BEIJING: A Chinese solar sector association and the country's industry ministry are proposing reforms to power plant tendering to address plunging equipment prices that have led manufacturers to make losses.
China's solar panel producers have urged government intervention to shore up prices kept low by overcapacity even as China's trading partners have complained about the effects of overproduction on their own domestic industries.
Under the proposed plan, buyers would take non-price factors into account in procuring solar equipment and adopt a more in-depth two-stage tendering system, the China Photovoltaic Industry Association (CPIA) said in a WeChat post late Monday.
The group said it convened a meeting on Aug. 29 that brought together state-owned power producers, such as Huadian Group and Datang Group, and some of the world's largest solar panel manufacturers, including Longi Green Energy.
The meeting was conducted under the auspices of the Ministry of Industry and Information Technology, it added.
The current tendering mechanism is "an important driver of the continuous decline in the price of PV products," the posting said.
Under the proposed new process, bids to supply solar equipment would be evaluated on the basis of factors such as product quality and reliability, technological innovation, as well as environmental and social impacts, including how environmentally sustainable the supply chain is.
CPIA said it would take the lead in creating price and cost indices that could form the basis of the new price mechanism.