SNEC: China's PV growth faces challenges

The 8th SNEC PV Power Expo in Shanghai came to an end on Thursday after the three-day offered international attendees a glimpse of China’s fast-growing inverter and equipment manufacturing sector as well as many new domestic module, components and material manufacturers.

Industry veteran Rene Moerman, CEO of consulting company Xilia, described this year’s expo as "booming," not for the number of visitors and exhibitors, but rather in reference to the large number of new players in China that look set to pose serious competition for established European rivals.

Indeed, with the exception of robots, lasers and vacuum coating furnaces, Chinese PV equipment manufacturers now offer almost everything, as was apparent in the crowded E4 exhibition hall at Shanghai`s New International Expo Center, next to the E3 hall, where mainly international equipment makers presented their products.

"If Europe does not develop its solar markets ambitiously and does not enforce an active industry policy, European PV equipment manufacturers will disappear as the European based solar research institutes will do. Because as the development of other sectors shows, the industry follows their clients and the markets," one industry insider told pv magazine.

Impressive was also the growing presence of Chinese inverter manufacturers in the crowded E6 and E7 exhibition halls. Sungrow presented its new 3-phase string inverter S6 50/60 KTL with an efficiency of 99% that begins serial production in June. The manufacturer spends more than 10% of its revenue on research and development and employs an R&D staff of 350, according to Zheng Guibiao, Sungrow vice president and senior Engineer. The company is aiming for ambitious sales of 4 GW worth of inverters in China and 700 MW internationally this year. In 2013, the company sold 3.5 GW of inverters in its domestic market and 350 MW overseas.

Well branded Chinese inverter manufacturers like Huawei also attracted crowds to huge stands alongside many new names and players. Despite the strong Chinese competitors, Werner Palm, managing director of German inverter manufacturer Kostal Solar, expressed confidence that the company would soon gain a foothold in the Chinese market with its own inverter production line and reported high visitor interest at this year’s SNEC.

For many, the confab proved an educational experience, especially in terms of the challenges facing the Chinese PV market, the government policies that are regulating the sector and the positive steps that have already been taken.

One of this year’s main topics of discussion was the challenges posed by the reshaping and stricter implementation of China’s policy for distributed PV. Its goal is to strengthen self-consumption and rooftop installations.

Currently, owners of PV systems receive a base rate of CNY 0.42 ($0.067) per kilowatt hour for the total electricity produced. Surplus solar electricity can also be sold to the utility or to third parties, explained Zhenrui Yu, deputy general manager of Zonergy Solar Technology (ZTE).

Among the problems yet to be solved is the fact that many commercial rooftops in China are not privately owned or in many cases the owners are not registered. Another problem is that engineering, procurement and construction companies, like GD Solar, which is eager to enter this new market, lack security — on average, Chinese factories and companies close down every 2.7 years, says Lennon Zong, GD Solar’s vice general manager.

One possibility to improve the situation would be to pay the PV system operator for the electricity rather than the owner and to create a local state run financial compensation fund in case companies that run PV systems on their rooftops go bankrupt.

For many attendees of this year’s SNEC, it will be exciting to see how Chinese policy makers will finally adapt the program. Otherwise, it could be that only 1 GW of distributed PV power, instead of the ambitious 8 GW target, is installed in the country this year.

While SNEC organizers have yet to release official attendance figures, it was apparent that the confab fell short of previously announced estimates of more than 1,800 exhibitors and 150,000 visitors.