China High Tech Drive
The four-day Third Plenum in Beijing was the first meeting of the Central Committee that President Xi presided over since securing a third term in power. The lack of specific measures to tackle the ongoing residential property woes was disappointing although the shift to increase overall funding to local authorities was welcome. President Xi also vowed to make “high-quality development” the guiding force of the economy.
The global manufacturing of solar panels is totally dominated by China. Estimates vary but the surge in capacity in recent years has seen capacity utilisation slump to 50-60%. P-type solar cells dominate capacity at present (circa 85% market share) but are likely to be replaced by the more efficient N-type solar cells.
N-tyle cells are designed with a specific doping process to improve efficiency and performance. Doping refers to introducing impurities into a pure silicon wafer to alter its electrical conductivity. P-type cells have an efficiency of between 15-22% although some have been rated as high as 23.6%. N-type cells can reach efficiencies of 25.7% and one would expect that number to climb further.
The International Technology Roadmap for Photovoltaic projects that N-type cells’ mono-crystalline silicon (c-Si) will reach a market share of 28% by 2028, up from a mere 5% in 2017, while Solar Magazine estimates that N-type cells will account for 70% of production by 2032.
Interestingly the Ministry of Industry and Information Technology (MIIT) recently announced new guidelines stipulating that existing and new capacity on N-type solar cells must exceed an average photoelectric conversion efficiency of 25% and 26%, respectively. Is this the death knell for the 85% market share P-type cells as “high-quality development” accelerates? Probably. Some estimates suggest that over 20% of current capacity will exit the market in short order, potentially lifting capacity utilisation significantly.
The larger, better financed and better managed firms will survive and benefit from the exit of bit time players. We have seen this in the Chinese steel industry where decarbonisation and digitalisation dominate official policy.
If you would like to receive The Daily Update to your inbox, please email markets@epicip.com or click the link below.