The China Effect- 5 Global Solar Manufacturing Plans Hit By The Solar Price Slump

As the call for clean energy grows, solar plants and plans to manufacture solar equipment have garnered the limelight across the world. But the recent trend of dropping prices, thanks largely to the massive production glut in China, has put paid to many such plans. This oversupply across the solar supply chain, that started first with Polysilicon, and spread further down the supply chain, has triggered a collapse in global prices and provoked import duties from trading partners.

In some case like the US, incentivised by the generous Inflation Reduction Act (IRA) , manufacturers are moving ahead with factory plans, but many other plans worldwide have taken a hit. Regions like Europe have taken a particular hit, thanks to higher operating costs. With Chinese modules available at as low as 11 cents/watt, European manufacturers claim they cannot operate at rates below 21 cents. Even in India, experts believe local manufacturers need prices above 18 cents or higher to breakeven.   Manufacturing plans are still underway in many countries, notably in the US, India and soon, even Europe, where the EU is determined to nurture a domestic manufacturing base. These are all backed by protective domestic regimes, be it tariff, or non-tariff. Even Australia has launched a ‘moonshot’ project to undertake solar manufacturing, acknowledging just how tough it is to compete with the Chinese majors today.

Here we list five such solar plants in prominent countries in the world that were closed due to lower prices:

• Meyer Burger, a Switzerland-based heterojunction cell and panel manufacturer, stopped making PV modules in Germany in January but continued to produce solar cells in the country. Meyer Burger is now focused instead on its US plans.
• Bill gates backed Solar manufacturer CubicPV has scrapped its plan to develop a 10 GW silicon wafer factory in the United States.
• In January, JSW Energy in India put its solar module manufacturing plans on hold, citing a record fall in prices of solar panels.
•  Even Reliance backed German startup  Nexwafe is believed to be evaluating plans announced to build a 6 GW wafer plant in the US, that was scheduled to be up by 2027.
• Finally, beyond the obvious, probably the biggest impact is being felt in China itself as we write, where there was a massive rush to enter solar manufacturing. The herd mentality has taken down profitability at many of the top players, and now, expect to hear about many cancellations, besides shuttering, of some of the smaller, older players, and some new expansion plans as well.