Taiwanese-based analyst firm, EnergyTrend has released its “Solar Powering Taiwan: Special Report”, looking at the country's progress in meeting its 20 GW solar goal, by 2025.
The analysts see the country on track, having postes record installations totaling 470 MW in the first half of 2018. To meet the goal, EnergyTrend estimates that for the full year 2018, a total of 850 to 920 MW of installations will be required. Following that, growth rate has to meet CAGR 303% to stay on track. By that growth margin, installations in 2025 would meet 4 GW, according to the analyst’s estimations.
Recent drops in module prices and profound effects on overall system costs are factors that help the country to stay on this growth track. According to the analysis, construction costs for utility-scale PV in Taiwan have plummeted down to levels that are comparable with those of Germany, Italy or the Netherlands.
Accordingly, module prices have the most significant impact in system costs; hence their price decline was also the primary driver of overall system cost declines. While in 2017, modules accounted for 48% of system costs, they accounted for just 40% in 2018.
However, the costs for inverters have also been falling amidst global price competition, causing this component to comprise less of the overall system costs in 2018, than it did in 2017. Indeed, last year, inverters accounted for 11%, but have dropped down to 6%, according to the data. The analysts attribute a higher influx of Chinese manufactured inverters as the cause for this development.
Falling module prices have had a profound effect on Taiwan’s upstream market. Traditionally in a strong position, Taiwanese manufacturers now see themselves in a new wave of fierce competition against Chinese manufacturers. Most recently, as Europe waved goodbye to its MIP, Chinese modules once again have a better chance on the European solar market.
Also, the immense overcapacity of modules, resulting from China’s 31/5 announcement are still driving down module prices around the world. According to pvXchange, module prices in the high-efficiency segment have fallen from $0.50/W to $0.39/W over the last 12 months. Prices for regular poly-mainstream modules, meanwhile, decreased from $0.41/W to $0.31/W over the same period.
According to the analysts, more Taiwanese companies will enter the downstream market instead. With ambitious domestic goals, and severely reduced upfront costs and capital investments, there is an increased willingness to develop at a higher pace in Taiwan in the second half of 2018.
Module suppliers Neo Solar Power Energy Corp. (NSP) and AU Optronics Corp. (AUO) topped the Taiwanese market in H1 2018, reports EnergyTrend, citing the two companies’ high reputations and wide market recognition. Other domestic manufacturers are “scrambling” to tap the Taiwanese market, which possesses vast potential, according to the analysts.
They further specifiy that newly formed module manufacturer, United Renewable Energy Corp., Ltd. (URE) had 700 MW of capacity in the first half of 2018. TSEC Corp. (TSEC) and AUO closed H1 with 500 MW, respectively, while CSI Technology Co. (CSI) and Taiwan Solar Module Manufacturing Co. (TSMMC) produced 200 MW and 250 MW, respectively. This results in cumulative production capacity of 2,150 MW for these suppliers.
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