China's New Energy Standard Knocks Out 43% of Polysilicon Capacity

China published on July 22 mandatory standard GB 29447-2026, which tightens energy consumption limits for polysilicon production and reduces compliant capacity from 3.5 million metric tons per year to under 2 million, according to pv magazine. It takes effect on January 1, 2027.

The standard sets three efficiency tiers measured in kgce/kg (kilograms of standard coal equivalent per kilogram of product). For rod silicon, the dominant process, the minimum Grade 3 threshold to remain operational was set at 6.3 kgce/kg, below the 6.4 figure in the September 2025 draft. For granular silicon, the limit dropped from 5.0 to 4.6 kgce/kg. The text also closes accounting loopholes in the use of external silicon cores and hydrogen, PV Tech reported. For Mexico, Brazil, and Chile, which import the majority of their solar modules from China, a more constrained polysilicon market will put upward pressure on panel costs heading into 2027, as all three countries expand their distributed generation programs and clean energy auctions.

The new Grade 3 represents a significant tightening: the 2025 consultation had projected that 84 percent of capacity would qualify; the final version qualifies only 45 percent. Much of the impact is cushioned by the fact that non-compliant capacity was already idle. Operational production in the first half of 2026 stood at 1.3 million metric tons, according to brokerage estimates cited by pv magazine. Producers can improve compliance through heat recovery and process optimization, the same sources note. The standard is part of a package of three mandatory standards that also set efficiency requirements for wafer cutting (GB 47835-2026) and for modules and inverters (GB 47834-2026). Products that do not reach Grade 3 cannot be manufactured, imported, or sold in China.

The global solar module market is entering a supply-side regulatory adjustment cycle. The date to watch is January 1, 2027, when the standard becomes binding and it becomes clear which producers have completed the required technical upgrades. Polysilicon price trends in the second half of 2026 will provide the first signal of the impact on Latin America's solar projects.

This article was drafted with artificial intelligence assistance from verified sources and reviewed by a human editor before publication.