Chinese companies are encroaching on South Korea’s solar module market at an alarming pace, reaping benefits from the country’s progressive renewable energy policy.

According to solar PV market research firm InfoLink on Monday, sales of photovoltaic (PV) modules sold by Chinese firms in Korea more than doubled from 342MW in 2018 to 700MW in 2019. In the same period, the Korean PV market grew 32.2 percent from 2,367.2MW to 3,128.8MW. Chinese firms now control 22.4 percent of the local market, up from 14.5 percent a year ago. Their combined sales in 2019 are estimated to reach over 250 billion won ($216 million).

Chinse companies are entering the Korean PV module market aggressively on stronger price competitiveness than their Korean counterparts by setting up local offices or recruiting distributors.

But Chinse solar module companies are blamed for making money without contributing to job creation or market expansion in Korea.

In June 2015, Chinese PV firm CNPV signed a 300-billion won investment deal to build a plant to manufacture solar modules and cells in Korea with a solar power plant. It was the largest investment plan ever made by a Chinese company for the Korean manufacturing sector after the Korea-China free trade agreement in 2015.

Under the deal, CNPV opened a 10MW solar power plant on a 165,000-square meter site in reclaimed Saemangeum soil in 2016. But its plan for a solar module and cell plant was nullified on the pretext of protests from residents.

A local market watcher said the presence of Chinese PV companies in Korea is expanding faster than the growth of the Korean PV market, adding that their market share would increase fast if the current trend is maintained. Nine of the world’s biggest 10 solar power firms in terms of module shipments in 2018 are Chinese firms. Hanwha Solutions is the only Korean company in the list. Of those nine Chinese firms, eight have Korean operations. In contrast, the number of Korean PV companies declined from 123 in 2014 to 102 in 2018.

By Won Ho-sup and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]