REC - China: 2018 installations could drop by more than a third


China: 2018 installations could drop by more than a third

On Friday, three Chinese government ministries issued a joint “2018 Solar PV Power Generation Notice.” Its impact has been hotly debated since, with two key conclusions: the largest market segment – utility-scale PV – will take a pounding and not come close to last year’s record installation figure of just under 34 GW; and the expanding distributed generation market segment, which rose 360% from 2016 to 2017, will also be severely impacted by a 10 GW cap on new projects.

JUNE 4, 2018 ECKHART GOURAS

Bullish predictions about the Chinese PV market, made at a record-busting SNEC show, may prove to have been over optimistic.

According to a briefing paper released by the Asia Europe Clean Energy (Solar) Advisory Co. Ltd. (AECEA) over the weekend, Friday’s public policy notice abolished the 13.9 GW target established by China’s National Energy Administration (NEA) for utility-scale projects in 2018. Beijing’s policy update also instructs China’s provinces to stop further projects seeking 2018 FITs in any form. According to AECEA: “Taking into account that last year, utility-scale projects amounted to approximately 33.62 GW, this rather drastic measure will undoubtedly not only slow down demand for the remainder of the year, but for the remaining period of the 13th Five Year Plan as well.”

Just last week in Shanghai at SNEC – the world’s largest PV event – IHS Markit gave a much more bullish assessment for this year, and the next four years, at its 2018 PV Market Workshop. According to the IHS analysts, this year would match 2017’s record 53 GW of installations and the next four years would feature annual installation rates in the 50-60 GW range. The mood at SNEC was upbeat, with a record number of visitors and exhibitors in attendance.

At the workshop IHS Markit did caution however, that there were conflicting forecasts related to the Chinese market. The analysts said optimists are predicting another blow-out year – to the tune of 55-60 GW – but another camp, the pessimists, see only 35-45 GW being added in 2018. The latest policy update from Beijing makes even that pessimistic view now appear optimistic. AECEA has cut its forecast from 40-45 GW to 30-35 GW and regards even the lower range as “still optimistic” in its latest briefing paper. As a result, this year’s market could decline by more than a third on last year’s 53 GW.

And the latest notice from Beijing is not restricting its aim to the utility-scale segment. Last year’s poster child – distributed generation (DG) – will be hit hard by a 10 GW cap. AECEA estimates it “highly likely” the 10 GW DG installation mark was already reached at the end of last month. The weekend notice calls for “DG projects not realized by the central government to seek financial support from respective local governments”, as Beijing looks to its local authorities to do the heavy lifting and provide the needed subsidies to keep the market segment alive. Whether local government will step up to the plate remains uncertain, and this type of localism will make it harder to find suitable locations for DG systems.

One bright spot from Friday’s notice is that at least it does not seem to curtail residential PV. According to AECEA this market segment – which only produced around 2 GW of installations in 2017 – could yield up to 5 GW this year. However compared to the 2017 DG total of 19.44 GW, that is a small contribution to the overall distributed market.

Why has Beijing taken fright? AECEA’s analysis points to booming national FIT payments after the 53 GW installed last year. Like most of the forecasters, Beijing was caught by surprise by the record-breaking installation figure – although operators in the world’s mature markets will surely have indulged in a wry smile at the thought of China’s central government scrambling to back down from too-generous FITs.

Paradoxically, China’s ability to reduce curtailment by half, vis-à-vis 2016, made matters worse for the central government. Less curtailment means more PV power being added to the grid, which in turn increases the FIT payments PV plant owners can demand from central government. At the end of last year, outstanding FIT payments amounted to approximately €15 billion ($17.59bn), according to estimates collected by AECEA.

Obviously, such a sharp reduction in demand in China will impact PV markets around the world, as it will exacerbate over-supply in the world’s biggest PV manufacturing marketplace – whether in polysilicon, ingots, wafers, cells or modules. The policy handbrake will accelerate consolidation among PV manufacturers – something Beijing has been pushing for, notably through the introduction of the Top Runner program, which the latest policy updates will not affect. As a result, one way to interpret Friday’s bombshell notice is that it represents another important measure to foster industry consolidation and build national champions who can excel at home and overseas.

https://www.pv-magazine.com/2018/06/04/china-2018-installations-could-drop-by-more-than-a-third/
Sa2ri
08.06.2018 kl 16:20 3488

What China’s subsidy pull-back means for U.S. solar (part 1)

A flood of cheap solar panels is likely to partially offset the effect of the Section 201 duties. It may also mean the revival of projects with marginal economics and could lead to module supply contracts being renegotiated.

JUNE 7, 2018 CHRISTIAN ROSELUND

Since the surprise announcement last week by the Chinese government that it would make multiple unfavorable changes for the compensation of solar projects, analysts have been scrambling to determine how this move by the world’s largest solar market will affect other markets around the globe.

The United States is no exception. And, while there are still many unknowns, a few things are certain. The Chinese market will contract, leading to oversupply. In the highly liquid global solar panel market, prices will fall and, while BNEF has put out a figure of 34% declines over the course of 2018, other some analysts are reticent to put numbers on this.

For the U.S. solar market, which has been impacted by import duties under the Section 201 process, this is good news. For U.S. manufacturers – including those who are building or buying factories – it is not.

https://pv-magazine-usa.com/2018/06/07/what-chinas-subsidy-pull-back-means-for-u-s-solar-part-1/
Redigert 08.06.2018 kl 16:21 Du må logge inn for å svare
Sa2ri
08.06.2018 kl 16:21 3475

What China’s subsidy pull-back means for U.S. solar (part 2): manufacturing

Global oversupply and a collapse in module prices is not good news for manufacturers. But the details are always more complex, and many of the factories planned for the United States appear to be staying the course.

JUNE 8, 2018 CHRISTIAN ROSELUND

In part one of our coverage, we explored how the pending global oversupply of modules which is expected due to changes in China’s subsidies for solar could affect the U.S. downstream market. The short answer is that this is great news for project developers and could revive some of the projects that were sidelined due to the Section 201 tariffs.

However, the outlook for manufacturing is not so good. And this comes at a difficult time for a number of companies that were planning to either buy or build solar factories in the United States.

But not every aspect of this global fall in prices will necessarily be bad for cell and module makers. And as always the details are more complicated.

https://pv-magazine-usa.com/2018/06/08/what-chinas-subsidy-pull-back-means-for-u-s-solar-part-2-manufacturing/
Solguden
08.06.2018 kl 16:48 3364

Orker ikke lese alt ,men du poster bare kun det negative om dagen så regner med det er negativt.
Sa2ri
08.06.2018 kl 16:59 3332

Trodde du var interessert i billigere aksjer?!

Jeg lager ikke nyhetene, jeg formidler dem når jeg mener de har relevans for REC. Dersom det er positive nyheter der ute har jeg nok dessverre ikke funnet mange av dem den siste tiden.

God helg!
Solguden
08.06.2018 kl 17:45 3266

Nei du finner nok dem positive nyhetene når du snart kjøper deg inn. Ja jeg ønsker billigsalg, men driver ikke med bevisst baissing og haussing av den grunn.Noe holder man seg for god til .
Sa2ri
14.06.2018 kl 18:26 2851

2018 global PV market to see negative growth following China backtrack

Global solar PV demand this year will be less than in 2017, on the back of China’s latest policy decision, says TrendForce. Overall, it sees new installs dropping 40% in China to 31.6 GW. The protectionist measures taken by the U.S. will also be weakened by the resulting falling module prices.

JUNE 14, 2018 BECKY BEETZ

It looks like we're in for another bumpy solarcoaster ride this year.

Make an abrupt change, and there will be abrupt consequences. It’s commonsense. That’s why it is no surprise that, on the back of China’s recent announcement to put the immediate brakes on its PV industry charge, overcapacity looms, prices are set to free fall, and 2018 global demand is on track to decline.

In the latest analysis released, Taiwan-based TrendForce estimates that negative growth will be recorded this year – around 5-8% – to fall to 92 to 95 GW. This compares to the 98 to 99 GW that were installed in 2017.

This forecast is more bleak than both IHS Markit’s – which revised its expectations down from 113 GW to 105 GW – and SolarPower Europe’s, which expects to see 102 rather than 107 GW this year.

In China, meanwhile, TrendForce says installations will drop 40%, to 31.6 GW. There is expected to be an installation rush ahead of the June 30 deadline, where those plants connected to the grid will still receive the 2017 FIT. “But only ongoing projects, which are in the stock-up and development phases, will be able to grid-connect in time successfully,” said the analysts.

Demand in Q3 is set to be “considerably slashed” on the back of the new regulations, although a rebound is anticipated in Q4, due to the Top Runner program, which has not yet been affected by the changes, and poverty alleviation projects.

Under the Top Runner program, a quota of 32 GW has been allocated between 2017 and 2020. TrendForce said this may not be completely implemented, but that the government will attempt to execute as much as possible since it “attaches great importance to the program”.

Next year – 2019 – is expected to bring with it not just global installs of over 100 GW as new markets are attracted by the falling module prices, but also an increase in unsubsidized projects in China. Indeed, the Taiwanese analysts believe the central government will encourage its local counterparts to support the industry based on their policies.

“This will improve the problem of insufficient subsidy and make the companies more competitive in the market,” said TrendForce.

It added, “As the bids for Top Runner Program have lower prices for FiT rates and modules, grid-parity may be realized earlier than expected. Coupled with electricity trading and trade of green energy certificate, more unsubsidized projects are expected to appear in 2019.”

Regarding distributed generation (DG) projects, TrendForce expects the 10 GW quota to be used up soon, consequently the June 30 deadline will not create much demand.

However, the “detailed regulation” for these types of systems is expected to “significantly affect demand” between the second half of this year and 2020. “Provinces with greater penitential to develop DG systems will be more favorable,” it said.

Confirming predictions last year that installs in China will veer away from utility-scale, which until now has been the dominant sector, Q1 2018 saw a massive increase in DG: of the 9.65 GW of PV installed, 7.68 GW comprised DG systems, reported China’s National Energy Administration (NEA) in April.

Weakening protectionism

In addition to creating an oversupply situation, and lowering PV module prices, China’s latest decision will also serve to push domestic suppliers to enter other, overseas markets. This will have the knock-on effect of lowering global average selling prices (ASPs) and, thus, weakening the tariffs imposed under the Section 201 trade case.

“The tariff listed in Section 201 will be reduced to 25% in 2019. At that time, the imported modules will have lower prices than those traded in the U.S. market even with the 25% tariff, which will make the imported modules more competitive in the U.S. market,” said the analysts.

History repeating itself?

2011 was a devastating year for the global solar PV industry (it was also the year that China first unveiled a FIT, and the year the first trade wars began, in the U.S.).

FIT uncertainty spread across Europe, particularly in Italy, the Czech Republic, Germany, France and Slovakia, which, in addition to the impact of the Spanish market crash, spurred freefalling module prices – around 22% in Europe and Japan, and 30% in China.

This did not, however, trigger the expected higher demand, due to (i) higher project financing; and (ii) buyers waiting for further price drops.

Last week, Bloomberg New Energy Finance said it expects to see a 34% decline in multicrystalline solar module prices in China, which would be roughly equivalent to the fall in module prices in 2016 and 2011. As China is the largest solar market, this drop will, of course, spread out, and affect other markets.

Polysilicon prices for multi are expected to be most significantly affected, having fallen from around to 125 RMB/kg (around US$19.5) in April, to an estimated 105 RMB in June. They are set to fall further to 95 RMB by the end of this year, and to around 87 RMB by next June.

For multi wafers, prices are set to drop from just under 3.80 RMB in April, to just under 2.30 RMB (around US$0.36) next June, and for modules between 270-275W, from 2.50 RMB to around 1.60 RMB (around US$0.25).

As happened last year, when China blew the socks off the global PV industry with its unanticipated high levels of new installations, it will be interesting to see what the rest of the year brings.

Abrupt changes do not lay down the foundations for a sustainable strategy and predictable path forward, but one can only hope that some lessons were learned from 2011.

https://www.pv-magazine.com/2018/06/14/2018-global-pv-market-to-see-negative-growth-following-china-backtrack/
P_Invest
14.06.2018 kl 18:31 2829

Sol kommer til å vokse mye fremover, uavhengig av vedlagt artikkel. Så legg rec i skuffa og glem Sa2ri som ønsker billigere rec aksjer :)
Sa2ri
14.06.2018 kl 18:33 2817

@P_Invest:

Nok en gang - jeg lager ikke nyhetene - jeg deler dem.

Safari og alle hans med kompanioner prøver ihærdigt og sænke REC for egen vindings skyld... Trætende og kikke på HO ... Slut prut finale !!! Farvel !!!!
Redigert 14.06.2018 kl 18:44 Du må logge inn for å svare
Solguden
14.06.2018 kl 19:01 2751

Nå må dere gi dere han har helt rett. SB1M er også ute med en oppdatert analyse på REC i dag på 80 øre. Shorten øker kraftig, sil prisene faller som uvær osvosv. Er dere blinde ser dere ikke hvor denne blir styrt til 80 øre eller lavere??. Ikke på tale med ned snitt her jeg skal ha kraftig rabatt.
Sa2ri
14.06.2018 kl 19:06 2738

@blochster:

Så det er kun "gode" nyheter som ønskes publisert på forumet? Det ser ikke veldig bra ut for REC akkurat nå (min mening), men alle får gjøre sin vurdering av caset og posisjonere seg deretter.

Hvis det finnes gode nyheter er det jo bare å dele slik at alle får den samme informasjonen.
Redigert 14.06.2018 kl 19:21 Du må logge inn for å svare

Dersom man mener det ikke er hold i det som blir lagt frem så er det vel bare til å kjøpe med begge hender og ta imot med takk..

Jar selv ett snitt godt under dagens sluttkurs men sutrer ikke av dem grunn.

Mente over...
Redigert 14.06.2018 kl 19:23 Du må logge inn for å svare
bokaj70
14.06.2018 kl 19:24 2677

Vil I helt seriøst mene, at I ikke finder sådanne nyheder interessante, når I er aktionærer i REC??


Du vet, her inne er det en merkelig blanding av folk fra pinsemenigheten og agnostikere.

He He, tro håp og ingen mening Hmm, hva med sykelig in love da?

Hvor raskt vil REC merke når prisene på PV dropper fra uke til uke. Slik det fremstilles her virker det som om TT og JUM står med kassa apparatet utenfor lagrene og tar i mot cash og taper penger 2 minutter etter at prisene oppdateres... Det må da være noe treghet og avtalt pris her - og ikke absolutt og maksimum tap hver gang. Her males det kun med sort - minst 3 strøk. Let the sun shine.

Rec guidet en pris rundt 11.6 for 2018 som helhet så ikke så galt som det ser ut til egentlig..

Var samme gnålet om Kina kutt i fjor og året før der og året før der .. Djeezuz ! Selvfølglig vil ikke Kina bremse installasjonstakten.. skal de sette ansatte på porten og stenge ned liksom? Alle som har vært innom Kina de siste årene har jo fått med seg at det er knapt med ren luft...Det haster med å få fornybare energikilder på plass..
Redigert 14.06.2018 kl 22:54 Du må logge inn for å svare
halvpris
14.06.2018 kl 22:54 2294

Solar USA sterk avslutning i kveld...

Takk for veldig god info Sa2ri. Alle andre skriver jo stort sett tull og tøys. I dag kjøpte jeg litt på 1.02. Tror nok den skal litt videre nedover. Men det er jo umulig å treffe bunnen. Akkurat nå ser det jo ganske mørkt ut for Silisiums-biten av REC, og det er vel derfor aksjen hamres ned. Men det er nå man skal kjøpe er det ikke? For selv om instalasjon av wafere og priser på disse faller midlertidig, så er det jo etterspørselen på sikt, som burde bestemme prisen på REC, og den er vel strengt tatt den samme som før. Eller bedre! Fordi lavere priser betyr at solkraft blir et stadig bedre alternativ!

Hvordan vil dette påvirke REC tenker du?