China's PV industry faces overcapacity

Better technology is one thing, but China's solar companies are also facing another challenge - overcapacity.

In 2012, China's PV industry suffered enormous losses thanks to overcapacity.

Wang Yiyu, chief strategy officer of Yingli Green Energy Holding Co. Ltd., said, "The global production capacity is about 60 gigawatts, while China's capacity occupies more than 60 percent of it. But the installation capacity is only 30 gigawatt, only half of the production."

Besides overcapacity, decreased demand from Europe and US puts more pressure on China's PV industry. In 2012, 25 PV companies listed in China's stock market lost nearly 23 billion yuan, while some others listed abroad even received warns of delisting.

Mei Xinyu, researcher of Chinese Academy of Int'l Trade & Economic Cooperation, said, "The next three years will be a period during which many PV companies will be weeded out globally. We have strived for 60 percent market share in the past years, so its decisive that we can survive in the following years."

PV companies are now shifting to other markets, like India, Japan, Malaysia and Australia. Meanwhile, China is also working on promoting PV power generation to more areas, so as to support the development of the domestic industry.