In 2012, the global photovoltaic (PV) industry experienced a tough year marked by declining demand, overcapacity, and financial struggles. Europe and the U.S. imposed anti-dumping and anti-subsidy measures, while China's domestic market was still in its early stages. Manufacturing capacity far exceeded demand, leading to frequent debt crises and a near "dead" state for the PV market. However, as the year came to a close, signs of recovery began to emerge.
The Chinese government introduced new policies aimed at rescuing the industry, while emerging markets like Japan and the UK saw a surge in solar investments. Warren Buffett also announced a $1 billion investment in a third PV power plant project, signaling renewed confidence in the sector. Industry insiders began to believe that the worst might be behind them.
Indeed, the government’s efforts to support the PV sector were evident through successive policy adjustments. The initial target for the 12th Five-Year Plan was set at 10 GW, but it was later raised to 15 GW and then 21 GW. By the end of 2012, the target had reached 35 GW—more than double the original figure. This increase is expected to inject around 250 billion yuan into the market, especially if additional tariff subsidies and tax incentives are implemented.
While the long-term outlook looks promising, current market fundamentals are also showing signs of improvement. After nearly nine months of continuous price declines, PV product prices started to rebound in early 2013. Prices for single-crystal silicon wafers and cells rose significantly, along with polysilicon, indicating a gradual recovery.
Many top-tier domestic manufacturers reported operating rates above 80%, with some running at full capacity and facing urgent orders. However, not all companies fared well. Several major firms, such as Vosges Co. and Jiangsu Sunshine, faced bankruptcy or severe financial distress due to falling prices and overcapacity.
Vosges became the first A-share listed PV company to declare bankruptcy, followed by Jiangsu Sunshine, which filed for the liquidation of its subsidiary Ningxia Sunshine Silicon. The latter reported losses of about 250 million yuan in 2012 and was insolvent.
According to ENF Business Consulting, more than 350 companies in the PV supply chain shut down or went bankrupt in 2012. Most of these were upstream polysilicon producers, where overcapacity and falling prices created a challenging environment.
Despite some positive signs, many companies remained in a period of capacity reduction. While large players like Yingli Green Energy maintained profitability due to low costs and strong order volumes, smaller firms struggled to survive.
The policy environment remains critical. Although the government has taken steps to boost the industry, challenges remain. For instance, uncertainty around distributed PV subsidies and delayed payments for renewable energy projects continue to affect investor confidence.
Analysts predict that global PV module shipments will reach 30 GW in 2013, up 8% from the previous year. However, global production capacity exceeds 50 GW, meaning excess supply will take time to absorb.
The domestic market is seen as a potential lifeline, but sustained growth requires refined policies and better implementation. Without clear guidance on subsidies and financial support, the industry may face further delays in full recovery.
Overall, while the PV market shows signs of rebounding, a complete recovery may not happen until 2014. There are investment opportunities across the supply chain, but the road ahead remains challenging.
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