The history of reading teaches us wisdom, and this principle applies equally to companies and industries. Over the years, the 3-year expansion plan for Single Crystal Long Long Co., Ltd. has drawn attention to the photovoltaic (PV) industry. In 2017, the PV sector was booming, with many companies rushing to expand their production capacity.
This wave of expansion was driven by the "630 rush to install" stimulus, as major PV players competed fiercely for market share. Interestingly, the rapid growth of PV capacity from 2017 to now mirrors the situation in 2007 and 2008. However, the uncontrolled expansion back then led to a decline for many PV firms. After a decade, what has changed? Will history repeat itself, prompting the industry to reflect deeply?
A "Great Leap Forward" in productivity is underway. PV companies are engaged in an intense race to expand their capacities. Recently, Longji announced a three-year strategy, aiming to increase its monocrystalline silicon wafer production from 15GW at the end of 2017 to 28GW by 2018 and 45GW by 2020. That’s an 87% increase this year alone.
Another major player, Zhonghuan, added 5.8GW of single-crystal silicon capacity in September 2017. By the end of 2019, it aims to reach 23GW. According to insiders, the 2019 target is a buffer to secure 23GW by 2018. Both Longji and Zhonghuan are pushing hard this year, showing that the monocrystalline silicon boom is just the beginning of a broader industry expansion.
According to data from the China Photovoltaic Industry Association, domestic PV installations in 2017 hit a record high of 53GW, up 53.6% year-on-year. This surge includes increased output across the entire supply chain, such as polysilicon, wafers, and solar cells.
Beyond monocrystalline silicon, the polysilicon sector is also expanding rapidly. Tongwei stands out with its bold investments. In 2017, it spent 34.14 billion yuan on self-built and joint photovoltaic projects, exceeding its 2016 revenue of 20.684 billion yuan. The company raised nearly 10 billion yuan through bond issues, asset restructuring, and divestments.
Tongwei plans to build two 100,000-ton polysilicon projects in Baotou and Leshan, boosting its total capacity beyond GCL-Poly to become the world's largest producer. Other companies like GCL-Poly, Trina Solar, Zhonglai, and Artes are also joining the expansion wave.
The current expansion is closely tied to the “630 rush to install†stimulus. In late 2016, the National Development and Reform Commission reduced the grid-connected tariff for PV power plants in 2017, creating a strong incentive for companies to complete projects before June 30, 2017 to qualify for higher 2016 rates.
As a result, new PV installations in the first half of 2017 reached 24.4GW, surpassing the same period in 2016. Analysts say this expansion, fueled by price incentives and private investment in distributed and poverty-alleviation PV, has boosted domestic growth and even caused temporary oversupply.
Xue Jing, director of the Information Department at the China Electricity Council, noted that China is now the world’s largest consumer of solar power, a far cry from a decade ago when the country was both technologically and market-wise behind.
Many industry sources believe companies are expanding to gain more market share. But history warns of risks. From 2007 to 2008, overcapacity led to a bubble, followed by double investigations and financial crises. Many giants, including Wuxi Suntech and Jiangxi Levy, faced severe challenges.
Today, concerns about overcapacity resurface. A senior executive from a leading Chinese PV firm said the industry is more mature now than in previous cycles. Analysts like Wang Xiuqiang from Huachuang Securities predict a Matthew effect, where large, efficient companies will dominate, while smaller, high-cost competitors struggle.
Despite optimism, warnings remain. Wang Bohua, vice chairman of the China Photovoltaic Industry Association, urged caution, emphasizing that expansion must align with global demand and technical readiness. He expressed concern about repeating the 2011 oversupply crisis.
In summary, the PV industry is once again entering a phase of rapid expansion, driven by policy incentives and market competition. While some see opportunities for growth and consolidation, others fear a return to past mistakes. The future of the industry hinges on balancing ambition with sustainability.
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