The vast SNEC trade show, much like the Chinese PV market, has grown at a breakneck pace. Its sheer size meant that it was very nearly impossible to get through all the halls, but pv magazine managed to do the rounds and spoke to key industry observers to get an overview of crucial China market and manufacturer developments.
Chinas domestic market in the ascendance
With much of the worlds solar manufacturing remaining in China or at least controlled by Chinese companies, the SNEC trade show represents a key global meeting point for the PV sector. However, in 2016 the sheer scale of Chinas domestic market and the number of attending companies that are focused exclusively on the Chinese domestic market was striking.
Having already achieved around 7.5 GW of installations in Q1 2016, some predictions at SNEC for the installed market in 2016 were are as high as 24 to 26 GW, however these were the outliers. Given that a FIT digression is set to occur mid-year, particularly in provinces facing curtailment issues, the consensus is that the second half of 2016 could see as little as four to six GW added, resulting in a annual figure of around 16 to 18 GW. This represents a significant achievement, but is short of the runaway boom expected by some and what many of the exclusively China-focused companies were hoping for.
Bloomberg New Energy Finances Jenny Chase said that her analysts are not publically communicating an installation figure for the second half of 2016, given a lack of visibility.
We think that China will build 12 GW in the first half of 2016, which is of course almost over, and that compares with about 18 GW [FY] last year, said Chase. We have just about no visibility as to what will happen in the second half of this year as we are still waiting for the exact numbers to come out.
Delays in subsidy payments and ongoing problems with curtailment are major challenges facing the sector but there was much talk of there being sufficient political will to meet them, which will facilitate continued growth.
Module price pressure second-half 2016
Chinese PV module manufacturers were putting on a brave face at SNEC, with gimmicks such as Victoria Secret-style fashion parades, lavish booths and vast LCD screens on display. GCLs arrival as a major module manufacturer was evident with the company displaying an array of new modules, from its large format module custom designed for its tracker system, to a glass-glass module that GCL reports is already producing at around 100 MW/quarter capacity. GCL also exhibited its 350 W Zero White Space module, which employs thinly sliced cells assembled into a module in such a way that there is no space left remaining between cells.
GCLs was far from being the only module producer with new module, and even cell, concepts on display, with BNEFs Chase noting that a move towards differentiation through technology is well under way.
I think that after a very strong Q1, some of the module makers here are a bit desperate, said Chase. We are seeing a lot of bifacial [technology], relatively rapid put together products, and essentially this is an attempt to differentiate.
Talk of a return to module oversupply was also evident, which was perhaps behind some of the moves to differentiate on product. Andy Klump, the CEO of Clean Energy Associates (CEA) said that some aggressive pricing was evident during the SNEC and that a trend towards downward price pressure is emerging.
Globally, the tier one and I wont use the entire tier one on the BNEF list but rather the top five to seven names I think they are being a big more aggressive on price, said Klump. The goal is to continue to keep placing modules in the key markets. Margins are going to come down, but once again costs are going to come down as well.
Klump noted that while demand is softening as capacity expansions continue, the oversupply situation, while real, is a far cry from the prolonged glut earlier this decade.
I dont think we are at that level of irrationality, but I do think there will be a bit of an oversupply, he observed.
Indias importance
Looking towards markets for Chinese PV products, India is emerging as the fastest growing end market. Of the foreign visitors to SNEC, attendees from India were a common sight. Japans RTS Corporation tracks module shipments and RTS Izumi Kaizuka noted that India was the number one export market for Chinese modules in Q1 of this year. CEAs Andy Klump concurred.
I think India has been the talk of the town for quite a few years, said Klump. But now India is really taking off and that trend will continue. Japan has been quite large [for Chinese suppliers] the past year or two and will slowly start to decline. It is hard to pick whether India will take one or two years to reach Japan, but I dont think it will take off in quite the same way.
Indian manufacturers themselves are expanding, and Chinese companies are also working in India to establish operations. GCL has teamed up with energy giant Adani to develop a 1 GW fab in India and other are expected to follow.
Engineers and management from Indian manufacturers also used this years SNEC to stay abreast of the latest production equipment trends and to place orders from global suppliers. For this reason alone, even for production equipment suppliers that may not do particularly vigorous business in China, the sheer number of solar production engineers attending the show makes SNEC a key meeting point.
The rise of Chinas equipment suppliers
Following the rise of the Chinese module manufacturers closely, Chinas production equipment suppliers are certainly on the up. The number of Chinese equipment suppliers exhibiting at SNEC continued to increase in 2016, as did the level of sophistication of their technology offerings.
European, Japanese and U.S. equipment suppliers were definitely present, however it appeared for the first time in 2016 that they may have been outnumbered by their Chinese rivals. And word on the exhibition floor was that the quality of the solutions being offered by the Chinese players is also increasing.
U.S. stringer provider Xcell Automation reported that while five years ago it had a leading position in supplying the Chinese market, it has seen that position recede to Chinese rivals such as Wuxi Autowell, that can provide high quality stringers at lower prices from China. Chinese stringers, Xcell said, can be supplied at one-third to half the cost of a U.S.-produced stringer.
I think they are improving, said BNEFs Jenny Chase, speaking of the Chinese equipment providers. It is pretty obvious that these days China has home-grown technology to make modules.
Module assembly was the first production step in which Chinese equipment suppliers rapidly gained market share over foreign rivals, but it now appears that they are gaining competence on cell processes as well. pv magazine observed Chinese companies offering cell process steps ranging from PECVD, through to ALD and even PERC upgrades.
While this may be the case, there is still a key role for European and U.S. suppliers to play in the Chinese market, with previously struggling companies such as GT Advanced Technology having a strong presence at the show. GT brought a half ingot to the trade show floor, to demonstrate how its new DSS 20M tool can producer larger ingots, utilizing seeded growth for highly uniform crystal growth.
Switzerlands Meyer Burger also took center stage in the hall, in which many of the European production equipment suppliers were present, and CEO Peter Pauli told pv magazine that despite the challenge from Chinese suppliers, its PERC upgrade facility is still running at full capacity to meet surging demand.
The Solar Superheroes debut
While hardly an impartial observer, it is undoubtedly true that pv magazines Solar Superheroes made a major splash on the trade show floor at SNEC. Seven Solar Superheroes stalked the trade show floor, posing for thousands of photos with show attendees and putting on performances at sponsor companies booths.
The Solar Superheroes also battled Coal, who was a large, if unwelcome, presence amongst the solar businesses. Needless to say, the Superheroes defeated Coal in the many battle-dance sequences the climate warriors performed. Thanks to 3D Mircromac, Bürkle, Heraeus, Meyer Burger, Vitronic and Wavelabs for partnering with pv magazine to bring our industrys heroes to life!
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