Foreign PV module manufacturers may not get a look-in on the closed Chinese downstream market but balance-of-system (BOS) suppliers could find the market lucrative, according to a report from NPD Solarbuzz.
The BOS market in China is set to boom on the back of more than 7GW of installations expected in 2013. The ground-mounted segment would continue to dominate PV demand in China with a market share of 57% this year. This continues to be driven by large-scale commercial and utility projects in the Northwest region, according to the market research firm.
“Previously, the supply of balance-of-systems components to the Chinese end-market was dominated by domestic inverter and mounting component suppliers,” said Steven Han, Analyst at NPD Solarbuzz. “However, with revenues projected to grow to CNY25 billion by 2017, the Chinese end-market will soon offer the most lucrative opportunities for global balance-of-systems suppliers.”
The NPD Solarbuzz China Balance of Systems Market Report is forecasting a BOS market value of US$3.1 billion in 2013, while the served addressable market is expected to reach RNB5 billion by 2017. Not surprisingly the PV inverter segment is expected to provide the greatest revenue opportunity for BOS suppliers.
Indeed, with the greater emphasis on utility-scale and commercial PV projects, PV inverter power ratings above 250kW are expected to account for more than 50% of sales.
However, competition will remain tough as the market research firm noted that over 100 new PV inverter suppliers have emerged within the Chinese market in the last few years.
However, outside of China, Western world specialist PV inverter firms have dominated the 250kW market and above on technical and quality grounds.
The market research firm also expects mounting and tracker systems revenue to exceed CNY 3 billion in 2013, while fixed tilt-angle mounting systems would collect 90% of those revenues. Revenues from one-axis and two-axis trackers are forecast to increase at a 16.9% CAGR until 2017, NPD Solarbuzz noted.
“The competitive landscape is set to change, with Chinese balance-of-systems suppliers having to adapt to rapidly declining prices while addressing new and emerging threats from both domestic and overseas suppliers,” added Han.
Han also noted that overseas PV inverter suppliers were already forging partnerships and supply agreements with domestic companies to gain access to China’s PV systems market. Recently SMA acquired a majority stake in a small China-based inverter firm as it attempts to compensate for softening PV demand growth in its key European markets. Other European inverter manufacturers are dealing with the same issues.
“Understanding system installation types and component supply chains across China has become essential for any balance-of-systems supplier looking for 2013 revenues. With a project pipeline in excess of 35GW, hundreds of PV opportunities are yet to finalise their choice of balance-of-systems suppliers,” concluded Han.