A recent research report on ground-mounted power stations revealed a concerning trend: excessively low power prices are creating a vicious cycle. As power generation companies cut costs, the quality of equipment has declined, leading to a market where inferior products are pushing out high-quality ones—often referred to as "bad money driving out good money." This situation is raising alarms among industry experts and investors alike.
Meanwhile, concerns over the quality of domestically-produced auxiliary materials have sparked new discussions. Downstream players in the solar industry are increasingly turning to third-party testing to reassure buyers about the reliability of their photovoltaic power plants. By involving independent laboratories, investors aim to strengthen quality control during procurement and construction, ensuring that only reliable components make it into the final system.
To address these challenges, many companies are accelerating their localization efforts. In March, Zhongtian Technology announced a significant capital injection of 100 million yuan into its subsidiary, Zhongtian Photovoltaic Materials Co., Ltd. The company, formed in partnership with the Solar Backplane Project Team from Shanghai Jiaotong University, focuses on the design, R&D, and production of solar cell backplanes. With a registered capital of 100 million yuan, Zhongtian contributed 70 million in cash, while the university team provided 30 million in technical funding.
The company plans to reach a production capacity of 15 million square meters of backplanes by July 2013, with revenue expected to range between 1 to 2 billion yuan. Over time, it aims to expand to a total of 40 million square meters, generating an output value of 1.6 billion yuan. Similar efforts are being made by other companies like Suzhou Gurong, which recently partnered with Artes Sunshine Power to develop key photovoltaic materials such as positive electrode pastes.
Another player, Yuxing Group, known for polyester film production, is also shifting focus toward specialized solar backing films. Due to oversupply in the solar market, standard backsheet prices have dropped significantly. To counter this, Yuxing is investing in R&D to meet the specific needs of downstream customers and improve overall profit margins.
Interestingly, Zhonglai PV recently became the first domestic company to receive TÜV Rheinland certification for its backsheet, signaling progress in quality assurance. Meanwhile, component manufacturers are beginning to adopt products from emerging auxiliary material suppliers. For instance, Jiangsu Xerav Photovoltaic Systems has started using Fuji Photo Film’s newly launched photovoltaic backsheets in its single- and polycrystalline modules.
Despite these developments, the level of localization in key auxiliary materials remains limited. For example, backplanes are still dominated by global players like Isovoltaic and Taiwan Hong Technology, with domestic companies such as Suzhou Saiwu and Zhonglai only just beginning to make a mark. While they can produce certain quantities, there is still a long way to go before they match the quality and performance of international competitors.
However, the push for localization seems inevitable. Industry reports indicate that competition in the PV auxiliary materials sector hinges on product quality, customer relationships, and pricing. While domestic suppliers may offer cost advantages, proving that their products meet industry standards is crucial for long-term success.
As solar subsidies decline rapidly, there's growing concern about substandard materials entering the market, reinforcing the "bad money drives out good money" phenomenon. Although unqualified products and localization aren't directly linked, the widespread use of domestic materials could raise doubts among power station investors, particularly those with limited risk tolerance.
Market analysts suggest that some investors are now opting for third-party testing to ensure quality control throughout the project lifecycle. Xu Jie, General Manager of Aerospace, believes that such measures can boost investor confidence and attract more capital into the solar power sector. He notes that many current investors operate under BT or BOT models, making large-scale ownership impractical without insurance or guarantee mechanisms. Addressing these concerns remains a critical challenge.
Ultimately, the pressure from the downstream market could be the biggest hurdle for the localization of PV auxiliary materials. But with continued investment, innovation, and quality improvement, the path forward remains promising.Our finger board has mature technology, flat products, and is not easily deformed. It has a complete range of materials, and the manufacturer has an advantage in direct selling prices.
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