The first week in June and the world, it seems, is stuck on amber, revving impatiently at the lights for a raft of impending big moments to arrive.
In Europe there is the U.K. EU referendum looming ominously on the horizon, Spains second general election in the space of six months, and the interminable (for some) wait until the European soccer championships begin on June 10.
And with the summer solstice, Intersolar Europe, summer holidays et al also hoving temptingly into view, June holds a lot of future promise. But can the same be said for the solar industry?
Analysts IHS have peered into their crystal ball and recoiled a little, warning that the first half of 2016 dominated by runaway growth for China and an easy confidence in Japan, the U.S. and India may be masking a second-half slump for solar caused by injurious oversupply and falling demand.
According to IHS, China installed close to an almost unbelievable 13 GW of PV in the first half of 2016, as PV developers scrambled to put their projects in place before the feed-in tariff drop in China on June 30, 2016. However, to balance out these huge numbers, PV installations are expecting to fall by 80% in the third quarter of the year, with the Chinese governments goal to keep installations below 20 GW for the year.
As China pulls back its installations, prices are expected to plummet, which can already be seen in the industry, as prices for modules that will ship in the second half of 2016 will be as little as $0.44 per watt. To add to the strain that the PV industry will be placed under, huge expansions of production capacity will add to the oversupply, dragging the prices down further.
"After a crazy PV expansion (15 GW of cell; 18 GW of module) from China PV makers, solar cell and module production capacity of China and Taiwan is expected to reach 76.5 GW and 80.4 GW at the end of this year while the forecast of global PV installation is in the range of 65 GW 69 GW," said Morgan Kuo, global PV strategic marketing manager at Heraeus.
These factors combined will put a huge strain on PV module suppliers, who are already in financially precarious situations, and will most likely lead to a shakeout and consolidation in the industry. However, the industry has seen this before, and while there may be some short-term negative effects, it is unlikely that they will be too severe, or last for too long.
Tumble down, tumble down
Over in the U.S., meanwhile, the most pertinent story emerging from the solar sector is one of cost reduction. Impressive cost reduction. GTM Research has calculated that the DOEs SunShot program is on course to hit its target of sub-$1 per watt large-scale solar by 2020.
According to U.S. Solar PV Price Brief H1 2016, installed system costs for such systems have already fallen to $1.26 per watt in the first half of 2016, mostly due to ongoing declines in PV module costs. Currently modules represent around 1/2 of the total cost, with balance of system components representing another 22%.
The company expects improvements in both of these categories. Among the larger changes, GTM Research expects adoption of 1500 volt system architecture to substantially reduce the amount of wiring and electrical components.
So-called soft costs make up the remaining 28%, and GTM Research says that these represent the biggest opportunities but also the most significant challenges for future reductions. The company notes that this is doubly true for the residential and commercial market segments, where soft costs make up a larger portion of the total.
FIT for purpose
In Japan, which is expected to see a second-half of the year market slowdown, the government has moved to clear up certain aspects of its renewable FIT, passing a key piece of legislation for solar and creating a new certification system and tendering program for PV projects post-April 2017.
The revised Act on Special Measures for Renewable Energy contained a number of key changes to the FIT policy, including a new certification system and a new tendering program for PV projects.
"The upper house of the Japanese Diet [has passed] the revision of the FIT law" manager of the Research Division at PV consulting company RTS Corporation, Izumi Kaizuka, told pv magazine during an interview at SNEC.
"That revision included how tariffs will be set. Now that the law has passed, the Ministry for Economy, Trade and Industry (METI) can start to design the new tendering program for PV projects."
Suntech for sale?
Perhaps the biggest story from China this week was the news that Shunfeng (SCFE) had signed an MoU to offload its solar manufacturing business for a reported $760 million.
If the deal goes through it would see SCFE relinquish ownership of Suntech, which it acquired in 2014 to save it from liquidation. Reports this week suggest that Hong Kong tycoon Kin Ming Cheng who is also a substantial shareholder in SFCE as well as LDK Solar is the buyer, operating under his Asia-Pacific (China) Investment Management Ltd firm.
Changes are afoot at one of Europes more disappointing solar markets Greece. Rumors have begun swirling that the government may enact further FIT cuts, but what was confirmed earlier this week was the introduction of new policy framework for renewable support which will manifest itself in two pilot auctions for around 50 MW of solar PV, pv magazine understands.
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