Chinese PV inverter manufacturers signal tougher market conditions in 1H

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
Sungrow Power Supply Co has guided net profit for the reporting period to have declined by 8% to 18%, compared with the first half of 2018. Image: Sungrow

In recently released first half 2019 financial guidance, three China-based PV inverter manufacturers, Sungrow, Ginlong and Kehua have mainly guided weaker profits than reported for the prior-year period.
 
The weaker profitability is primarily due to the delay in the Chinese government announcing a new PV support mechanisms in the country after abruptly closing down the previous system at the end of May 2018, known as the “531 New Deal”.
 
Only recently, China’s National Energy Administration (NEA) released the result of the first national unified bidding regarding solar PV projects seeking feed-in-tariffs scheduled to be grid-connected by December 31, 2019, which is expected to support around 23GW of PV power plant projects. 

Although the new system is expected to lead to total PV installs in China reaching 38-42GW, compared to previous estimates by AECEA of 32-34GW, the 2019 install forecast could be up to 14% below official install figures achieved in 2018.

With a significant lull in utility-scale PV project completions in the first half of 2019, major PV inverter manufacturer and EPC firm, Sungrow Power Supply Co has guided net profit for the reporting period to have declined by 8% to 18%, compared with the first half of 2018.

PV Tech had previously reported that Sungrow had reported a first-quarter 2019 profit of RMB 171.1 million (US$ 23.3 million), which was at the low-end of guidance and down 15.5% from the first quarter of 2018.

Ningbo Ginlong Solis New Energy Technology Co, which is in its first year of being a public company, has noted that net profits for the reporting period were expected to be 29.84% to 18.15% down from the prior-year period.

The dedicated PV inverter manufacturer cited the delay in the new support mechanism for an overall decline in demand in the first half of the year. However, Ginlong also noted that it had also increased R&D spending in the period, also affecting net profit. 

Power conversion and PV inverter manufacturer, Xiamen Kehua Hengsheng Co, guided net profits to be flat to up 20% in the first half of 2019.
 
However, the potential growth was attributed to its cloud-based business unit. The company is a major partner with Alibaba Group and the cloud-based business generated around US$230 million in revenue in 2018, out of a total of over US$506 million. 

Kehua’ renewable energy business revenue had increased 22.7% in 2018, primarily a result of the development of energy storage products for overseas markets. 

Read Next

April 9, 2021
A draft proposal put forward by China’s National Development and Reform Commission could see subsidies for new solar projects phased out, starting this year.
April 6, 2021
SunPower is to allow Maxeon Solar to the Performance Series (P Series) p-type mono-Passivated Emitter Rear Cell (PERC) shingled PV modules into the US market as part of a major change to initial manufacturing agreements.
April 6, 2021
The International Renewable Energy Agency’s (IRENA) director-general has hailed the start of a “decade of renewables”, following a 2020 that saw China and the US drive global solar installations.
PV Tech Premium
March 30, 2021
In exclusive analysis for PV Tech Premium subscribers, Mark Osborne scrutinises JA Solar's plans to have 40GW of module assembly capacity by the end of this year, and how it reached that capacity.
March 30, 2021
Local authorities in New South Wales, Australia, have given French independent power producer Neoen the green light to develop a large scale solar-plus-storage production facility in the region despite receiving 50 complaints from members of the public.
March 29, 2021
Despite additional solar and wind contributing to a record reduction in global coal generation last year, new renewable energy projects are still not being built quickly enough to keep pace with rising electricity demand.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
April 13, 2021
Solar Media Events
April 20, 2021
Upcoming Webinars
April 28, 2021
4:00 - 4:30 PM CET