The article discusses the ups and downs of China's photovoltaic (PV) industry, highlighting a year filled with challenges and eventual hope. Although the feared "catastrophe" didn't materialize, 2012 was still a rollercoaster for the sector, marked by overcapacity, trade disputes with the EU and the US, and falling demand in key markets like Italy. This led to a so-called "Doomsday Crisis" for many companies.
However, if 2012 is seen as a difficult year, it can also be viewed as the starting point for the domestic PV market. By the end of the year, a series of new policies were introduced, signaling a shift in government support and setting the stage for growth. It seems that the solar energy sector is on the verge of a new beginning.
This rapid turnaround—from a "winter" to a "star of tomorrow"—was unexpected but exciting, even if much of the change was reflected in media reports and analyst predictions. The real turning point came when the government showed a stronger commitment to supporting the industry. On December 19, Premier Wen Jiabao chaired a State Council meeting to discuss measures aimed at promoting sustainable development in the PV sector. Key initiatives included encouraging distributed solar power and establishing region-specific grid prices based on local resources.
Internationally, the situation was equally challenging. After facing anti-dumping investigations from the EU and the US, as well as declining demand in Italy, the industry saw a sharp drop in product prices. Polysilicon prices fell by more than 90% compared to three years earlier, and many companies either shut down or reduced production. PV module prices dropped from $0.95/W in early 2012 to $0.66/W by November, causing profits across the supply chain to plummet. Major players like LDK and Wuxi Suntech struggled with high debt and low margins.
Amid these difficulties, the government began rolling out supportive policies. In September, the National Energy Administration released its "Twelfth Five-Year Plan for Solar Power Generation." In October, the State Grid Corporation issued guidelines for integrating distributed PV into the grid. Other ministries also announced plans for "Golden Sun" demonstration projects, with the second batch totaling 3.83 GW.
Industry experts believe these policies are crucial for recovery. The "Golden Sun" program, in particular, has been seen as a direct and effective way to boost investment. Companies like Hanergy have already started preparing applications, showing strong confidence in the future.
Meanwhile, the global market also showed signs of improvement. Germany planned to raise electricity tariffs in 2013 to support renewables, while Japan's aggressive solar policies drove rapid growth in installed capacity. Global solar installations in the first half of 2012 reached around 13 GW, up 25% year-on-year. Industry analysts expect the second half to be even stronger, pushing annual installations above 30 GW.
Despite these positive developments, challenges remain. Grid connection and subsidy intensity have long been major obstacles. Recent policy updates, however, signal progress—State Grid now accepts small-scale PV systems, and subsidies are being adjusted to make projects more profitable.
Looking ahead, the industry is optimistic. GF Securities predicts a surge in distributed PV in 2013, with total domestic installations expected to reach 7–8 GW. Meanwhile, the polysilicon market may finally stabilize, with demand and supply coming into balance.
While the government's actions are critical, some experts caution against rushing the development of the sector. Li Junfeng, a senior official in renewable energy, warns that without careful planning, the industry could once again face another "crazy" phase. For now, though, the signs point to a brighter future for China’s solar industry.
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