In a surprise shift, China says it will put a cap on new utility-scale solar projects in 2018. In addition, the government will reduce feed-in tariffs, the money it pays to producers that send solar electricity to the grid.
Manufacturers of solar materials tell C&EN they are working to assess the policy’s impact. China is the world’s largest solar market, accounting for 54% of global demand, according to industry tracker GTM Research.
Not all types of solar projects fall under the new policy. Still, GTM cut its installation forecast for China this year by 40% to 28.8 gigawatts. “It’s not looking good for suppliers on any part of the chain—there’s going to be a lot of pressure,” says GTM senior analyst Jade Jones.
In the past decade, countries that were once solar leaders, such as Germany and Spain, also lowered subsidies when installations and the cost of subsidies grew too quickly. Now China is adjusting its policies to wean its growing solar power industry off subsidies.
Materials used in solar modules are made all over the world. Leading suppliers include Wacker Chemie and Hemlock Semiconductor, which supply polysilicon wafers, and DuPont, which produces polymer back sheets.
Chuck Xu, director of DuPont’s photovoltaic materials business, expects “some near-term market disruptions” but says, “The industry as a whole will continue on its trajectory of growth.”
The extent of the impact at Wacker will depend on a number of factors, including new installations in other regions, which might compensate for possible setbacks in China, spokesperson Christof Bachmair says.