An increasing number of Chinese manufacturers of photovoltaic equipment are quebrando ou entering financial restructuring processes na China, amidst a scenario of excess supply and price war in the industry, according to a report from Bloomberg.
A subsidiary of Zhejiang Akcome New Energy Technology was the most recent request for equivalence to bankruptcy in China, when it was ordered by a court to undertake a reorganization process after a creditor said the manufacturer “was not able to pay debts” and clearly “had no solvency".
On April 30, the active from Zhejiang Akcome Photoelectricity Technology totaled 2,513 billion yuan (US$346,4 million) and the debts were 1,562 billion yuan, according to the record in Shenzhen Stock Exchange.
Akcome's failure comes after another smaller manufacturer, Gansu Golden Solar, entered into a pre-reorganization process in early July.
“We follow this on a daily basis, and we often go to China just to understand how it works. And in the last two years we have really seen an oversupply. Today, cell production capacity in China is practically double the global need,” he said. Sérgio Polesso, founder of PHB.
"A lot of people there are desperate, selling at any price. And, in order not to lose a lot of money, they are using B and C quality cells and will experience a huge deterioration in a short time. In five, six years, production could fall by up to 50%”, Reported.
According to the executive, the scenario in China reflects a lot in Brazil. “You bought a module for 0,25 cents per watt, at the beginning of 2023. Currently, it is 0,075. We know that the production cost is much higher than that. So, it's really a big competition".
"The small businesses in China bought stock and need to get rid of it to pay some bills and get out of the market. Already the large conglomerates, usually, They don't only work with solar s, they work with other products, they come from another type of industry that s their business”, he explained.
Therefore, according to Polesso, for small companies, alternative brands in the country, it is very complicated. “They are selling at any price, they cash out and disappear, and many will disappear".
“You also have to consider that 5% of global production is acquired by China itself and the country has now taken a step back. The Chinese government, which is the big buyer and has excess inventory, has also reduced its purchasing volume,” he added.
According to him, in Brazilian market is basically the same. “We see a lot of people importing very cheap, poor quality things, creating an unfair war here.”
"The end customer does not know [solar energy]. It's not when he goes to buy a refrigerator, where he knows the brands, but just that he's forgetting that there are electronic equipment that will fail”, concluded the founder of PHB.
Given this scenario, what to do?
Felipe Santos, Latam director at DAH Solar, highlights the importance of manufacturer's choice when deg a photovoltaic system. “Quality aspects are undoubtedly very important, but looking at Company longevity is increasingly crucial. We are talking about systems that have a durability of 30 years, so the partnership with the manufacturer must be proportional to this period.”
Santos also highlighted aspects to be evaluated when making a decision. "It is fundamental check whether the company has a tradition in the segment, how long ago it was founded, if it has verticalized production, how long it has been present in the Brazilian market, the relevance of the Brazilian solar sector for this manufacturer and the presence of local structure with local team – simple but valuable aspects at this moment of decision”.
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Answers of 2
In my opinion, I really prefer Solar Energy, even with these false comments. I am very satisfied with our Solar Energy, it was the best and most economical in Brazil.
The approach is excellent, as in an extremely competitive market, there are many manufacturers with the lowest price, but with much lower quality, which will certainly penalize generation productivity in a short time.
And those who don't know this market, prioritizing only the immediate cost of acquisition, will end up understanding it in the worst way.