Solar glass manufacturer Xinyi Solar has revealed in its first-half figures that China's National Development and Reform Commission in June determined solar feed-in tariffs would be capped at the level of local coal-fired power prices as the nation enters grid parity for photovoltaic electricity.
The benchmarking against coal applies for all new utility scale projects as well as commercial, distributed generation arrays, Xinyi stated, as it reported stellar six-month returns and a doubling of its dividend.
Shareholders are set to receive HK$0.17 (US$0.02) per share although the message from the Xinyi board was ‘enjoy it while it lasts,' amid predictions a solar glass price described as “plummeting” during the April-to-June period will cause “challenging” conditions for the rest of the year.
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Xinyi's first-half figures, which the company described as “spectacular revenue and profit growth” included profits attributable to shareholders more than doubling, from HK$1.4 billion (US$180 million) in January-to-June last year, to HK$3.07 billion (US$394 million) this time around.
The numbers went in the right direction almost entirely across the board as the solar glass price continued to soar in the first three months of this year.
However the board noted prices began to reverse that trend in the last quarter, as rapid expansions in production capacity across the industry – driven by shortages of solar panel glass last year – coincided with arrested demand caused by the knock-on effect of those price rises, coupled with a soaring polysilicon price.
That has seen pressure on solar glass pricing since March, with Xinyi reporting the price of mainstream, 3.2mm solar glass fell more than 45% in the first half of the year.
The polysilicon price, said Xinyi, “generally stabilized or even started to decrease” last month.
Pricing pressure could delay or even halt glass production capacity expansion plans for Xinyi's rivals, the company said, although Xinyi itself said its plans were unchanged. The company started trial production runs at three of its four new 1,000 ton-per-day-melting-capacity lines in Wuhu, in Anhui province, in January, March and last month, and expects to fire up the fourth line next month.
More, more, more
Another eight 1,000-ton lines are due to be completed next year, with four in Jiangsu province's Zhangjiagang and four more in Wuhu; and a further eight lines have already been planned for Wuhu, with their installation timelines to be determined.
Xinyi last week announced a glass sales agreement with solar giant Longi which will see the Chinese module manufacturer purchase at least 35% of its annual demand from the glassmaker at prices determined on a monthly basis. Xinyi said the arrangement would start next month and run until at least the end of 2025, with the option of a rolling three-year contract built in to the agreement.
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