BEIJING — China, the world’s biggest maker of solar panels, plans to increase fivefold its installed solar capacity to more than 35 gigawatts by 2015 to support an industry faced with declining profits, slowing exports and a supply glut.
The nation will add 10 gigawatts of solar–power capacity annually over the next three years, according to a statement from the State Council posted on the central government’s website today.
The move will help reduce the industry’s reliance on exports and ease oversupply that contributed to a 20 percent plunge in the average price of solar panels last year, according to data compiled by Bloomberg. China will provide credit support to profitable photovoltaic manufacturers and encourage restructuring and overseas investment, according to the statement, which didn’t specify what period the government will consider to measure profitability.
Risen Energy Co. jumped 10 percent, its daily limit and the most since Feb. 18, to 6.71 yuan in Shenzhen trading. Hareon Solar Technology Co. rose as much as 6.8 percent and traded 4.6 percent higher to 6.49 yuan as of 1:25 p.m. in Shanghai.
“While the Chinese government is determined to boost the domestic market, it is not sufficient to eliminate oversupply,” said Wang Xiaoting, a Beijing-based analyst at Bloomberg New Energy Finance. “Panel prices will stay stable in 2013.”
China will also offer tax breaks to solar companies that acquire others, merge or reorganize their operations, the State Council said. The government encouraged makers of polysilicon, the raw material used to make solar panels, to form partnerships or combine with “advanced chemical enterprises.”
Copyright 2013 Bloomberg
Lead image: Solar panels via Shutterstock