Sex, lies and China solar capacity
After nearly a month of investigation, the solar lovers at China's Ministry of Science and Technology now believe all this worry about overcapacity in the China PV poly market is a bunch of hooey probably made up by solar incumbents who have a vested interest in spreading rumors and misinformation to undercut solar carpetbaggers looking to raise money for factories and get their slice of sunshine. Confused? So were we.
Let me help you read the technocratic tea leaves. Previous reports said there are more than 50 factory projects in the pipeline for polycrystalline silicon, which would total 230,000 tons. Laughable, you say? Of course it is. And now we are happy that the good technocrats at MoST have “confirmed” that only 10 among those 50 projects will probably ever see the light of day. They reckon new, actual capacity will only be 15,000 tons – which is still too much considering estimates put China's poly production capacity at 20,000 tons a year, with an output of about 4,500 tons in 2008 and 10,000 tons in 2009.
Here’s the gossipy part: MoST says the previous, exaggerated reports are based on scheduled capacity provided by local governments and enterprise owners who offered best-case scenarios to attract investment or to look good for the overlords in Beijing. In short, they lied.
But they weren’t the only ones. MoST also believes that the folks spreading rumors (i.e. white lies) of doomsday overcapacity scenarios for poly are mainly big companies who entered this field earlier and are worried about a slew of new-comers funded by cheap loans and generous breaks from local governments – ironically, exactly the way they got into the business.
Not to be sticklers, or to stoke any bureaucratic rivalries, but we’d also like to point out that Zhu Hongren, chief engineer at the Ministry of Industry and Information Technology (MIIT) warned on August 26 that repetitive construction and overcapacity in solar, wind and other emerging clean energy industries in China had become increasingly serious.
MoST didgrudgingly admit there is some overcapacity, but they think it’s probably nothing the industry can’t handle. I doubt, however, this is going to change the government’s decision last month to curb investment in the sector by ordering commercial banks not to finance projects. So, in the end, it looks like the big players in China are set to get bigger and the carpetbaggers will turn to something else – for a while, at least.
SHAMELESS PLUG/HONESTDISCLOSURE: I work for RedTech Advisors (China) Ltd., which offersresearch, investment and strategy services related to China'sConsumerTech, CleanTech and MedTech markets. For more info, please see www.redtechadvisors.com.
Let me help you read the technocratic tea leaves. Previous reports said there are more than 50 factory projects in the pipeline for polycrystalline silicon, which would total 230,000 tons. Laughable, you say? Of course it is. And now we are happy that the good technocrats at MoST have “confirmed” that only 10 among those 50 projects will probably ever see the light of day. They reckon new, actual capacity will only be 15,000 tons – which is still too much considering estimates put China's poly production capacity at 20,000 tons a year, with an output of about 4,500 tons in 2008 and 10,000 tons in 2009.
Here’s the gossipy part: MoST says the previous, exaggerated reports are based on scheduled capacity provided by local governments and enterprise owners who offered best-case scenarios to attract investment or to look good for the overlords in Beijing. In short, they lied.
But they weren’t the only ones. MoST also believes that the folks spreading rumors (i.e. white lies) of doomsday overcapacity scenarios for poly are mainly big companies who entered this field earlier and are worried about a slew of new-comers funded by cheap loans and generous breaks from local governments – ironically, exactly the way they got into the business.
Not to be sticklers, or to stoke any bureaucratic rivalries, but we’d also like to point out that Zhu Hongren, chief engineer at the Ministry of Industry and Information Technology (MIIT) warned on August 26 that repetitive construction and overcapacity in solar, wind and other emerging clean energy industries in China had become increasingly serious.
MoST did
SHAMELESS PLUG/HONESTDISCLOSURE: I work for RedTech Advisors (China) Ltd., which offersresearch, investment and strategy services related to China'sConsumerTech, CleanTech and MedTech markets. For more info, please see www.redtechadvisors.com.
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