A week ago today the 9th SNEC trade show closed its doors in Shanghai. Over four days of conference and two-and-half days of trade show around 150,000 people sampled the mood, did deals and shared knowledge in the booming Chinese solar market. pv magazine attended with a team assembling from China, Hong Kong and home-base Germany and identified five key trends.
Unanimous opinion on the SNEC trade show floor was that the Chinese market is hot. With the Chinese government hoping to sign approvals for 17.8 GW of projects in 2015, estimates for the market range from 17 GW to 19 GW for the year. As it matures, the development of downstream PV in China is taking shape in a number of different ways: distributed generation, which in China can mean anything connected to the distribution grid and up to 6 MW; PV power plants in both the east and west of the country; and rooftop PV including in rural communities, where a government program is incentivizing solar rollout, are all notable trends.
Chinese inverter giant Sungrow took out a very large booth space at SNEC. The companys director of PV products Zhao Wei noted that consolidation is evident in the market and at SNEC itself, with some smaller or middle-sized companies not in attendance, while the remaining firms going big with booth sizes.
SNEC has become the worlds largest PV event even though consolidation is evident, said Zhao Wei. On the financial side, Chinese insurance and investment companies are swarming into the PV market.
Prominent too at this years SNEC was the vast number of non-Chinese industry participants also in attendance. From throughout the Asian and Southeast Asian region, to India, Europe and the U.S., it was clear how important the Chinese market has become for all players with global reach or aspirations.
Jenny Chase, lead analyst with Bloomberg New Energy Finance, said that there is little doubt that the Chinese downstream market is growing fast and that while some of the 17.8 GW of targeted approved installations will be installed the following year, that other projects begun in 2014 will be commissioned in 2015, likely to boost the final annual figure.
It was the first SNEC trade show that Ive been to and it was all about the Chinese market, said Chase. Certainly China and the domestic market is really hot and probably the biggest question was which company is going to do a yieldco first?
2: Yielcos are go
While SunEdison, SunPower and First Solar appear to have blazed the trail when it comes to manufacturers launching yieldcos, Chinese manufacturers are not far behind. Canadian Solar, Trina, and GCL are all moving towards yieldcos to spin off Chinese power plant projects and free up capital. Which one of this group will be first to realize Chinas first PV yieldco is yet to be seen, however with pipelines growing fast it is certainly becoming a compelling proposition.
This year Jinko is focusing more strongly on raising capital, perhaps more than in the past, finding funding for downstream projects, said Arturo Herrero, the Chief Strategy Officer at JinkoSolar. So far Jinko has developed more than 600 MW in China and the goal is to reach 1 GW before the yieldco IPO. Jinko may add international projects to the yieldco in time, however the initial focus is on the Chinese portfolio.
3: Fabs outside of China, has it come to this?
Shortly before SNEC, JinkoSolar announced the intention to construct a 500 MW cell and module manufacturing facility in Malaysia this year, to add to its module assembly operations in Portugal and South Africa. And it is clearly not alone.
In the shows wake Trina Solar declared that it will open a 700 MW cell and 500 MW module facility in Thailand, joining a growing number of firms that find Southeast Asia a favorable place to manufacture PV components.It is notable that both cell and module facilities are being established, with previous international manufacturing endeavors by Chinese firms having been largely module assembly operations.
The major driver of this trend is clearly the trade barriers currently in place in both the U.S. and EU markets, affecting Chinese producers competitiveness in these markets.
There is actually 5 GW of module manufacturing capacity owned or controlled by Chinese companies outside of China, said BNEFs Jenny Chase. So manufacturers are quietly making moves, but if there are EU sanctions against Taiwan and Malaysia it makes things a little bit more difficult.
Malaysia currently provides an attractive 10-year tax holiday for solar manufacturers establishing operations in the country, and there are fears among some suppliers that this may raise the ire of trade regulators, or indeed competitors. Chase observes that while such a move would surprise her, stranger things in solar have happened.
Malaysia would describe it as strategic support for an important high-tech industry in the country, said Chase. When the Americans say that, they think it sounds better.
4: Growing efficiency
The strong focus on technology at the SNEC show and conference makes it ideal for technology-forward industry participants. Equipment suppliers from China, Japan, Korea, Europe and North America were all out in force and presenting their latest efficiency boosting technologies.
On the R&D front, the University of New South Wales Martin Green presented his latest results working with tandem cells. Most promising at present, Green reported, is crystalline silicon/perovskite tandem structures, with the band gap between the two semiconductor layers proving most encouraging. Perovskites moisture sensitivity and therefore durability remains a major challenge to commercial application of the technology, however work continues, Green reported.
In terms of commercial production, the trend towards widescale PERC-cell uptake in both mono and multi-crystalline applications was clear.
We see a trend towards higher efficiencies, said Isra Vision/GP Solars Eric Rüland. I feel the Chinese manufacturers have a little bit of pressure on them because they have tended to invested more in capacity rather than in technology. Rüland observed that while multi PERC is developing fast, mono is slowly increasing its market share, given the cost reductions being achieved in mono wafer production.
My feeling is that the growth of mono will continue, so we will have more mono in the future, that is relatively sure, said Rüland.
One of the key drivers of mono wafering cost reductions has been the application of diamond wire technology. Mono producer Longi reported that savings of around 40% can be achieved through employing diamond wire in production, and that by the end of the year it will have the technology installed on all of its lines.
We think that solar technology and this industry is booming, said Longi Chairman Zhong Baoshen. And the mono wafer market is about to start booming as well. The company head also noted that GCL has announced its intention to move into mono production, indicating the technologys promise and increasing uptake.
5: SNEC a major hub
There is little doubt that in 2015 the SNEC trade show has become a crucial hub for the global solar industry. With the stellar growth of the Chinese downstream market, it is now an event that covers all aspects of the solar value chain.
The Chinese market itself appears to be maturing, with discussions of quality becoming increasingly common. This applies not only to an appreciation of quality in manufacturing, but right across transport, installation, BoS and monitoring as well.
That is not to say the price pressures are not intense and Sungrow reported that central inverter prices could fall as much as 20% in China in 2015, a decline that itself may threaten quality.
On the manufacturing front, the wholesale return of equipment suppliers indicates that a new cycle of manufacturing investment is taking place. How long the cycle will last was a topic of debate, but the dire times for the segment of 2012 and 2013 appear behind the industry.
Given the concentration of production equipment and technology providers at SNEC this year it was apparent that it was not only business with Chinese manufacturers that was being done. Indian and North American manufacturers had representatives in attendance and in meetings with tool providers. Prospective players from further afield were also in manufacturing equipment talks.
Much like the Chinese PV market itself, the 9th SNEC was big, brash, loud and busy. Also like the Chinese downstream market, to all intents and purposes, it is here to stay.
pv magazine has assembled 50 Technology Highlights from the SNEC show. You can access a