On January 3, China’s Ministry of Industry and Information Technology issued “Questions and Answers on Implementation Measures for Capacity Replacement in the Glass Industry”, which included glass for solar panels in the capacity replacement range as new capacity can only be added if the old capacity is eliminated.
The specific provisions of the document are as follows:
It is strictly forbidden to register and build flat glass plants to expand the production capacity. If it is really necessary to build a new building, an alternative reduction process or its equivalent should be carried out to develop a highly efficient capacity replacement program.
For flat glass construction projects located in environmentally sensitive areas designated by the state, the amount of production capacity to be replaced is determined at a rate of at least 1.25 times that of the construction project, and other areas are replaced by the same amount.
The capacity used to replace the construction project must be closed before any new plant can be commissioned and must be dismantled and withdrawn within one year of the new plant being built.
The capacity used to replace the factories shall be the declared capacity to close and exit them on the portal of the Department of Industry and Information Technology in the province after January 1, 2018.
Background on this law
Since 2019, the demand for photovoltaic glass has increased dramatically for two reasons:
1) With the development of solar panel industry outside China, the increasing demand and various component companies have increased their production capacity, which has greatly increased the demand for glass for solar panel;
2) Bifacial double-sided panels are favored by investment power companies because of their excellent cost performance. Which exceeds the global demand for solar panel glass.
The principle of replacing the current production capacity of flat glass (including solar panel glass) essentially limits the increase in the production capacity of glass for solar panels and will become less available in the future, which may increase the price of e.
