NEW DELHI: China’s unexpected move to slash incentives for solar power has sent stocks into a free fall and prompted analysts to lower forecasts for global installations this year amid expectations that a glut of excess panels would send prices tumbling.

China announced on June 1 changes to the subsidies that has underpinned its rise to become the world’s largest solar market in recent years.

IHS Markit, a market research firm, was preparing to lower its global solar installation forecast for this year by between 5 and 10 gigawatts, or up to 9 per cent, analyst Camron Barati said. The impact in China, which accounts for half the global market, could be up to 17 GW, the firm said.

Another market research firm, Wood Mackenzie, said on Wednesday that China’s capacity additions would likely be about 20 GW lower than it had expected.

An oversupply of cheap Chinese-made panels that had been destined for domestic projects will help boost demand for solar in other countries and sop up some of the demand lost in China, IHS said.

But a drop in prices will leave manufacturers with razor-thin margins as they seek to unload their products.

“There will be a stressful environment for pricing in the near term,” Barati said. “Something like this certainly has global ripples.”

In April, IHS Markit forecast 2018 global installations would hit a record 113 GW, with 53 GW coming from China alone. China is also the world’s largest producer of solar panels.

But the Asian nation last week said it would not build any more solar power stations in 2018 and cut its feed-in tariff subsidy, which guarantees a certain price for power.


Solar investors reacted by selling off stocks. The MAC Global Solar index is down 7 per cent this week. Chinese panel makers Canadian Solar Inc, JinkoSolar Holding Co Ltd and Yingli Green Energy Holding Co Ltd have been hit, as well as US panel makers SunPower Corp and First Solar Inc.
JMP Securities analyst Joe Osha slashed his rating on First Solar shares to “underperform” on Wednesday and cut his price target to $46 from $87.
The Trump administration’s 30 per cent tariffs on solar imports will help support prices in the United States, Osha said, but added that First Solar is seeking to do more business overseas and pricing everywhere could get very competitive.
“No business is insulated from market reality,” he said.
Read more: Global solar forecasts lowered as China cuts...

Waaree Energies, solar power generation, solar power, solar solutions India may be the biggest beneficiary of solar industry reforms in China that are poised to reduce prices for photovoltaic panels.

India may be the biggest beneficiary of solar industry reforms in China that are poised to reduce prices for photovoltaic panels. China announced last week it was halting approvals of some new solar projects this year and cutting subsidies to developers to ease its pace of expansion. That’s expected to slow demand in the world’s biggest market, weakening prices, and force the country’s manufacturers to ship more panels overseas.

Tariffs in India’s next solar auction scheduled for mid-June may fall below the 2.44 rupees per kilowatt hour record set May 17 last year, said Sanjay Sharma, general manager at Solar Energy Corp. of India, the agency responsible for implementing India’s renewable targets. “India will be a big beneficiary of a fall in module prices,” said Vinay Rustagi, managing director at solar research firm Bridge to India. “If China’s demand weakens as expected, module prices should come down dramatically in the second half of the year and into the next.”

India is seeking to boost its clean energy generation as Prime Minister Narendra Modi has pledged to double India’s renewable power capacity to 175 gigawatts by 2022, a target second only to China, as part of his plan to spearhead global efforts to combat climate change. India’s maximum annual solar-cell manufacturing capacity is about 3 gigawatts while average yearly demand is 20 gigawatts, meaning the remainder needs to be procured on the international market, according to a December statement from India’s Ministry of New & Renewable Energy.

The price of modules imported from China is expected to fall at least 10 percent from current levels of $0.31 per watt, according to Sunil Jain, chief executive officer at International Finance Corp.-backed renewable developer Hero Future Energies Ltd. “Cheaper prices may boost installations in countries that see grid parity, like India,” Sebastian Liu, director of investor relations at JinkoSolar Holding Co., the world’s biggest solar panel maker.

Read more: India to benefit most out of China’s solar...

More Articles ...

Translator

SolarQuarter Tweets

Follow Us For Latest Tweets

SolarQuarter E-Mobility Plus June 2018 Issue's Out On Stands! Check the link below: https://t.co/vseR3Bo5w1 https://t.co/9SQw5BZpH1
About 16 hours ago
SolarQuarter Awarding Rooftop Solar Leaders In Gujarat & Rajasthan_Introducing Categories_Nominate Now - https://t.co/iCLOHlQLdA
Monday, 18 June 2018 12:41