Trade disputes hit solar export prices

According to the Photovoltaic Product Branch of the China Chamber of Commerce for the Import and Export of Machinery and Electronic Products, the value of solar cell and module exports plunged 31 percent year-on-year to $6.5 billion in the first six months.

Prices were down 41 percent, while export volume increased 17 percent, the organization said on its website on Friday.

Shipments to the European Union fell about 58 percent, in contrast to a sharp rise in sales to Japan (up 150 percent), India (100 percent) and South Africa (2,200 percent).

Solar panel sales to the EU reached 21 billion euros ($27.9 billion) last year. But after the EU initiated an anti-dumping probe into Chinese solar products starting in November 2012, many Chinese panel makers had to cut prices to garner orders in Europe.

Li Junfeng, head of the China Renewable Energy Industry Association, which is under the National Development and Reform Commission, said the industry's biggest problem is still excess capacity.

"Some companies have shifted their focus from overseas markets to domestic sales or turned to downstream activities. These are good ways to adapt to the situation," he said.

China's solar industry, which is the largest in the world, has been buffeted by trade disputes with the EU and United States. As a result, it's looking actively for new domestic customers and for buyers in new markets such as Japan.

However, 90 percent of China's solar companies' production was exported in 2012, making the domestic market an ever-more important alternative.

The Chinese government has been working to increase demand in the domestic market. In July, it raised the 2015 target for cumulative installed photovoltaic capacity to 35 million kilowatts from 21 million kW previously.

The National Energy Administration plans to set up distributed solar PV demonstration power plants across the country, and large State-owned enterprises are becoming active in the sector.

SOEs, including Huaneng Power International Inc, China Datang Corp and China Guodian Corp, will participate in building distributed solar plants, with total investment reaching 29.4 billion yuan ($4.8 billion), the National Business Daily reported on Friday.

The higher target for PV capacity "signals the nation's determination to develop solar energy is stronger than market expectations. Industry insiders said they believe specific subsidy policies will be announced in August.