A new round of large-scale investment trends in the Chinese PV market
August 27 10:07:47, 2025
Since July, with the introduction of the State Council's "Several Opinions on Promoting the Healthy Development of the Photovoltaic Industry" (referred to as the "Opinion"), a new wave of investment in the photovoltaic sector has gained momentum. Major state-owned enterprises such as Huaneng, Datang, Guodian, and Huadian have taken on large-scale projects, including a nearly 30 billion yuan power-free population photovoltaic independent power supply initiative. Meanwhile, China National Machinery Industry Corporation is investing 20 billion yuan in a 2,500-megawatt desert ecological photovoltaic power station in Ningxia. AVIC also launched the largest distributed photovoltaic project. All these developments are primarily driven by central state-owned enterprises.
Wang Sicheng, a researcher at the National Development and Reform Commission’s Energy Research Institute, noted that “this round of large-scale investment in China’s PV market is clear, but unlike before, it is now led by central enterprises rather than private ones.â€
Private enterprises, however, face significant challenges. The subsidy policy, which is crucial for their survival, remains unimplemented. Many companies are struggling with liquidity issues and tight credit conditions. Before 2009, the PV industry was dominated by private firms, but after the global downturn in 2009–2010, many faced severe financial difficulties due to high debt and the impact of anti-dumping measures in Europe and the U.S. Companies like Yingli, Suntech, and Trina Solar experienced sharp declines in market share.
Liu Peng, deputy general manager of Youtai New Energy, pointed out that banks have been reluctant to lend to PV companies, putting further pressure on an already fragile industry. “The development of the PV industry cannot be separated from financial support,†he said. While the "Opinions" suggest supportive policies, implementation remains slow, leaving private firms hesitant to invest.
Recent reports indicate that the government plans to increase the on-grid tariff and subsidies for PV projects. For large-scale stations, the lowest tariff will rise from 0.75 to 0.9 yuan per kWh, while the highest will go up to 1.1 yuan. Distributed systems will see a subsidy increase from 0.35 to 0.42 yuan per kWh. However, private enterprises remain cautious, waiting for final clarity before making decisions.
In contrast, central enterprises are aggressively expanding. After receiving over 50 billion yuan in allocated projects, several state-owned groups formed the Green Photovoltaic Eco-Cooperative Organization to build national PV power plants. These organizations aim to integrate upstream and downstream resources, offering comprehensive services from equipment supply to operation and maintenance. They plan to develop 5 GW of capacity this year.
Zhang Wei, an investment director, observed that private companies lack the capital and access to financing that central enterprises enjoy. “Many private firms want to participate but lack the funds,†he said. Central SOEs, on the other hand, can secure large credit lines and manage complex guarantees, giving them a competitive edge.
Despite this, some critics warn that the current rush may lead to overcapacity, similar to past government-led investments. Zhou Junsheng, a financial commentator, warned that without proper market demand, large-scale investments could result in waste and inefficiency. He emphasized that profitability depends on market acceptance, not just policy support.
As central enterprises continue to expand into downstream applications, analysts predict they may soon move into the component manufacturing sector, further reshaping the industry landscape.
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