An ad hoc interview given by the chief executive of GCL System at an industry conference is likely to set alarm bells ringing in the boardrooms of all the world’s PV giants.
Eric Luo, boss of GCL System Integration Technology told Reuters on Friday China is unlikely to see more solar project generation capacity installed in the second half of the year than the 11.4 GW added to the end of June, and predicted talk of an explosive rebound in Chinese PV was overblown.
“I think from now until 2025 we are probably looking at 20-25 GW per year,” Luo reportedly told Reuters at the inaugural Fortune Global Sustainability forum held at Fuxian Lake, in Yunnan, China last week.
With all of China’s – and, therefore, the world’s – biggest solar manufacturers going for broke to expand production capacity as fast as possible, in many cases bankrolled by state lenders and public entities, Luo’s pessimistic prediction could wreak havoc.
The accepted view
The industry consensus holds that China will see rapid acceleration in solar project capacity roll-out between this month and the end of the year. Manufacturers, developers and analysts alike believe the disappointing 11.4 GW of new solar added in the first half was down to uncertainty over what would replace the public subsidy regime so abruptly halted at the end of May last year. With China having set out its new policy and allotted funds for new subsidized and grid-parity projects, so the thinking goes, developers will now scramble to get facilities in place before their subsidies suffer stepped reductions for late delivery after December 31.
Californian investment banking company Roth Capital Partners on Friday issued an industry note linked to the Reuters interview which stated most of the subsidized projects allocated this year are in regions that are unworkable after October due to weather conditions, although there is no mention of that in the online version of the interview Luo gave at the industry event.
Although not directly quoting Luo, the Reuters piece goes on to add the chief executive said a slower Chinese market would not spell disaster for manufacturers ramping up capacity, as a 25% rise in overseas solar demand would soak up any overcapacity. Luo reportedly predicted global demand of 115-120 GW this year, up from 80 GW in 2017 during the previous Chinese solar boom.
Roth Capital had previously predicted 34 GW of new solar would be added in China this year and 50 GW next year. With the upsurge in new orders having been predicted to take off this month, the solar world will soon learn whether Luo’s forecast is likely to prove accurate.