Photovoltaic news and pv jobs

China: Government to rescue domestic manufacturers

2012's first and second quarters have seen a major setback in China's manufacturing landscape, with exports falling. Now the Chinese government is stepping in by more than doubling its long-term installation target from 20 to 50 GW by 2020.

The Chinese government is responding to the market situation by more than doubling its long-term installation target from 20 to 50 GW by 2020.

Flickr/Renato Ganoza

IMS Research reports that the patterns in Chinese PV demand and supply indicate that the country's PV suppliers have had to face cutbacks along with the global supplier base in a highly competitive market. The incentive revisions in major markets have also dampened the outlook and performance of Chinese PV players.

Coupled with the on-going trade war, Chinese manufacturers saw a fall in cell production, following the U.S.' decision to impose tariffs on cells from China. Module prices falling by a further seven percent have also put additional pressure on the already narrow profit margins. A large number of polysilicon fabs remain closed, plummeting average polysilicon production utilization below 50 percent in the second quarter of 2012.

Domestic policy as rescue mechanism

Now the Chinese government is throwing in a lifeline. "In an effort to restore confidence amongst its substantial PV supplier base and help meet its phenomenal energy requirements, China has more than doubled its PV installation target to 50 GW by 2020," commented Frank Xie, senior market analyst at IMS Research. "This highly aggressive target could be achieved given the rate of deployment that China has already managed to achieve in the relatively short amount of time since its national FIT was launched, and provides a clear message that China will strongly support its PV industry in the future."

Turnkey MW inverters

The products in the Chinese market are also diversifying. IMS Research says large MW-scale turnkey inverters are forecast to increase their share of the Chinese PV market this year, driven by their highly competitive upfront cost, and ease of installation and maintenance. Xie adds that inverter solutions larger than one MW are forecast to double their share of the market over the next two years. IMS Research further sees China following the European trend and employing more small three-phase inverters in its rooftop segment.

China will be a key market globally and installations are forecast to grow rapidly in the second half of 2012 with over 10 GW installed over the next two years.