China’s much-trailed second-half solar rebound has failed to materialize

Despite predictions of a late surge in solar installations in China this year, driven by the publication of new subsidy guidelines, there are signs the world’s biggest solar marketplace may experience another precipitous year-on-year decline.

Wang Bohua, chief secretary of the China Photovoltaic Industry Association (CPIA) said yesterday in Beijing, PV installation in the past nine months added up to only around 16 GW of generation capacity. If that figure is borne out, even the most pessimistic predictions for this year – that China would add 30 GW of new solar – would require 14 GW of new project capacity in less than 10 weeks to appear anything other than wildly optimistic.

There appears little reason to doubt Wang or his organization, given their record on solar predictions, and the industry is telling a similar story. The lack of a predicted solar rebound, which was supposed to kick-off last month, has left solar prices at rock bottom, with ten weeks of falling PV cell prices between early June and September followed by module declines since August.

Companies look elsewhere

“[An] overseas markets boom saved the sales of Chinese manufacturers from getting worse,” said the head of marketing of a leading solar panel maker, who was speaking anonymously. Major module manufacturers are lowering their shipment expectations for the second half as well as their annual figures.

The delay until June of the formal adoption of new rules for solar subsidies forced many small and medium sized engineering, procurement and construction services companies to look overseas for business or to turn to wind power development, which offered more stable business while Chinese solar policy was in flux.

At the beginning of the year, the CPIA was predicting 35-45 GW of new solar capacity in China this year and other analysts were more optimistic. Short of a miraculous, Vietnam-style solar gold rush before year-end, that figure now looks set to be south of 30 GW, which itself would constitute a 30% year-on-year fall after a 20% retreat last year.

That would be the very definition of a cliff-edge decline.