According to data from the General Administration of Customs, in the first 11 months of 2023, the number of solar cells exported by my country (calculated in units of 10,000) increased by 42.4 year-on-year, and the amount increased by 1%.

Where does the comparative advantage of China's solar energy manufacturing industry, and even the new energy industry, come from? An important reason why the new energy industry can produce an export advantage lies in the support of huge domestic demand, "which is also an important source of advantage for our exports, that is, the scale operation industry will become a comparative advantage".

According to the report, China is the world's largest solar module. The report estimates that China's domestic solar capacity will be more than twice that of the United States and the European Union combined in 2023, and the significant cost advantage of Chinese companies means that they account for more than 80% of global module capacity.

According to the report, China's current dominance in solar module supply looks assured for the next decade or more. Taking the total price of solar modules in December 2023 as an example, the cost in China is US $0.15/watt, which is much lower than that in India (US $0.22/watt), Europe (US $0.30/watt) and the United States (US $0.40/watt). This means that components made in China are 50 percent cheaper than those produced in Europe and 62.5 percent cheaper than those produced in the United States.

Driven by the US Inflation Reduction Act (IRA) and the Indian government's introduction of the Production Linked Incentive Program (PLI), the US and India have announced more than 200 gigawatts (GW) of solar module capacity since 2022. Looking beyond China, India is expected to overtake Southeast Asia as the second largest component producing region by 2025, driven by India's strong PLI incentives.

Where does the secret come from?

The report shows that China's huge manufacturing base is the key to the falling costs. Meanwhile, in other markets, rising costs have slowed down the pace of solar PV cell manufacturing. There are opinions that Chinese domestic companies enjoy relevant subsidies, but the report said, "but this is not the whole story." Falling interest rates, low energy costs, fierce domestic price competition and support for research and development also played a role.

Equally important is the support of indirect systems, such as large investments in transmission, energy storage, flexible capacity and manufacturing, while lower domestic costs and fewer solar power restrictions keep Chinese companies alive. A senior German business person who has been engaged in Sino-German business operations for many years was quite impressed by the first financial reporter's mention of the development of photovoltaic in the past ten years. In 2011, he was communicating between China and Germany.

According to EU calculations, China exported solar panels and related components worth 21 billion euros to the EU in 2011, accounting for 70% of China's total photovoltaic manufacturing output. Subsequently, on September 6, 2012, the European Commission announced the launch of an anti-dumping investigation on all photovoltaic modules and components (including solar cells and silicon wafers) exported from China.

The German business veteran told reporters that he could see that some of his Chinese entrepreneurs and friends were planning to go to Africa or South America to plan the production of solar panels, but the German business community at that time also tried to "hide" in Germany to protect their own things, and the facts proved that anti-dumping/countervailing investigations did not help the EU photovoltaic industry to turn over.

The report believes that in the past two years, the EU and the United States have made great progress in renewable energy policy. But many experts say that for solar module production industries like China to reach critical scale, commercial applications are needed.

"A study of the photovoltaic industry in China and the United States shows that China's dominance in solar panel manufacturing is not only driven by labor prices and government support, but by larger-scale manufacturing and the resulting supply chain benefits. Driven." Kennell said.

According to the national power industry statistics from January to November 2023 released by the National Energy Administration on December 19, 2023, as of the end of November, my country's cumulative installed power generation capacity was about 2.85 billion kilowatts, a year-on-year increase of 13.6 percent. Among them, the installed capacity of solar power generation is about 0.56 billion kilowatts, a year-on-year increase of 49.9; the installed capacity of wind power is about 0.41 billion kilowatts, a year-on-year increase of 17.6.