Liu Hanyuan: Polysilicon overcapacity is still debatable

Yesterday, Executive Vice President of New Energy Chamber of Commerce, National Association of Industry and Commerce, and Board Chairman of Tongwei Group, Mr. Liu Hanyuan made incisive predictions for the industry development under current circumstances of upcoming macro-control policy in an interview with reporters:

A.Appropriate Constraint from Industrial policy is a good thing.

In terms of the scale in real sense, China has only 6 years of history. Yet, during the past 3- 5 years, China has basically mastered the production technology. The core technology will be completely mastered with the implementation of next-generation production line. Its output has reached 1/5 of the world s total from none at the inception. In less than 10 years, half or even 70% of the world s polysilicon will be manufactured by China. Yet, the temporary irregularity, pollution and consumption caused by unskillful techniques have negatively affected the public awareness and understanding of the industry. Its trend of development has been undervalued. In the short term, we shall assist the governance and improvement of the Access Policy issued by the State.

B. Overcapacity is still a debatable issue

It is incurrent and unscientific to say there is overcapacity in the PV industry, since it has hardly getting started yet. There are some reasons for the argument of overcapacity: 1. Incomplete understanding of the industry due to its involvement in a number of natural sciences and expertise; 2. Polysilicon industry requires high technology and high automatic control techniques. China had made a lot of attempts in technology research before it could finally successfully master and use the technology on a large scale. Actually, 50% of China s polysilicon for solar cell still depends on import last year.

c. High pollution and emission from polysilicon has become the past.

With new techniques and strict regulations, zero emission can be almost achieved in terms of environmental protection treatment. Furthermore, if the techniques are controlled properly, the input of 1 kwh of electricity for producing polysilicon can result in an uppermost reward of 20-30 kwh during its effective life cycle from polysilicon to solar PV module.

D. It is an industry with the highest investment vs. energy conversion rate.

According to the emission limits regulation by Copenhagen Conference, it will not be a problem anymore to extensively use new energy. The conversion rate of current mature PV power generation can basically reach 15%-20%. It is likely to rise to 30-50% with other techniques of similar principles. Before, for the sector in China, the issue was that the core raw materials and equipment were imported, and the market was all overseas. Now, the only remaining issue is that the market is still at overseas countries. It is expected in the year after the next, China s polysilicon production output will reach 70% of the world s total. If 30%-50% or even higher proportion of the increased energy can be supplied by clean energy, it will result in the biggest domestic industry in China in 2050.

E. Developing the west is of great urgency.

The west cannot simply adopt the development mode of the east. The western regions have vast expanse and abundant solar energy resources. The annual total solar radiation per square meter reaches 3350-8400 MJ with the average arriving at 5860 MJ, which equals to the energy from 199 kg of standard coal. The solar energy China s land surface absorbs each year approximately equals to the energy from 2.4 trillion tons of coal. Especially, Western Tibet has the richest solar energy resources reserve, which reaches as high as 2333 kwh/sqm. It ranks second only to Sahara Desert in Africa. There is over 1 million km2 of existing desertified land in Western China, which is mainly distributed in the northwest and southwest. There is abundant resources and land available to install grid-connected PV power generation system.

Solar PV industry is a promising industry with a big market, wide industry radiation and clear crowding-in effects. Making full use of the solar energy resources in the Midwest region is not only the demand of economic development of western provinces, but also the need of energy balance of the eastern, central and western China.