China to Set Another Solar Record Even as Industry Struggles

(Bloomberg) -- China will set another record for solar power installations this year even as the industry producing the equipment suffers from falling prices and profit margins.

The country will install 230 to 260 gigawatts of solar capacity this year, said Wang Bohua, chairman of the China Photovoltaic Industry Association. That will top the record of 217 gigawatts set last year, and is an increase from the group’s February forecast of 190 to 220 gigawatts. 

Rapid development of the nation’s desert power bases and measures to support rooftop panels are helping push installations higher than previously thought, Wang said at the group’s annual conference in Yibin on Thursday. Grid construction has also accelerated, allowing solar energy to be transmitted to demand centers further afield, he said.

Continued strong demand for panels in the world’s largest market is a rare bright spot for solar manufacturers this year, given that over-capacity has cut prices to record lows, causing billions of dollars in losses and forcing some smaller producers out of business.

Falling prices meant the value of solar manufacturers’ output fell 45% in the first nine months of the year, or by 570 billion yuan ($78 billion), Wang said. Exporters also took a hit, as the value of overseas sales fell 35% in the first 10 months of the year to $28 billion. 

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