PV companies should be careful when building overseas
As the global solar industry continues to evolve, more and more Chinese photovoltaic (PV) companies are exploring international expansion. However, building factories overseas is not without its challenges. While some firms aim to avoid price commitments by setting up manufacturing bases abroad or partnering with OEMs, success stories remain rare. Establishing overseas operations involves high risks, long investment cycles, and complex regulatory environments. Additionally, the European Commission has raised concerns about Chinese companies potentially circumventing trade restrictions through foreign subsidiaries, signaling a closer watch on such activities.
Starting August 6, 94 Chinese PV companies will benefit from an anti-dumping agreement that allows them to export silicon wafers, cells, and modules to the EU under certain conditions. The key terms include a minimum export price of 0.56 euros per watt for PV modules and an annual cap of 7 GW. This agreement marks a first in China-EU trade relations, seen as a political win for the Ministry of Commerce and the Electrical and Mechanical Chamber of Commerce. For many domestic PV companies, however, the impact is limited. At 0.56 euros, it's difficult for Chinese manufacturers to compete effectively in the EU market, especially given the region’s competitive landscape. Most companies view the quotas as largely symbolic, as they don’t significantly affect their overall export volumes.
Moreover, the agreement’s pricing and quota rules are not fixed. Recent updates suggest that future market conditions—particularly in May and June—may lead to adjustments in the minimum prices and export limits imposed on China. This uncertainty adds another layer of complexity for companies planning their export strategies.
The European Commission has also signaled that it will closely monitor Chinese firms that move production overseas. These companies will need to justify the purpose of their foreign investments and demonstrate legitimate trade incentives. If the commission determines that a company is deliberately bypassing the price commitment rules, it could face penalties under the agreement.
This strategy isn’t new. In 2011, during U.S. anti-dumping investigations, major Chinese PV companies explored overseas expansion to reduce tax exposure. Eventually, they found alternative solutions, such as importing components from Taiwan to avoid high tariffs. Today, more Chinese PV firms are pursuing similar paths, with only a few like China Light & Power, Suntech, and Artes having established overseas facilities. Yet, despite these efforts, the industry remains heavily reliant on exports and scale-based competition.
With government support for domestic market growth, companies should focus on building a strong foundation at home before expanding globally. Emphasizing technological innovation can help establish a sustainable competitive edge. Currently, China still lags behind global leaders in advanced R&D, cutting-edge technology, and high-end manufacturing equipment. To bridge this gap, the industry must prioritize innovation.
One example is Hanergy, which recently acquired GlobalSolarEnergy, a U.S. firm. This acquisition enabled Hanergy to become the first company worldwide to mass-produce flexible thin-film solar modules. It represents a major step forward in the company’s global integration strategy and could significantly boost the development of China’s PV sector.
Additionally, energy storage solutions developed by Sumida and Tianjin Electric Drive Design Institute have gained recognition, including TUV certification. These innovations highlight how Chinese companies are shifting their focus from pure technical performance to practical application and profitability. As more firms invest in R&D, the PV industry stands to benefit from a more innovative and resilient future.Intellective Electric Meter,Industrial Electric Meter,General Electric Meter,Electro Industries Meters
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