solar-panels-in-sunAfter the storm, the calm. China’s solar industry is going through a big shakeout, and consolidation and bankrupcies.

However, this dramatic process or readjstiment is not going to change the Asian giant’s global dominance over the resurgent sector anytime soon, according to Lux Research.

Zhun Ma, Lux Research Analyst and author of a recent report on the sector said:

Enormous oversupply and heavy debt have set Chinese solar manufacturers up for consolidation. The road ahead will be strewn with chaos and uncertainties, but the consolidation will draw a new solar landscape in China that still dominates the global solar industry.”

Since 2005, when Suntech became the first Chinese company to complete an IPO on the NYSE, the country’s solar industry has soared ahead of its rivals in Japan and Europe,  and now accounts for nearly 60% of global production, including nine of the top ten global solar module manufacturers. Chinese firm’s low-cost focus has re-shaped the industry, helping drive solar module prices down 75% since 2007, boosting demand growth – but slashing profit margins, leading to big losses both in China and abroad.

As smaller companies go to the wall, Chinese tier-one manufacturers such as Yingli, Trina, Hanwha SolarOne and Canadian Solar will be able to grab domestic market share as China becomes the world’s largest solar energy consumer market.

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