Demand for solar in China could help secure Yingli Solar’s financial future, according to a research note by IHS.
The consultancy noted that Yingli’s poor balance sheet may have hindered its ability to source competitively priced financing for its downstream push but that rising demand in China would assist its efforts. Beijing has set a goal of installing 17.8GW this year compared to around 10GW in 2014.
Yingli warned of doubts over its ability to continue as “a going concern” in its annual report at the end of last week, a risk later downplayed by executives who said it was their responsibility to flag up potential threats that breached a certain threshold of probability. IHS noted that its ill-fated decision to enter the polysilicon market had left it hobbled with hefty interest payments.
“The bad timing of its entry into polysilicon manufacturing greatly contributes to the poor condition of its balance sheet today,” said IHS.
“Whilst Yingli has highlighted a number of significant risks to its ongoing business (largely as a result of decisions made in 2010-11), its strategy to move further downstream could reverse its fortunes particularly as the solar industry recovers further in 2015 and demand remains high in its domestic market,” the IHS note said.
Yingli has connected 261MW of projects leaving it behind its main rivals. Trina Solar expects to connect 700-750MW of projects to the grid this year. With a 1.6GW pipeline in China and a 300MW pipeline overseas, the potential for Yingli to improve its position is clear. It’s path to financing those projects is perhaps less so.
Chinese state-owned solar investor United PV has said it would look to ensure Yingli "pulled through".