Korean media: South Korean photovoltaic industry is dominated by China, the industry says "we must revitalize domestic products"

As the sense of crisis that "South Korea's domestic photovoltaic industry ecosystem is collapsing due to being squeezed by Chinese manufacturing" is intensifying, South Korea has finally begun to work on promoting localization. The industry pointed out that relying solely on price competition is no longer sustainable, and it is urgently needed to implement systematic responses to enhance industrial competitiveness at the national level.

"Start revitalizing from inverters"

According to the photovoltaic industry on the 27th, the government and photovoltaic power generation and equipment companies have reached a consensus to reduce the market share of Chinese inverters (over 90%) to below 60%. On the 18th, seven inverter manufacturers (OCI Power, Geumbi Electronics, Dass Tech, Dongyang ENP, DIK, Ecos, Inno Electric) established the first joint response organization, "The Korean Photovoltaic Inverter Industry Association".

Photovoltaic inverters are devices that convert direct current (DC) electricity generated by photovoltaic panels into alternating current (AC) for use in homes, industrial sites, and the grid. If panels are responsible for power generation and energy storage systems regulate supply, then inverters are the last gate that actually converts electricity into "usable electricity" and connects it to the grid, acting as the "brain" of the photovoltaic system that manages power quality, collects and controls operational data.

The association will prioritize the localization of large centralized inverters. Given that the government proposed goals through the "Carbon Neutrality Green Growth Basic Plan" and the "11th Basic Plan for Electricity Supply and Demand", aiming to increase the proportion of renewable energy power generation to about 40% by 2030, with half relying on photovoltaics, expanding 20-100 megawatt (MW)-level large-scale photovoltaic power stations is essential. The larger the power station, the more necessary it is to have large inverters with high single-unit capacity.

Large inverters need to be able to stabilize the conversion of large-scale power and directly connect to the grid, which involves higher technical difficulty. Cooling and stabilization technology that can operate without failure under extreme temperatures, and conversion efficiency that minimizes power loss are also core competitiveness. Conversely, inverters rated at 50 kilowatts (kW) or less are classified as "small (string) inverters," mainly used for small-scale equipment such as building rooftops and parking lots.

According to data from the International Energy Agency (IEA), China accounts for over 80% of the entire photovoltaic supply chain. The industry assesses that inverters are even more than 90% imported from China. Affected by this, many domestic companies have basically given up on self-production and instead engage in "branding distribution," importing Chinese products and selling them at an increased price of about 10%. In response, industry officials emphasized, "It is urgently needed for the government to provide strategic support for the localization of inverters."

Chinese photovoltaic products, "cheap but not good"?

Some opinions point out that if domestic companies choose Chinese inverters for short-term cost savings, it may lead to a decline in operational efficiency and system stability. This is because when a core device fails, if there is no rapid maintenance (AS) system, the power generation loss will be significant. Moreover, considering the characteristics of inverters that collect power generation, load, and grid status data, if safety verification is insufficient, the risk of backdoors (unauthorized access) will increase. In other words, this is not just a simple protection of domestic products, but rather a need to re-examine the issue of using Chinese products from both economic and energy security perspectives. Kim Ji-young (音), a deputy researcher at the Korea Institute of Energy Economics, said, "Although there is an advantage in reducing initial procurement costs, considering long-term operational efficiency and stability, the losses may be greater."

To change the market structure dominated by Chinese products, the government is also accelerating the promotion of localization of the entire photovoltaic core supply chain, including "cell sheets - modules - energy storage systems - inverters." The localization of next-generation high-efficiency solar cells "tandem solar cells" has been included in the "15 Leading Projects of Super Innovative Economy (Third Batch)" and is being promoted for global commercialization. To exclude Chinese energy storage systems, it is likely that the assessment weight of "domestic industry contribution" will be increased in the second public bidding for energy storage systems expected to be conducted by the end of this year. The industry stated, "Once the ecosystem collapses, it cannot be recovered, and now is the last golden opportunity."

Source: JoongAng Daily

Original: www.toutiao.com/article/1850003917990147/

Statement: The article represents the views of the author himself