How to view solar PV installed capacity surpassing coal power for the first time

As this netizen observed, the PV industry, now topping China’s “installed power generation capacity ranking”, was stuck in deep trouble over a decade ago.

Around 2012, after years of rapid expansion, China’s PV equipment manufacturing sector hit a severe winter. Many small and medium-sized enterprises struggled to survive, and even leading firms suffered heavy losses or went bankrupt.

This stands in sharp contrast to the impressive performance of China’s PV industry today. China has maintained the world’s largest installed PV capacity for consecutive years, and boasts the globe’s most complete and competitive PV industrial chain.

How did this transformation take place in just over a decade?

The story began in the first decade of this century. Back then, China’s fledgling PV industry saw explosive growth: by the end of 2010, national PV cell output had climbed to 8,000 megawatts, accounting for roughly half of global production.

Nevertheless, high growth did not equate to high quality, and hidden risks persisted. First, the industry faced the predicament of reliance on external sources for raw materials, equipment and markets: over 90% of polysilicon was imported, more than 70% of finished products were exported to Europe and the United States, and production lines were filled with foreign-brand machinery. Second, the industry remained trapped at the low end of the value chain: development was dominated by imitation, replication and OEM processing, with excessive duplicated construction and low technological standards. Starting in 2011, several Western countries launched anti-dumping and countervailing investigations, delivering a heavy blow to China’s PV sector. Markets shrank overnight, and the industry entered a cold spell.

Low self-reliance stemming from the “three external dependencies” and weak competitiveness from its low-end positioning were the root causes of China’s PV woes.

What was the way forward? Targeted and comprehensive measures were adopted, adhering to the principle of “placing the country and nation’s development on the basis of our own strength”. Since the 18th National Congress of the Communist Party of China, with the goal of building a new energy system, relevant authorities have rolled out a series of policies covering product manufacturing, market application, fiscal and taxation support, ushering in a “new spring” for the PV industry.

On the demand side, the domestic market was unlocked to absorb the massive production capacity. In 2013, the State Council issued the Opinions on Promoting the Sound Development of the Photovoltaic Industry, arranging the rollout of distributed PV systems and the construction of PV power stations. Starting from 2015, the PV “Pioneer Program” was implemented to accelerate the commercialization of technological breakthroughs. From 2021 onwards, large-scale PV bases were built in desert, Gobi and arid regions, creating vast blue “PV seas” across barren wastelands. Green transition was advanced and domestic demand potential fully tapped, leading to widespread PV stations and growing demand for PV equipment. As for overseas markets, Chinese enterprises no longer fought alone. From Europe, America to the Middle East and Southeast Asia, they shifted from merely exporting products to delivering production, management, branding and services, steadily expanding their global network of partners.

On the supply side, efforts were stepped up to achieve self-reliance and strength in science and technology, freeing production from external dependency. Breakthroughs were achieved in multiple areas of module manufacturing technology; crystalline silicon cell conversion efficiency repeatedly set new world records; R&D of next-generation technologies such as perovskite cells was accelerated; new energy storage, ultra-high voltage and other technologies gradually matured, compensating for the intermittency and volatility inherent to PV power generation. Joint efforts from industry, universities, research institutes and end users have driven continuous upgrades of China’s PV products and power generation technologies.

Market access was broadened and application scenarios opened up; supporting infrastructure was improved to speed up adoption; technologies were iterated to cut costs; mechanisms were refined and the business environment optimized. Supported by a complete industrial system and abundant application scenarios, the positive interaction between supply and demand effectively reversed the “three external dependencies”, and the competitiveness of the PV industry kept rising. Today, China accounts for over 90% of global polysilicon, silicon wafer and cell production capacity, and more than 80% of global module capacity. Domestic equipment has become the mainstay of production lines. The average levelized cost of electricity (LCOE) for PV projects has dropped sharply. Clean, economical and reliable, backed by solid core strengths, PV power’s share of installed capacity has risen from less than 0.2% in 2011 to the current 31.5%.

Looking back on the development of the PV industry, we can see the scientific path and success formula for nurturing and expanding emerging industries. When the PV sector went through its winter, some were pessimistic and others hesitant. Yet the country’s top-level design never wavered, clearly stating that “we will unswervingly advance the sustained and sound development of the PV industry”. It is through unwavering pursuit of high-quality development, full and faithful implementation of the new development philosophy, and accelerated efforts to foster a new development pattern that China’s PV industry turned risks into opportunities and built strength through long-term accumulation.

This brings to mind the ongoing shift between old and new growth drivers and industrial upgrading, where enterprises in some sectors are facing new challenges. Challenges confronting industrial development are precious opportunities for adjustment and upgrading. By moving toward newer and higher-quality growth, industries can always weather economic cycles and forge ahead amid pressure.