Zhejiang Ming Jewellery, a Chinese metals and jewellery company listed in Shenzhen with a market capitalisation of Rmb4.2bn ($615.3m), has signalled it is entering the solar market as a raft of non-specialist players rush into cell production.  

On February 3, Zhejiang Ming Jewellery signed a partnership agreement with the Shaoxing Keqiao Economic and Technological Development Zone to invest Rmb10bn in a solar cell production facility.

The company said in a statement that it plans on investing in a “super factory”, which in the first instance will produce 10-gigawatt (GW) capacity of tunnel oxide passivated contact (TOPCon) solar cells, a type of highly efficient next-generation solar photovoltaic (PV) cells. In a second phase, the facility will produce 6GW of TOPCon cells and 4GW of heterojunction (HJT) cells, another type of high-efficiency solar cell technology. The overall site is expected to span roughly 253 square kilometres. The investment in fixed assets is slated to be Rmb6.5bn.

Yun Sun, senior fellow at the Stimson Centre, a Washington-based think tank, tells fDi that Zhejiang Ming Jewellery “isn’t the first and won’t be the last”.

“A number of companies that have had nothing to do with solar have been swarming into the [sector] convinced of its profitability,” she explains. “The essential reason is that their traditional businesses are no longer rendering the profitability that these companies would like to see.” 

The latest investment follows announcements from other companies making inroads into solar cell production. In January, Shijing Environmental Technology, a pollution control company, announced it will invest up to Rmb11.2bn in a similar high-efficiency solar cell production project in the neighbouring province of Anhui. One company, Jiawei New Energy, revealed in its development plan in April last year that it will focus entirely on solar PV cell production, as it nixes lithium battery manufacturing. 

“These companies have moved to identify new areas that can boost growth, such as renewable energy, and solar is seen as the top candidate,” Ms Sun says, while other options for entry into renewables, like hydropower or batteries, are either more costly or suffer from a limited supply of raw materials, like lithium.

In its half-year annual report, Zhejiang Ming Jewellery recorded a 90% fall in its net profits for the first six months of 2022, compared to the same period the previous year. 

China’s solar PV installed capacity increased from 3.1GW in 2012 to 253.8GW in 2021, according to the International Renewable Energy Agency. With a target to hit peak carbon emissions by 2030, the Chinese government continues to be bullish on renewable energy, as outlined in its 14th Five-Year-Plan. 

Globally, solar PV capacity is set to almost triple over the 2022–2027 period, surpassing coal and becoming the largest source of power capacity in the world, the International Energy Agency estimated in December. 

Ilaria Mazzocco, senior fellow and trustee chair in Chinese Business and Economics at the Center for Strategic and International Studies, points out that Chinese solar is already globally competitive, making entry difficult for new players. But with the pressure to move to higher efficiency, that could change.

“We would never have thought a few years ago the top five Chinese solar energy producers would change,” she says. “But as more investment goes into research and development and efficiency, new players might emerge.”  

As domestic companies jump on the bandwagon, there has been little sign that foreign investors, even those with an eye on China as it re-opens, are likely to follow suit.

“Foreign investors might want to be even more cautious. Even if solar has government support, unless they have technology or something the Chinese don’t already have, they’ll already be behind the curve [in entering the Chinese market],” Ms Sun says.