How does the photovoltaic industry turn crisis into opportunity?

Recently, China's photovoltaic (PV) sector has faced numerous challenges due to economic sanctions from Western nations led by the U.S. Several PV companies have filed for bankruptcy. In response, CCTV conducted an extensive investigation into this issue, revealing that the primary cause behind the suspension of operations at many PV firms was "overcapacity." To begin with, let’s clarify what the photovoltaic industry entails. The optimal way to harness solar energy is through photovoltaic conversion—using the photovoltaic effect to convert sunlight into electricity via silicon materials. This process has given rise to the photovoltaic industry, which spans the production of high-purity polycrystalline silicon raw materials, solar cells, solar panels, and associated manufacturing equipment. Despite its potential, this sector remains underutilized in China. You might wonder: if domestic usage is limited, how did these companies end up with overcapacity? The answer lies in the nature of the PV industry being export-oriented. China imports high-purity silicon from abroad, leverages its low labor costs, and uses local facilities to produce solar cells and panels. These products are then sold at low margins to markets like Europe, the U.S., and Japan. However, when Western countries imposed sanctions on China’s PV sector, one side of the equation—exports—was effectively blocked. With the number of importers unchanged and domestic demand still minimal, overcapacity became inevitable, leading to the collapse of several PV companies. So, what steps can we take to address this predicament? In my view, the solution lies in fostering domestic demand. Currently, less than 5% of PV products manufactured in China are consumed domestically, while the remaining 95% rely heavily on overseas markets. Given the shrinking foreign market, shifting focus to internal demand is crucial. Interestingly, regions like Europe and Japan, which dominate global PV consumption, aren’t ideal candidates for solar power generation due to their temperate maritime climates, characterized by frequent cloud cover and insufficient sunlight. Conversely, China boasts vast plateaus and desert regions in areas such as Tibet, Xinjiang, Qinghai, Gansu, and Inner Mongolia, which constitute nearly half of the nation’s total land area. These regions receive abundant sunlight yet remain largely uninhabited and unused. Thus, they present an unparalleled opportunity for solar power development. According to recent reports, government bodies and state-owned enterprises like the national grid are likely to roll out supportive policies encouraging distributed PV systems and expanding the scale of initiatives like the second batch of the Golden Sun projects. This could provide much-needed impetus to domestic PV firms. While Western sanctions pose challenges, they also offer opportunities. By redirecting the focus of the PV industry toward domestic markets, we can drive the growth of renewable energy and accelerate the transformation of China’s energy landscape. In essence, crises often bring unforeseen opportunities. Instead of viewing the sanctions as setbacks, we should embrace them as catalysts for innovation and growth. The PV industry holds immense potential, and with the right policies and investments, it can emerge stronger than ever.