Chinas rise to the forefront of the global photovoltaic industry has long been predicted. Following the announcement that Chinas regulatory and planning body, NDRC (National Development and Reform Commission), has increased the photovoltaic installation target from 15 to 21 GW by 2015 under Chinas latest Five-Year-Plan, this prediction seems to be fast becoming a reality.
IMS Research, in its latest quarterly report on the photovoltaic supply and demand situation in China, says that module shipments to installations are expected to be more than double those of 2011, when around two GW of new photovoltaic capacity was installed, meaning between five and seven GW could be added this year.
Commenting on the NDRCs target increase, it says, "This positive guideline will further stimulate the rapid growth of Chinas PV market from 2012 to 2015," adding, "With European demand set to shrink from the second half of 2012, Chinas domestic market will become increasingly important."
In addition to a "large" pipeline of ground-mounted utility plants planned for Chinas desert regions, IMS Research predicts that commercial installations will increase by 13 percent this year. Meanwhile, under the countrys Golden Sun Program, it believes one GW of projects will be finished by the end of 2012, and that medium and large commercial rooftop systems will total 850 MW.
Frank Xie, senior PV market analyst and report author, adds, "A more diverse range of system types will emerge in 2012, largely driven by China approving 1.7GW of projects under the Golden Sun Scheme."
He goes on to say that in addition to the opportunities available for photovoltaic system integrators, inverter companies should also enjoy strong growth. "The base of domestic suppliers has grown rapidly in recent years with China now home to over 200 inverter suppliers," he says.
Despite the sunny prospects, IMS Research points out that oversupply is still an issue, with Chinas photovoltaic manufacturers churning out 36.2 GW of crystalline silicon modules in the first quarter of 2012, which is way above the 30.6 GW of new installations expected globally this year.
The research company adds, "Although the outlook for PV demand in China is positive, price erosion is set to continue in 2012 as overcapacity still exists in the polysilicon, wafer, cell and module supply chain. According to the report, in the first quarter of 2012, the average prices of wafers and polysilicon both fell by 11 percent compared to the fourth quarter of 2011, and are forecast to continue falling in the second quarter of 2012."
According to the International Energy Agencys latest latest renewable energy market trends and projections to 2017, China is expected to head the photovoltaics industrys strong growth trajectory, and will add an estimated 32 GW of capacity until 2017.
Overall, it says renewable energy capacity in the country should grow from 303 GW in 2011, to 574 GW in 2017, which would represent "the largest increment in the world." It adds, "Strong policy with ambitious targets underpins the outlook, but institutional approaches to pricing, grid expansion and licensing will act as key variables."
The agency goes on to say that grid integration, as pv magazine has previously reported, is a problem in China. "The scale of existing and planned wind deployment poses challenges for grid planning and upgrades in order to integrate large amounts of variable power. This challenge will increase with large-scale solar PV deployment potentially rising."