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.