are shared, not "trickled down".
We need to bring the 3rd world to the level of the 1st, not drag the 1st down to the 3rd. It's not a zero-sum game.