Solar manufacturer warns of delivery delays or stoppages due to China’s power crisis

A Tier 1 solar module manufacturer has warned customers in an email that energy shortages in China have forced it to reduce or stop production at its Chinese manufacturing sites. The company warned the event will also affect output from its downstream cell and module production facilities in Southeast Asia.

The memo was dated October 4 and was sent by one of the manufacturers’ senior U.S.-based executives. pv magazine USA has asked the executive to confirm the memo’s authenticity and will withhold the company’s name until confirmation is received.

The memo said that in order to recover from the effects of the “potential Force Majeure event,” it may delay or stop equipment delivery or seek to renegotiate contracts to pass  through higher prices.

Rapid growth of domestic power demand in China has been blamed for a national electric power supply shortage. The National Development and Reform Commission of China mandated a “dual control of energy consumption” policy, forcing industries with high energy consumption to reduce or stop production.

The solar manufacturer’s memo said that key solar materials, including aluminum, glass, metallurgical-grade silicon and other commodities “are now in short supply.”

As the winter heating season gets underway, shortages of electricity and raw materials are expected to further intensify, the memo said.

The manufacturer said that it was negotiating with local governments in an effort to reduct the impact of power rationing and maintain normal operations. The company said it expected coal power supply constraints and energy demand to ease in the first half of 2022 allowing industrial production in the affected provinces to resume.