This photo taken on February 21, 2024 shows workers inspecting solar panels at a rooftop of a power plant in Fuzhou, in southern China's Fujian province. (Photo by AFP) / China OUT
BEIJING: The fierce competition sweeping China’s solar sector is threatening the quality of production at some companies, as plunging profits trigger a scramble to cut costs, according to a top industry executive.
“We’ve noticed that people have started to sacrifice quality to cut costs, which is a dangerous signal,” Zhong Baoshen, chairman of Longi Green Energy Technology Co, said last Friday at the Boao Forum for Asia in Hainan, China.
China dominates the global solar industry, but years of rapid expansion have generated serious overcapacity and a battle for survival among producers.
With solar-panel prices slumping to record lows, companies have been forced to sell at or below production costs. Longi has cut thousands of jobs amid the downturn.
One of the ways that Chinese solar companies have brought down production costs over the past decade is by slicing ever-thinner square wafers that house photovoltaic cells, saving money by reducing material costs.
Now, some are doing that too quickly: pushing out products without adequate testing to understand how the cells will fare over a lifespan of 20 to 30 years, he said.
“When people are slashing costs or skimping on raw materials, there comes a risk,” Zhong said.
The Longi executive also called for governments in other major economies to avoid damaging global free trade, which he said remains necessary to keep clean-power costs low and bolster the global energy transition. — Bloomberg
