Will a new spring for the photovoltaic industry arrive?

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　“The photovoltaic industry is seeing positive developments during the harsh winter. On the 19th, an executive meeting of the State Council approved “5 new policies” to promote the development of photovoltaic energy. Including accelerating industrial structure adjustment and technological progress ； Regulate the order of industrial development ； Actively explore the domestic photovoltaic application market ； Improve support policies ； Reduce **interventions and ban local protectionism. The core idea is to expand the end-market and address overcapacity through elimination and restructuring. “The 5 new policies are highly targeted, and their positive effects are worth looking forward to. 　　As is well known, following the explosive growth in the past few years, investment in new energy sectors such as photovoltaics in our country has declined significantly this year, with overall industry profits dropping rapidly. The \"double anti\" measures imposed by countries such as the United States have further exacerbated the situation for this industry. At present, nearly 90% of polysilicon manufacturers in our country have ceased production, and more than half of the small and medium-sized photovoltaic cell module manufacturers have also stopped operating. It is estimated that China’s exports of photovoltaic products this year will be around 13 billion yuan, representing a decline of over 40% on a year-on-year basis. The outcome is such not only because of the excessive investment by China’s photovoltaic industry, but also as an inevitable result of over-reliance on foreign markets. The problem is that there is already an excess, yet mergers and reorganizations among enterprises do not proceed smoothly, which is of course related to **protection and intervention in certain areas. Therefore, **emphasizing the effective use of the market’s ‘pushback mechanism’ – taking measures to stabilize the market by restricting production capacity and increasing demand – is indeed a targeted approach.** 　　At present, 90% of China’s photovoltaic products are exported; whether it is possible to successfully open up the domestic market is directly related to the revival of the photovoltaic industry. The new policy establishes equal treatment for value-added tax on photovoltaic power generation and that on wind power generation, which will significantly increase the investment returns for photovoltaic power plant projects. Implementing a policy of subsidizing distributed photovoltaic power generation based on the amount of electricity generated, and adjusting the grid connection prices and subsidy levels accordingly to reflect changes in costs, will boost investment enthusiasm on the downstream side; it will also help to utilize the production capacity of component manufacturers on the upstream side. 　　It should be noted that although the policy direction is clear, the key lies in implementation, which requires the timely disbursement of actual funds. To date, a number of policies aimed at supporting the photovoltaic industry have been introduced. However, issues such as multiple sources of regulation, fragmented management, various standards, and bureaucratic delays have resulted in suboptimal implementation of these policies. The top priority is to take advantage of the State Council’s “5 new policies” as an opportunity to categorize and refine relevant policies, clarify responsibilities, and ensure that subsidies, incentives, and grid connection policies are provided in a timely manner. This will enable investors to see tangible benefits and a clear outlook, thereby laying the foundation for the expansion of the domestic photovoltaic market. 　　To limit production and expand demand, in addition to strengthening support and guidance for the end-use of photovoltaic technology, it is even more important to give full play to market mechanisms and address the problem of overcapacity through elimination and restructuring. After all, **subsidies cannot replace free market competition and the principle of survival of the fittest.** Problems in the market must ultimately be resolved by leveraging the power of the market. Only market competition can force companies to accelerate their transformation, and only by establishing a mechanism for the bankruptcy and elimination of outdated and excess production capacity can an industry achieve progress and upgrading. All of this is predicated on defining a proper boundary between **the state and the market. The market must be in its proper place – **no misalignment allowed**. 　　The problem of overcapacity in China’s photovoltaic industry is caused both by capital’s frenzied pursuit of profits and by policies that exacerbate the situation. Under China’s current economic landscape, the allure of high profits and the appeal associated with high-tech industries have made the photovoltaic sector an important tool for attracting investment and expanding investment volumes in various regions. Due to **excessive involvement, it’s easy for everyone to rush in when the market is doing well, but difficult to implement survival of the fittest when the market is poor. As a result, the market mechanism loses its elasticity. In fact, it’s not just the photovoltaic industry that’s like this. This **dominant model of horizontal expansion driven by investment as a catalyst for development, aimed at achieving scale and speed, is common in the industrial development of our country. Thus, we can see that overcapacity is widespread in China, ranging from traditional infrastructure industries such as steel and cement to emerging industries represented by the photovoltaic sector. If this industrial mindset and development model remain unchanged, not only will it be difficult for the photovoltaic industry to learn from past experiences as it moves forward, but China’s overall efforts to eliminate overcapacity and promote industrial upgrading are likely to be undermined as well. For this reason, it is particularly significant that when the Executive Meeting of the State Council introduced the “5 new policies,” it emphasized the need to “give full play to the role of market mechanisms, reduce **interference, and prohibit local protectionism.” 　　Taking advantage of the favorable conditions brought about by the new policies for photovoltaic technology, as long as we make full use of market mechanisms, by strengthening regulatory oversight to prevent reckless expansion while simultaneously expanding the market and encouraging investment in its application, we can shift the focus from pursuing rapid growth to creating a competitive and orderly market environment as well as efficient service and management systems for the healthy development of the photovoltaic industry. This will encourage enterprises to innovate independently, enhance their competitiveness, and accelerate mergers and reorganizations as well as industrial upgrading. After going through the process of natural selection, China’s photovoltaic industry is sure to experience another period of prosperity.