Roth analysts believe that the details revealed by Chinas National Energy Administration (NEA) regarding its increased solar goals are a positive sign for the industry. In a note issued today, Roth concludes that, there could be more upside potential to deployment expectations given the upcoming 13th Five Year Plan.
Looking towards the next Five Year Plan, Roth concludes that concludes that Chinas goal of 100 GW of installed PV capacity by 2020 could be increased to 135 GW 150 GW, leading to annual demand of 18 GW or 21 GW p.a. respectively. The analysts describe this as, positive tailwind for the sector, despite the low margin environment for module vendors.
Roth interprets the lack of specific targets for utility scale and distributed generation (DG) capacity as being a positive sign, due to the challenges in realizing large volumes of DG in a short period of time. The Roth notes sites DG challenges as being: landlord vs. tenants, rooftop rights, financing, etc.
The NEA has provided specific provisional targets for capacity allocation under the expanded 17.8 GW 2015 target. The Roth analysis sets out that provinces will have to allocate target quotas by April of this year or have the remaining amount shifted to other provinces. Provinces that have been expeditious in allocated solar quotas could see theirs increased in July 2015. A review will be conducted by October, and if the grid connected capacity is found to be below 50% of the specific provinces quota, then a province may see its 2016 allocation reduced.
Roth assembled the NEA provincial data in the table below. Philip Shen and Justin Clare compiled the analysis.