The Chinese solar manufacturers across the value chain are rapidly expanding capacity as the global demand has crossed the 100 GW level and is set to continue to rise given the cost competitiveness of solar energy.
With solar (NYSEARCA:TAN) energy already the cheapest energy source in many parts of the world and with the cost curve showing a declining trend, demand continues to grow. The Chinese companies are rapidly expanding capacity building multi-GW solar plants in China to take advantage of the demand. These companies are already assured for the 50 GW of annual domestic demand which is almost exclusively captured by the Chinese companies. Using the domestic base as captive, these companies also have captured a sizable chunk of the international markets with their low costs and scale. The scale is only getting bigger with large new mono PERC cell and module capacities being set up.
Even at the upstream part of the supply chain, Chinese companies are setting up giant capacities. GCL and Zhonghuan Semiconductor are setting up a 60,000 ton polysilicon plant in Xinjiang where East Hope has already set up a 120,000 ton poly plant. Major mono wafer makers Longi and Jinglong are also setting up 5 GW plus mono wafer plants in the southwestern part of China where the power costs are very low at roughly 3 cents/kWh as poly and wafer facilities require large amounts of power.
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Tongwei has already announced that it would set up a giant 10 GW solar cell plant while Aiko Solar has completed a 4 GW new mono bifacial PERC solar cell factory. The Chinese solar manufacturing industry is almost completely dominant across the world and these new plans will stretch the lead further as the new technologies are increasing the efficiency and decreasing the costs. Other non-Chinese companies will not have the technology or the scale to compete with the Chinese giants. While antidumping duties have been put on Chinese imports by Europe and USA (and maybe by India in the near future), these have been almost totally ineffective as they have been circumvented by Chinese factories in Malaysia, Vietnam and Thailand. Now with a widening gap in technology(NYSEARCA:XLK), the other solar companies do not have much of a chance at all.