Solar module prices set to stabilise on China’s 2015 17.8GW install target - EnergyTrend

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Taiwan-based market research firm EnergyTrend expects PV module pricing to stabilise and production utilisation rates improve after China’s National Energy Administration (NEA) raised the country’s overall PV installation target from 15GW to 17.8GW in 2015. 

Although module ASP declines have moderated significantly in 2014 due to continued growing global demand, overcapacity remains an issue.

According to EnergyTrend, China’s production of PV modules totalled 35GW in 2014, which had the top ten domestic manufacturers account for 56% of total production with capacity utilization rates of close to 90%. 

However, PV module manufacturers in China with less than 500MW of capacity were said to have average production utilization rates as low as 72%.

China’s new 2015 installation target was therefore expected to provide almost immediate relief for manufacturers struggling with anti-dumping duties in the US and Europe that previously had targeted exports in these regions. 

However, EnergyTrend cautions over the longer-term benefits of the raised target as the rapid expansion of PV module manufacturing in China over the last few years has led to products that have varied widely in quality and led to China having some of the lowest module ASPs. 

“The policy’s main beneficiaries will be manufacturers with sound financial health and strong technological advantages,” said Angus Kao, analyst for EnergyTrend, a division of TrendForce. “So the industry will enter its integration stage where only the fittest will survive.” 

Market survey

EnergyTrend said that its current survey of the market and supply chain indicated a high level of inventory overhang in the upstream sector and the reduction of stock is slower than anticipated. 

Module purchasers from Europe and Japan were said to be delaying placing orders and deliveries because of the depreciation of their currencies, thus lowering the number of visible orders. 

The manufacturers in the downstream sector have slowed down their purchases since the start of March, reflecting fewer-than-expected orders at their end of the supply chain.

Most manufacturers were said to be cautious on their assessments for April’s incoming orders, which has led to ASPs along the entire PV supply chain to decline. 
However, Kao expects the stimulus given by NEA’s raised target to kick-start new orders and stabilise ASPS in both the upstream and downstream sectors. 

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