It has almost become a foregone conclusion that China’s solar PV market will see its first year of negative growth in new installed capacity in 2018. Wang Bohua, secretary general of the China Photovoltaic Industry Association, said on different occasions that newly-added PV installed capacity in China will not exceed 45 GW in 2018 due to policy changes, market capacity expansion as well as several variables in the international and domestic markets, down from 53.5 GW in 2017, according to China’s National Energy Administration (NEA). In addition, Wang Sicheng, a researcher at the Energy Research Institute of the National Development and Reform Commission (NDRC) and associate director of the Photovoltaic Committee of China Renewable Energy Society, has expressed a similar opinion. As a result, many research institutions and experts have started to move their own installed capacity forecasts downward for 2018.
Four months ago, if anyone had made the above judgment, it would have been attacked by the whole industry. However, pessimism shrouded the industry from top to bottom after just four months, reversing previous expectations that the sector would continue to grow rapidly.
China installed 9.65 GW of solar PV capacity in the first quarter of 2018, an increase of 22 percent over the prior year period, data from NEA showed. The official breakdown of installations included 7.68 GW of distributed solar capacity, an increase of 217 percent compared to the prior year period. However, industrial insiders revealed that the new installed capacity of 9.65 GW reported for the first quarter includes a significant portion of projects that, in reality, had already been completed by the end of 2017. The installation market is not optimistic with comparatively little construction in progress during the quarter.
In contrast, utility-scale installed capacity declined 64 percent to only 1.97 GW during the quarter, compared to the prior year period. The decline in such installations had already worked through to some of the publically listed companies that are heavily dependent on the utility-scale sector, such as ‘Silicon Module Super League’ member GCL System Integrated, which had warned of losses for the first quarter of 2018, due to a decrease in demand.
To consume the expanding production capacity, looking beyond the country’s borders is the top priority for major PV manufacturers across China, according to an executive from GCL. India is expected to be the best choice due to its macroeconomic environment and market potential. For the first quarter of 2018, India accounted for 27.5 percent of China’s total PV exports of US$2.73 billion, followed by Japan, South Korea, Malaysia, Mexico and Brazil. Europe and the U.S. were not on the list of the top 10 export markets.
Lead image credit: CC0 Creative Commons | Pixabay