Experts call for inclusion of PV sector in energy framework

China should integrate its photovoltaic manufacturing sector into the formal management framework of the energy industry to avoid price competition and safeguard the nation's strategic transition to a green economy, said industry experts and company executives.

Shedding price competition and redefining PV production as a core energy component are vital in maintaining China's global leadership in renewable technology, said Liu Hanyuan, a deputy to the 14th National People's Congress and chairman of the board of Tongwei Group, a major solar silicon provider.

China boasts a complete manufacturing system where capacity and output in core chain links exceed 90 percent of the global total. Despite China's end-to-end self-sufficiency in PV manufacturing, the sector has been mired in a cycle of disorderly, low-price competition.

With global manufacturing capacity more than double that of actual demand at present, the industry has suffered total losses exceeding 100 billion yuan ($13.8 billion) over the past two years, said Liu.

In the capital markets, the total market value of the sector has shrunk by nearly 4 trillion yuan from its historical peak, posing a potential risk to national financial stability, he said.

Since 2024, the industry, with fierce price wars at home that have depressed export prices, has faced a "volume up, price down" dilemma, eroding profits and leading to anti-subsidy investigations abroad.

Liu said that the current management of PV as a general industrial product fails to reflect its strategic importance to energy and foreign exchange security.

"The PV industry is no longer just a general manufacturing sector; it is the core support for our new energy system and 'dual carbon' goals," he said.

China is taking action. According to an announcement earlier this year, China will eliminate the value-added tax export rebate for photovoltaic products starting on April 1.

Liu Yiyang, executive secretary-general of the China Photovoltaic Industry Association, said he believes the withdrawal of continuous tax dividends marks a crucial moment for the Chinese photovoltaic industry to temper itself in the fire of pure market competition.

The urgency of Liu's proposal is underscored by the worsening geopolitical situation in the Middle East.

Conflicts and the potential closure of the Strait of Hormuz have sent international oil prices surging. With China's relatively high oil dependency, a robust, self-sufficient PV industry acts as a vital "energy valve" to protect the domestic economy from external price shocks, he said.

"China has built the world's largest renewable energy system, and our technology is mature enough to support faster domestic installation."

Liu said that by the end of 2025,China's cumulative wind and solar capacity had reached 1.84 billion kilowatts, surpassing coal-fired power for the first time.

However, domestic growth slowed in 2025 due to policy uncertainties following market-oriented electricity reforms, with 2026 potentially seeing the first negative growth in years if the price competition pressures are not addressed.

To stabilize the sector, Liu proposed that the government should integrate PV manufacturing into national energy planning, so as to align manufacturing capacity directly with national grid construction and energy development targets.

By fostering a "manufacturing-application-consumption" synergy, the government can bridge the current gap between production and actual power utilization, effectively reducing wasteful overcapacity, he said.

He also called for the establishment of a comprehensive national monitoring platform to track critical data points such as production capacity, energy consumption and product quality to enhance the resilience of the entire solar supply chain against extreme geopolitical or market-driven disruptions.

Looking toward the 15th Five-Year Plan (2026-30) period, Liu said solving overcapacity through accelerated domestic application will not only end industry-wide losses, but also help China reach carbon neutrality five to 10 years ahead of schedule.

"By prioritizing high-quality development, we can ensure that China continues to lead the global green revolution while securing our financial and energy future," he said.

zhengxin@chinadaily.com.cn