(Yicai) June 21 -- China plans to guide production capacity expansion in the photovoltaic industry and prevent unnecessary investments, the National Energy Administration said.

“We’ll reasonably guide the construction and release of upstream production capacity, avoid duplicate construction of low-end production capacity, and strive to create a good market environment,” Li Chuangjun, who directs the NEA’s new energy and renewable energy sources department, said at a press conference yesterday.

The pledge comes after nation’s solar manufacturers asked the government for help as they grapple with a surge in capacity that has driven down the prices of silicon, wafers, cells, and components and squeezed profits, which could lead to bankruptcies in the industry.

“The solar industry will truly bottom out only when many new players in the upstream silicon material segment exit, collapse, or become insolvent because of losses,” said Lan Tianshi, co-chief executive of PV materials giant GCL Technology Holdings.

The NEA will work with other government departments to organize industry groups to release information in a timely manner on the size of capacity, utilization rate, and market demand for each segment to foster a positive market environment, according to Li.

“We’ll also continue to promote the enhancement of PV technologies’ innovation capabilities and strengthen the formulation of related standard systems to facilitate the healthy development of the solar industry, as well as promote the construction of a new energy infrastructure network and improve the grid’s ability to accept, configure, and regulate electricity generated from new energy sources,” Li added.

Furthermore, the NEA will promote the building of large wind and solar power plants in deserts and other relatively uninhabited areas, while encouraging the construction of distributed solar plants on top of factories and residential buildings in a careful and steady manner, Li said.

Editor: Tang Shihua