Wrong China solar market demand data spooks stock markets

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

Stocks in a large-number of PV companies were heavily sold-off last Friday on the same day erroneous market forecasts for PV demand in China and misinterpretation of recent Chinese Government agencies commitment targets for the sector in 2014 emerged.

Adding to spooked investors' concerns was the earlier announcement regarding the latest investigation by the US International Trade Commission (ITC) into imported Chinese PV products and the use of Taiwanese solar cells.

Bloomberg New Energy Finance (BNEF), on Thursday, 23 January revealed demand in China had “outstripped all expectations in 2013” and cited China’s National Energy Administration’s (NEA) preliminary figures and extrapolated that demand in China reached at least 12GW in 2013.

Yet, BNEF also remarked that when the official figures and its own analysis were completed that figure could have risen to 14GW for the year.

The problem was that BNEF only forecast demand in China in 2014 to be flat (14GW) with its higher range projection.

The 14GW figure for 2014 is actually the same as recently revised guidance given by Chinese Government agencies, which had previously called for 12GW of installations as part of a shift away from ground mounted to distributed commercial rooftop installations.

Importantly, widely cited government plans earlier in 2013 had called for 10GW of installations in 2014 and reiterated plans for 35GW of cumulative installations by the end of 2015.

Therefore the financial markets were taking note of higher than expected growth in 2013 with government guidelines of 10GW in 2014 resulting in a big decline this year or taking uncompleted data from BNEF and NEA on the market at best being flat in 2014, compared to the previous year.

In an effort to provide greater clarity on actual demand in China for 2013, NPD Solarbuzz undertook a renewed analysis of the Chinese market last week and expects a small incremental growth for the country in 2014.

Finlay Colville, vice president of NPD Solarbuzz told PV Tech: “The increase in capacity installed in China during Q4 is taking overall 2013 China PV demand close to the 11.5GW level. As a result, the global 2013 PV figure is now just above 37GW. The PV industry in 2014 remains on track to reach the 49GW forecast by NPD Solarbuzz during December 2013.”

According to NPD Solarbuzz the market in China is expected to reach between 12GW – 14GW in 2014, indicating continued meaningful growth for the year.

According to a research note from Deutsche Bank’s senior analyst, Vishal Shah China had not lowered PV installation plans for this year, after conducting further checks since late last week.

“Our key takeaway is that China is NOT reducing solar targets and is still planning to install 14GW in 2014,” Shah noted in the research note to investors.

Indeed, Deutsche Bank’s analyst was quick to reassure investors on the fact that there was no cap in place by Chinese authorities at the 10GW level for 2014, further highlighting that the NEA statement related to prior targets.

“Project financing, module availability and the provincial approval process have only improved since that timeframe. As such, we see upward bias even to the current 14GW target. As far as current fundamentals are concerned, projects in China are being approved without any specific quota in mind. Importantly, the govt has sufficient funds for anticipated FiT payments for 2014/15 assuming the 35GW target is reached by 2015 timeframe,” added Shah in the investor note. 

23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.
7 March 2022
Take your chance to join the most powerful platform in the MENA region. Middle East Energy (MEE), Intersolar, and ees, the leading energy exhibitions are joining hands to co-deliver an outstanding renewables and energy storage event at Middle East Energy 2021. Renewables and energy storage at MEE is the largest gathering of solar and renewable energy industry professionals in the Middle East & Africa, offering the most effective trade focused platform to international manufacturers and distributors looking to meet regional buyers.
8 March 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 March 2022
When it comes to storage, the US market exceeded a gigawatt of advanced energy storage installations (weighted towards lithium ion) at 1.46 GW, more than the previous six years in total! An exponential growth rate could see the market hit 7.5 GW p.a. by 2025. The summit will provide a wealth of content around this vital piece in the US power puzzle, with sessions dedicated to explore how companies are making money from batteries, the latest chemistries and their applications as they apply to different use-cases. We ask how investors can match ESG criteria to batteries and we will bring case studies of successful deployment and project execution onto the stage to examine how you can ensure your own projects are successful.
29 March 2022
Now in its 10th sell-out year, Large Scale Solar returns to Lisbon in 2022. We are excited to gather together face-to-face with the European solar industry as we provide unique and exclusive access to a powerful selection of the market's key stakeholders. Join this elite summit to find out how the market is maturing, which new markets are becoming more exciting, how technology is evolving and who's driving the market forward into the 2020s. Always senior, packed with developers, EPCs, utilities and investors this is the event for companies serious about European solar PV.
7 April 2022
Solarex Istanbul, Turkey’s first and unique exhibition on solar energy, provides a huge opportunity to Turkey on the way to being a solar energy hub. Solarex Istanbul will take place on 7-9 April 2022 for the 14th time. It will be a commercial platform to have the latest technologies and combination of new products from all around the world. It takes place annually at Istanbul Expo Center, Turkey. It is also called the most important platform for manufacturers, suppliers and dealers of the solar industry in Eurasia.

Read Next

January 28, 2022
Greek industrial group Mytilineos said its renewables and storage unit continues with “full speed” to invest in solar and battery energy storage systems globally following a 2021 that saw the business expand its PV engineering, procurement and construction (EPC) operations.
January 28, 2022
Indian independent power producer (IPP) ReNew Power has sold its 117MW rooftop solar portfolio as part of a strategy to heighten its focus on utility-scale PV.  
January 28, 2022
Global investment in renewables rose to new heights in 2021 as solar and wind deployment surged, but total energy transition expenditure needs to triple in the coming years to get on track for net zero, according to new research from BloombergNEF.
January 28, 2022
LONGi has raised its wafer prices for a second time in just over a month as hopes of falling costs fade and China shuts down for a week for its annual Luna New Year holiday.
January 27, 2022
Renewables owner and operator Brookfield Renewable has tripled its US development pipeline to 31GW through the US$650 million acquisition of clean power developer Urban Grid.
January 27, 2022
Hecate Energy’s first stage application for a 500MW solar PV plant in the state of New York has been accepted by the newly formed New York State Office of Renewable Energy Siting (ORES).

Subscribe to Newsletter

Upcoming Events

Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal
Solar Media Events
April 25, 2022
Berlin, Germany