China plans to restrict the export of key technologies for solar panel silicon wafers, to ensure the world’s leading position and to combat the US development ambitions

In order to accelerate the construction of renewable energy, the United States has passed laws to expand solar energy production capacity; however, it has recently been reported that China, a powerful power in the solar energy industry, will draw up a list of restricted technologies for export, restricting the important components of solar energy “silicon wafers” and “silicon ingots” technology export. Analysts pointed out that China’s move is not like countering the United States, but more like ensuring their dominance in the field of solar energy.

China’s New Technology Export Regulations Hit U.S. Development of Solar Industry

The US-China trade war is likely to enter a new stage. On February 3, industry insiders told the Wall Street Journal that the Ministry of Commerce and the Ministry of Science and Technology of China are planning to include silicon wafers and silicon ingots, which are important raw materials for solar energy, into the list of export restrictions.

According to industry insiders, at present, almost all solar silicon wafers and silicon ingots in the world, as well as related manufacturing processes and equipment, are monopolized by China. Among them, large-scale solar panels play an even more important role in the photovoltaic industry.

According to data from the International Energy Agency (IEA), China accounts for more than 80% of the market in the manufacturing of solar panels; 97% of the world’s solar-grade silicon ingots and wafers are also produced in China. Nomura Securities also estimates that under the circumstances of energy shortages and soaring electricity in recent years, global solar installations will grow by a substantial 50% from 2022 to 2023, which will become the growth momentum of Chinese solar industry players.

According to the report of King & Wood Mallesons , China’s law firm responsible for export-related laws and regulations , the changes in China’s export control legal system can see that export control has shifted from traditional sensitive areas such as biology and chemistry to important Chinese cores such as telecommunications and Internet data security and energy. Trends in technology creep.

If the “Strengthening Technology Import and Export Management” list is adopted, Chinese optoelectronic companies will have to obtain permission from provincial commerce authorities before they can export such technologies. Abigail Ross Hopper, CEO of the Solar Energy Industries Association of the United States, said bluntly that China’s beginning to raise export restrictions is an important evidence that the United States should be vigilant in expanding its solar manufacturing scale.

America’s dilemma: Need cheap solar parts from China, but can’t let it sit big

The solar power industry can be divided into two categories based on technology: silicon crystal and thin film. The current market mainstream is silicon solar cells, which include two types of monocrystalline and polycrystalline, accounting for nearly 90% of the market.

From the perspective of the industry chain, the mainstream silicon solar cell industry can be divided into upstream polysilicon materials, ingots/silicon wafers; midstream solar cells, modules, and downstream system construction; in addition, there are peripheral materials (Including glass, soft substrate, gas, target and electrode materials, etc.) and equipment and other related industries. The United States is encouraged by policies, and more solar energy projects will follow.

Recently, China proposed to control the key equipment and technologies involved in the middle stage of the industrial chain process. To the embarrassment of the United States, the White House passed the “Inflation Reduction Act” (Inflation Reduction Act) in order to “accelerate the decarbonization” process. It requires a large number of cheap solar panels, but it cannot rely too much on China. There are two voices advocating the use of cheap solar panels from China” and “imposing high tariffs to support the local solar industry”.

Analyst: China ensures solar dominance, keeps technology from being stolen

In fact, in the face of increasingly fierce confrontation between the United States and China, China’s continued expansion of the solar industry has already attracted the attention of hawkish politicians in European and American countries. Among them, on December 2, 2022, the U.S. Department of Commerce imposed preliminary sanctions against BYD (Cambodia), Canadian Solar (Thailand), Trina Solar (Thailand), and Vina (a subsidiary of Longji Holdings, Vietnam).

The U.S. Department of Commerce emphasized that Chinese companies assemble in Southeast Asian countries to avoid U.S. countervailing and anti-dumping duties on Chinese-made solar panels. However, research firm TrendForce believes that regardless of the findings, solar panels imported from four Southeast Asian countries before June 6, 2024 and installed before December 2024 can be exempted from tariffs, which means The results of the preliminary ruling have no real impact in the short term.

In addition, in response to China’s revision of export restrictions, Dan Wang, an analyst at the consulting firm GaveKal Dragonomics, told the Wall Street Journal that China’s move is not a countermeasure against the United States, but more like ensuring China’s position in the solar energy field. dominance and disrupt the supply chains of other countries.

Finally, Ilaria Mazzocco, a researcher at the Center for Strategic and International Studies (Center for Strategic and International Studies), a Washington think tank, pointed out that no matter what, China will bring trouble to the United States, and China is becoming more and more closed, opposing the flow of technology and capital. It is destroying their original advantage of “free market” as the core.