At any other point, the booming solar manufacturing figures released by the China Photovoltaic Industry Association (CPIA) would be a cause for rejoicing, but the latest statistics relate to the first six months of the year, and could soon be regarded as the point of ‘peak solar' in the wake of the Chinese government's decision to rein in PV subsidies.
The CPIA revealed its Review of the First Half and Outlook for the Second Half of 2018 report at its half-yearly meeting, and most industry watchers can be expected to focus on the second half of the publication.
On the back of another round of thumping output levels, the association is predicting that the policy announcement that shook the solar world at the end of May will see the percentage of PV module production capacity in China actually in use tumble as far as 47.6% in the remainder of the year.
Adding the rider that utilization rates will be even lower if solar manufacturing companies go through with their stated production capacity expansions for 2018, the CPIA expects only 57.8% of domestic cell manufacturing capacity to be in use and only 66.5% of wafer capacity.
The organisation predicts the current scramble among solar companies to undercut each other and sell their stockpiles abroad will not only lead to tough times for the exporters, but is also likely to worsen the protectionist trade barriers being hastily assembled by governments including the U.S. and, potentially, India.
Authorities must step in
The CPIA also pointed out the rising non-technical costs of developing solar projects in its domestic market, and says more than 20% of typical project cost is tied up in land acquisition, financing and grid connection, all areas the organisation says the Beijing authorities could help address.
The impressive figures seen in the first half of the year will come as no surprise after solar analysts were caught out by record levels for all aspects of Chinese solar last year.
More than 140,000 tons of polysilicon was produced in China in the first half of 2018 – a 24% year-on-year rise – with a further 67,000 tons imported to meet demand. That led to increased production capacity, especially in areas offering cheaper labour such as the Xinjiang Uygur autonomous region and Inner Mongolia.
The price of polysilicon continued to fall during the period, to below $13,500 per ton.
The manufacturing of silicon wafers was an even more conspicuous success story, with a 39% rise in output on the first half of 2017, to more than 50 GW worth, 12 GW of it exported. The price of mono silicon fell at a steady monthly rate of CNY0.3/piece ($0.044/pc) to reach CNY3.3/pc this month, with multi silicon down to CNY2.2/pc.
Cell and module production rose
Cell output rose 22% by the same annual comparison, up to 39 GW – with PERC technology gaining in popularity – and Chinese factories churned out around 42 GW of modules, also 24% up on the first half of last year, with around 19 GW shipped abroad – to the apparent fury of the White House – and around 45% of the output complying with the criteria of the national Top-Runner Program.
Distributed generation exploded in popularity by 70% in China from January, spooking the Beijing authorities as small-scale generation made up around half of the 24 GW of capacity installed in the first half. Of that figure, more than 8 GW of ground-mounted projects were added last month, with the effects of the policy decision at that point yet to kick in.
That all added up to around $5.2bn of exports from January to May, up from $4.3bn in the same period a year earlier.
They are figures unlikely to be repeated in the next update from the CPIA.
Author: Vincent Shaw
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Are you actually suggesting this will be the year we installed most solar, and from now on there will be no or negative growth?
Even pvmag is starting to sound like the IEA now. “Sure growth has been wild, but it’s going to plateau from here on out.”
The chances of China slowing their pv production are exactly zero. Why would they? It’s all trade war bluster, we’ll see 60+GW of Chinese installs this year for sure.