**Abstract**
Chinese companies, like a group of determined explorers, have entered the wild and vibrant photovoltaic market in Asia and Africa. What kind of efforts and self-sufficiency do they need to succeed? Jia Erying, 58, is currently overwhelmed with work. Between daily meetings and conferences, his schedule is packed, and even his time for breathing is limited.
Jia Erying, who serves as the executive deputy general manager of Jinglong Group, recently returned from the company’s headquarters in Xingtai, Hebei Province. In his office, he shared insights with reporters: "While some domestic enterprises are halting production or even going bankrupt, our production lines at Jinglong are running at full capacity, with orders pouring in."
This full operation isn’t just luck—it’s the result of strategic shifts. Jinglong has been adjusting its market strategy, moving away from traditional European markets toward emerging ones in Asia, the Middle East, and Africa. As a subsidiary of Jinglong Group, JA Solar used to export over 60% of its products to Europe, but that figure has dropped to around 10%. Meanwhile, sales in emerging markets like the Asia-Pacific region have surpassed 50%, marking a significant shift. This change has brought Jia Erying a sense of satisfaction, as tapping into these new markets is becoming a key factor in helping Jinglong recover from the challenges of the global PV industry.
In fact, many Chinese PV companies, including Yingli, Trina Solar, GCL-Poly, and Huihui Sunshine, have made major adjustments to their strategies in response to the current downturn and trade barriers in Europe and the U.S. Domestic PV firms are undergoing a tough period of transformation.
Wu Dacheng, secretary-general of the Photovoltaic Professional Committee at the China Renewable Energy Society, believes that emerging markets represent the future of the PV industry. He pointed out that the U.S., Japan, and China are growing markets worth watching. Additionally, governments in South America, Africa, and Southeast Asia are providing strong support for the solar sector. Particularly in remote areas without electricity, there is an urgent need for power solutions.
A new opportunity seems to be opening up for Chinese PV companies. A wave of solar development into emerging markets is now sweeping through the industry.
The allure of emerging markets has led more Chinese PV companies to turn their attention away from the European market, which is increasingly challenging due to anti-dumping investigations. This marks the end of an era where China's PV industry heavily relied on European demand.
Emerging markets are now seen as the next big hope by many Chinese firms. Beyond China, Japan, and the U.S., regions such as Southeast Asia, Africa, and the Middle East are expected to see rapid growth in installed solar capacity. By 2012, contributions from emerging markets had risen from 2% to nearly 10%.
Take Japan, one of the fastest-growing markets, as an example. From April 2012 to March 2013, Japan added 1.56 GW of new solar capacity, tripling the previous year’s figures. According to Jia Erying, due to the high demand in Japan, Jinglong has also focused on expanding there. “Thanks to the high quality and efficiency of our products, we ranked first in the Japanese market this year,†he said.
In the first quarter of this year, Jinglong sold 100 MW of high-efficiency monocrystalline modules to Japan, exceeding expectations. “Successfully entering the Japanese market not only changed our previous loss situation but also brought substantial profits,†Jia Erying noted. The Japanese market offers higher profit margins and better payment terms compared to other regions.
Beyond Japan, JA Solar also has projects in Iran and Israel. “Previously, five projects signed with Siemens in Israel were located in the Negev and Alava deserts,†Jia Erying explained. These areas are rich in sunlight, ideal for solar power generation, but require highly durable and efficient components. To support its expansion, Jinglong has established four international sales teams—Europe, Asia-Pacific, Americas, and Middle East & Africa.
Another major player, Artes, is also increasing its presence in emerging markets. Its sales in these regions have surpassed those in Europe this year. According to Artes’ quarterly report, module shipments reached $263 million, with 57.4% coming from Asia and less than 25% from Europe. Artes credits its success to the booming Japanese market and is gradually shifting its focus toward Southeast Asia, South America, and South Africa.
Indeed, all Chinese PV companies are actively expanding into emerging markets. GCL-Poly is targeting the Thai market and investing in solar projects there; Nanjing CLP focuses on Bulgaria and India; Chint Solar exports about 15% of its products to Southeast Asia; and Suntech has localized production plants in Poland, South Africa, and India.
Analysts predict that by 2017, demand for photovoltaics in emerging markets across Asia-Pacific and Central Asia will exceed 3 GW, with rapid growth expected over the next five years. Sun Haiyan, president of Trina Solar’s Asia-Pacific, Middle East, and Africa division, forecasts explosive growth in the region, expecting it to triple in size over the next two years.
At the same time, countries like Brazil, Chile, South Africa, and Saudi Arabia are becoming hotspots for investment due to improved internet access, lighting, and economic development. Emerging markets are quickly becoming a major opportunity for Chinese PV companies.
However, despite the optimism, entering these markets is far from easy. For instance, Chint Solar faced challenges in India due to cultural issues. A 24 MW thin-film project was delayed because locals considered trees sacred and refused to cut them down. Luchuan, vice president of Zhengtai Solar, emphasized that solar projects are long-term investments requiring careful risk assessment.
Zou Xiyuan, COO of GCL-Poly, noted that the Indian market is not just about religious issues but also policy restrictions. Local companies prefer cheaper products, leading to intense competition. Payment delays are also a concern, creating pressure on foreign firms.
Japan also presents high entry barriers. Before entering the market, companies must pass complex certifications, such as residential solar system and module certifications. Many are excluded before even starting. An Zeng, deputy GM of Jinglong, explained that Japan’s small land area limits large-scale ground installations, favoring rooftop systems. This requires higher efficiency per unit area and stricter performance standards.
Even in Southeast Asia, Africa, and the Middle East, entering these markets smoothly is challenging. While these regions offer excellent solar conditions, they also face issues like extreme temperatures, dust, and bureaucratic hurdles. Projects often rely on tenders, with governments favoring local products, complicating foreign participation.
Moreover, fragile grid infrastructure, lack of financing, and frequent project delays pose additional challenges for Chinese developers.
Despite these difficulties, the potential remains high. However, the market is already becoming saturated. Analysts warn that while India and Japan may absorb some supply, most emerging markets are not yet ready to handle a flood of Chinese PV modules. This could lead to oversupply and fierce competition.
For example, in Japan, Chinese shipments accounted for about 40% of the market in Q1 2013. It is predicted that by 2014, the Japanese market will become self-sufficient, making it harder for Chinese companies to maintain their share. High entry barriers mean only a few top-tier companies can truly benefit.
Zou Xiyuan raised concerns about the rapid influx of Chinese modules into Japan and whether the government might tighten policies in the future. He believes that large-scale imports could cause tensions and potentially trigger trade protectionist measures similar to those in Europe.
An Zeng, however, remains optimistic about Jinglong’s position in Japan. Despite higher prices, he believes quality will win the market. With Japanese PV module prices 10-20% higher than Chinese ones, Jinglong’s products remain competitive.
After the Fukushima nuclear disaster, Japan has shifted focus toward renewables, with solar playing a key role. Jinglong’s joint venture with Matsushita Semiconductor in Japan has helped build strong internal capabilities, giving it a competitive edge.
For Chinese companies, the question remains: Can emerging markets truly replace the US and European markets without triggering policy crackdowns?
To overcome these challenges, some experts suggest a "going out" strategy, where companies set up factories overseas to gain deeper market access and better support in tariffs and loans. However, this approach comes with risks, especially for smaller firms.
Industry experts recommend a collaborative "team-up" model, where companies work together to distribute profits, leverage resources, and create a more sustainable industry chain. Zou Xiyuan supports this idea, noting that many companies are already forming virtual partnerships to maximize strengths.
Anzeng, on the other hand, emphasizes internal development. He believes financing is crucial for overseas expansion. He suggests the government establish a solar fund with medium- to long-term plans to support viable companies.
Ultimately, the road ahead for Chinese PV companies is challenging but filled with opportunities. Whether they can navigate the complexities of emerging markets and avoid policy pitfalls will determine their long-term success.
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