EnergyTrend, a division of market intelligence provider TrendForce, has reported that India has now replaced the UK as one of the top three export markets for Chinese solar modules. The other two export markets are the U.S. and Japan. The Indian solar market is expected to grow exponentially. pv magazine reported that a Deutsche Bank markets research report adjusted its solar power forecast prognosis for India to 34 GW by 2020, an increase of about 240% from its previous estimation of 14 GW.
On the production side, both tier 1 and 2 cell and module manufacturers are expected to be operating at full capacity with support from the PV markets in China, Japan, India and the U.S. Corrine Lin, analyst for EnergyTrend, stated that the second half of 2015 will see the global PV market being driven by strong demand from these countries.
Location for module companies will change though. As a result of the ongoing PV trade disputes, China and Taiwan will be passed over and companies will prefer to be nearer emerging markets. Hence production relocation or capacity expansions are expected to take place in these countries, and not in China or Taiwan. EnergyTrend also reports that this new wave of overseas capacity expansion will "once again disrupt the supply-demand equilibrium that has been gradually formed in the recent period".
In light of production moving to emerging markets, pv magazine had reported that SolarWorld will be taking new legal action against PV imports from Malaysia and Taiwan as well, with the suspicion that the modules actually originate in China. SolarWorld officially asked the European Commission to launch an anti-circumvention investigation of imported solar products from Taiwan and Malaysia.
Chinese polysilicon prices are expected to increase from the current range of RMB115 to 118 per kg (US$17.95 to $18.42 per kg) after the import tariff exemption suspension. EnergyTrend states that the Chinese polysilicon prices will be under pressure to not increase above RMB125/kg ($19.53/kg). The market is expected to become competitive for tier 2 and 3 domestic manufacturers who expected to profit from the price increases initially. The increase is expected to be rather marginal though as major manufacturers like Daqo already enjoy lower electricity costs in western China and can therefore afford offering highly competitive prices. Non-Chinese polysilicon companies will be reducing capacities probably thanks to not being able to infiltrate the Chinese market as a result of high tariffs.
REC is one company that has seen its polysilicon production business being affected. "In spite of being the world’s lowest cost producer of solar grade polysilicon, we are no longer able to access the Chinese market without a 57% duty," stated REC CEO, Tore Torvund. "We have experienced very real consequences from this ongoing trade war, and it is hard to see that it will be resolved without mutual agreement from both the US and China."
Scrambling to India
India is now being seen as the place to be to set up production bases. With the European and U.S. trade disputes with China, cells and modules production have been affected. However, as EnergyTrend reports, large and vertically-integrated manufacturers are now seeking to produce these products overseas, India being one of the key choices. With these PV companies establishing their production overseas, China’s dominance in global PV production will probably be shaken. PV production clusters in markets like Malaysia and Thailand are also maturing.
EnergyTrend expects tier 1 manufacturers like Trina, Jinko and JA Solar to significantly increase capacities and push the global PV market supply again. Trina, for one, has plans for a production facility in Thailand as pv magazine reported. Tier 2 companies will be pretty much reliant on orders released from tier 1 manufacturers in an environment of immense price pressure and oversupply. Taiwanese cell makers will have to compete with PV companies who have set up shop abroad and around the tariff barrier. Hence the Taiwanese players will have to implement flexible strategies to keep the numbers up in the next half of 2015. EnergyTrend is also expecting consolidation to happen with strategic alliances and mergers between small and large companies as well as between module and cell companies.