The Chinese photovoltaic market has been predicted to grow to as much as 10 GW in 2013, however on the SNEC tradeshow floor, talk was of a market more likely in the range of 4.5 to 5 GW for the year.
Despite this, China remains an important and influential market, with foreign and domestic investors engaging with project developers and EPCs. It is also, however, a market in flux. TÜV Rhineland's Michael Struckmeyer told pv magazine that the utility-scale market is no longer being prioritized by Chinese national and regional governments, with focus moving to the commercial rooftop space.
The reason for this major shift in government policy and the resultant photovoltaic market in China is grid integration issues, said Struckmeyer. He explained that there is only one Chinese grid utility state owned that has the capability to install large grid infrastructure and that this company is working at capacity at present. Struckmeyer said that some photovoltaic power plants have been completed, but not grid connected in the country.
In terms of TÜV Rhineland's business in China, providing certifications for upstream processes and the auditing of new lines has dried up, because producers are not adding new lines. On the flip side, TÜV has seen good growth, at a rate of approximately 20% since Q3 2012, in demand for the certification of photovoltaic projects. Here the trend towards rooftop projects and away from utility-scale power plants has been clear since Q4 2012.
In terms of the depressed equipment spending, Struckmeyer said that even the top 15 Chinese module producers lack the revenues to invest in new equipment and are instead using funds to pay down debt obligations.
Slow, but sales continue
Equipment supplier Schmid confirmed TÜVs reports that equipment sales are much reduced from years past, but reported that there were positive signs at SNEC. Schmid's Ralf Lüdermann said that orders are coming in relatively good volumes for certain tools.
Schmid's TinPad equipment for backside passivation is pulling in orders as it is a more affordable equipment purchase, according to Lüdermann. He added that the tool has the twin advantage of being able to deliver savings in the short term, while in the long term this type of equipment can be used in future technology upgrades, such as Perc cells.
pv magazine observed that large crowds were inspecting the tool at the Schmid booth. Lüdermann added that the Schmid team did not have high hopes for the SNEC tradeshow before attending, but that both visitor numbers and interest had exceeded expectations.
Inverter interest in China
U.S. inverter manufacturer Power-One, which was recently acquired by power electronics giant ABB, told pv magazine that the Chinese market presents many challenges, but that it remains important in part because of its great scale. Power-One has Chinese manufacturing facilities and that one of the keys to success is to become immersed in the process of developing projects.
Power-One's vice president of Renewable Energy Sales for the Asia Pacific region Steve Cheung said that not all of the 4.5 GW potential market in 2013 is of particular interest, as price competition can be extreme. Cheung added that payment conditions can be testing as firms can delay final payment for many months.
Despite these complications, Power-One expects sales to supply many tens of MW to Chinese projects in the first half of 2013. The firm, which also has manufacturing in the U.S. and Italy, supplies the Chinese market in part through a partnership with state-owned module manufacturer and project developer Phono Solar. The partnership sees Power-One supplying its inverters to around 50% of Phono Solar's projects in China.
Swiss inverter firm SolarMax is continuing its expansion into the Chinese market and was present again at SNEC this year. SolarMax's CSO Hans-Thomas Fritzsche told pv magazine that while the firm has not yet supplied a major project in China, it remains a priority for the firm. Fritzsche said the company will not be joining Chinese tier one module manufacturers in their rush into Japan, saying that it will focus on China as a long term growth market.
Cash flow
While the unique characteristics of project development in China present challenges for project developers and inverter and module manufacturers, this is true also for materials suppliers, according to SNEC participants.
Honeywell's Global Business Manager for Photovoltaic Module Packaging Jerry Buchanan said that it appears the biggest challenge for all Chinese module manufacturers is cash flow. "Obviously if you're looking for good quality customers, then ones that recognize quality and are willing and have the capability to pay for it are key," said Buchanan.
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