According to reports, China has reduced 20 billion watts of solar energy projects this year, the global excess inventory has been further intensified, and the price of solar panels has accelerated. As the world's largest solar energy market, China's new project suspended on June 1 is equivalent to the capacity of 20 nuclear power plants.
 
China’s efforts to reduce its subsidies to the solar industry have caused a further surplus of global panel inventory. Analysts expect that solar module prices will drop to 24 cents per watt at the end of the year, down 35% from a year ago.
The government’s subsidy to the solar industry has weakened, resulting in a drop in global solar panel prices and excess inventory.
 
According to Bloomberg News, China has reduced 20 billion watts of solar energy projects this year, further intensifying the global excess inventory, and the price of solar panels has accelerated. As the world's largest solar energy market, China's new project suspended on June 1 is equivalent to the capacity of 20 nuclear power plants.
 
Since solar energy is a buyer's market, with the global panel oversupply, coupled with delayed purchases by developers in other countries, prices may become lower. The media quoted PVInsights data showing that the average price of polysilicon modules fell by 4.79% since May 30, reaching a record low of 27.8 cents per watt on Wednesday, the largest monthly decline since December 2016. . China produces about 70% of the world's solar modules.
Bloomberg New Energy Analyst Yali Jiang said in a research report on Tuesday that “Chinese and international project developers are lowering orders because modules are getting cheaper.” She predicts that by the end of the year, module prices will drop to 24 per watt. Cents, which is 35% lower than the 37 cents at the end of 2017.
 
On June 1 this year, the National Development and Reform Commission, the Ministry of Finance, and the National Energy Administration jointly issued the "Notice on Related Matters Relating to Photovoltaic Power Generation in 2018," which the industry called "5.31 New Deal." The New Deal called for stoppage of ordinary photovoltaic power plants, strict control of distributed photovoltaic power generation, and lowered the on-grid tariff of newly commissioned projects by 0.05 yuan/kWh, without giving any time for grace, leaving the photovoltaic power generation industry unprepared.
 
In May this year, Hebei Province also announced that it will stop providing subsidies for some new solar power plants in January next year as part of the government’s reduction of support for the industry.
 
According to government data, China is reducing direct subsidies for the solar industry, which has reduced construction and production costs by 90 percent between 2007 and 2017. Although subsidies are gradually being phased out, the government can reduce the burden on renewable energy producers by strengthening purchase agreements with local grids and reducing land costs.
 
As of the end of last year, China’s total solar power generation reached 13 billion kilowatts, a 68% increase from 2016, accounting for 32.4% of the global total.