PV companies strive to survive China-EU dispute

China's solar panel producers are trying to further develop the domestic market amid an ongoing trade dispute with the EU.

The country's photovoltaic (PV) companies will likely experience an industry reshuffle, according to industry insiders who added that the companies should shift to the domestic sector to offset export losses.

Following an anti-dumping duty recently imposed by the EU, the price of Chinese PV cells has exceeded that of products from the Republic of Korea (ROK) and Taiwan in the EU market, said Liu Jianli, marketing director for the Linuo Power Group.

Based in east China's Shandong Province, Linuo is a leading provider of solar photovoltaic power generation systems.

China and the EU hope to solve the dispute through price undertaking talks, Commerce Minister Gao Hucheng said Friday at a press conference following a session of the China-EU Trade and Economic Joint Committee.

Earlier this month, the EU imposed an interim anti-dumping duty of 11.8 percent on imports of all Chinese solar panel products, including panels, cells and wafers. The duty may be raised to an average of 47.6 percent two months after going into effect if both sides fail to come to an agreement.

Analysts said the government is encouraging mergers and restructuring, as well as decrease overcapacity, in order to aid the struggling industry.

In December 2012, the government issued policies to support the sector, include setting on-grid electricity prices according to local conditions and subsidizing the use of PV-generated power. Giving more power to market forces and reducing government interference have also been part of the government's efforts.

"We are focusing on the domestic market by promoting ground power stations, rooftop 'power plants' and household power plants for more customers," said Zhou Guangyan, president of Linuo.

Zhou said residential customers can profit by selling household-generated power to utility companies.

According to a report released by the National Energy Administration last August, China will have 21 million kilowatts of installed solar power generation capacity by 2015, six times more than the current amount.

The government also hopes to boost the share of distributed PV power plants as part of the country's total installed PV power capacity to 50 percent this year.

"This is the right choice for us, as China's PV generation capacity is still in its infancy compared with the massive consumption of conventional energy," Zhou said.

"We are still confident in China's PV industry, as we will get past temporary overcapacity and overexpansion by seizing the domestic market," said Huang Ming, chairman of China Himin Solar Co., Ltd.