Photovoltaic (PV) producers have delayed or canceled capacity expansion plans and even reduced production, partially addressing overcapacity issues.

China’s solar photovoltaic (PV) industry’s protracted battle against overcapacity may be coming to an end, after years of bitter price wars and rapid capacity creation that plunged half the sector into the red, leaving which forced closures and interrupted expansion plans.

Several solar panel producers have delayed or canceled capacity expansion plans and reduced production through 2024, and analysts expect the trend to accelerate further this year, amid hopes it will resolve the company’s overcapacity issues. the industry.

“Taking into account the recent accelerated release of production capacity, we believe the supply and demand situation of the PV industry could correct for the better in 2024,” Wu Bohua and Cao Haihua, analysts at Changjiang Securities, said this month.

China’s installed solar photovoltaic (PV) power generation capacity increased 55.2 percent in 2023, adding more than 216 gigawatts (GW) of solar power, data released by the National Energy Agency showed. Driven by this breakneck pace of expansion, the country is expected to meet its 2030 target of 1,200 GW of renewable capacity five years ahead of schedule, according to analyst forecasts.

A worker inspects solar panels at a solar facility in Dunhuang, 950 kilometers (590 miles) northwest of Lanzhou, Gansu province, on September 16, 2013. Photo: Reuters

But panel makers have been adding capacity at a faster pace, with the result that despite the country’s record solar installation under its 2060 carbon neutrality goal, China’s solar panel sector is grappling with an excess capacity. This has sparked a brutal price war, forcing many players to close their doors.

According to a report by industry portal Century New Energy Network published this month, among the 58 publicly traded Chinese solar PV companies that have issued 2023 earnings estimates, nearly half, or 25 companies, expect to report lower gains or even losses, a contrast to the optimistic picture painted by China’s solar energy installation sector.