Let’s face it: a lot of good stuff comes out of China and we probably all have something in our life that is functional and was bought at a lower cost than we previously thought possible. They sure do know how to drive scale.
However, like you I have also occasionally fallen victim to buying some absolute junk after being seduced by the lowest price. This is not restricted to China of course; it’s just that so many products come out of China now it’s pretty hard to avoid getting the occasional lemon.
The solar industry is no exception and today more than 80% of the world’s PV product is made in China, but much of it is outstanding quality. The Chinese government has recognised that they need to improve the image of this sector and recently announced new reforms designed to address this.
Only a few short years ago, it was estimated that 750 PV companies were active in China. Many of them have already exited the industry or been forced to close due to oversupply, huge debts and/or a rapidly falling price.
In January 2014, the Ministry of Industry and Information Technology published a new list of “compliant” PV manufacturers as part of its ongoing efforts to continue this much needed PV industry rationalisation.
The definition of “compliance” is fascinating in itself, because it arguably foretells the future (or otherwise) of many PV companies because compliance isn’t going to be easy for many of them.
The five page document outlines the conditions for companies involved in the entire manufacturing chain from poly-silicon production through to module manufacturing. Titled: “PV manufacturing industry norms & conditions to further implement the scientific concept of development-guided PV manufacturing industry to speed up transfer”, it includes some very detailed and highly specific clauses such as:
- Manufacturing capacity (cells and modules ) >200MW p/a
- Companies must be investing in Research and Development and have sales and service capabilities
- Cell conversion efficiencies greater than 16% (and other targets for non-silicon products)
- New facilities have higher efficiency targets
- Degradation rates of not more than 20% in 25 years
These are just a few, and as you can see are aimed are increasing the performance and service levels of the PV manufacturing sector and the annual capacity alone, will force a number into consolidation or closure. Interestingly, there are also some broader requirements such as:
- Average energy consumption for silicon ingot plants of not more than 9kWh/kg (7kWh/kg for new plants)
- Support to comply with ISO14001 environmental management system certification, ISO14064 certified greenhouse gases and PAS2050/ISO14067 carbon footprint certification
- ISO9001 quality management system certification, life of not less than 25 years, warranty period of not less than 10 years
- Quality management systems, full time quality inspectors and accredited laboratories
- Establishment of appropriate product traceability systems
These should help drive a new era of energy efficiency and quality management through the companies that can comply. They are complimented by other requirements for workers’ safety, incident reporting, education and training, hazard and risk mitigation strategies and, refreshingly, a list of environmental compliance rules specifically to do with hazardous waste management.
So far only 109 companies have been listed, although 6 monthly reviews will see this evolve. Even more interestingly, when you filter the list to exclude replication and silicon manufacturers, we are left with perhaps 35 PV module brands. That’s 35 companies, down from around 750.
Of course, ensuring compliance and forcing exits in the real world is a different matter but it highlights two things; 1) things are set to change in China and 2) you should choose your supplier very carefully if they are from China.
© 2014 Solar Choice Pty Ltd
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