(Yicai Global) June 30 -- Chinese solar panel manufacturers, including Longi Green Energy Technology, JA Solar Technology, and JinkoSolar Holding, are expanding production despite signs of overcapacity which have been dragging the prices down to new lows.

The total capacity of China's photovoltaics industry will hit 1,000 gigawatts by December 2024, Li Zhenguo, president of Xi'an-based Longi, said during a trade event in late May. In 2023, capacity should exceed 700 GW, Li added.

Meanwhile, the global demand may be 350 or 400 GW this year so Chinese companies' production alone would cover all demand nearly twice, according to estimates by industry institutions. 

Polysilicon has a severe overcapacity problem, and some manufacturers have decided not to make use of their added capacity, chief executive of a PV firm in Jiangsu province told Yicai Global.

In the second half of this year, prices of photovoltaic equipment may further decline amid output hikes, industry insiders said to Yicai Global. Mainstream prices of units ranged from CNY1.22 to CNY1.37 (17 to 19 US cents) per watt on June 28, whereas in 2022, they used to be over CNY2 per watt.

Despite the signs of overcapacity, Longi Green recently said it will invest CNY12.5 billion (USD1.7 billion) to widen production whereas Tongwei said it will spend CNY10.5 billion. JA Solar and Jinko Solar have announced similar plans.

Some leading PV firms expand to maintain their market position as otherwise they might fall behind, sales manager from a leading company said.

Industry insiders predict that the top ten PV manufacturers will occupy the majority of the market in the future, and others will either become original equipment manufacturers for the big brands or just go under.

Editor: Emmi Laine