Thursday, June 20, 2013

Sustainable development path for solar PV manufacturers

Jamie Tang, SEMI China

China Photovoltaic Industry Sustainable Development Forum, Huhhot, Inner Mongolia, August 13, 2013, USA: Facing record low module average selling prices (ASPs) and upcoming anti-dumping (AD) duties in August from the European Commission, China’s PV community has to re-think incentive policies, market exploration, business models, cost control and technology innovation.

With large electricity subsidies from government, both PV manufacturing capacity and prices have improved in recent years. The levelized cost of electricity (LCOE) dropped to US $0.1/kWh in large scale power plants located in northwest China’s abundant sunshine. And it has been widely accepted that the PV market is no longer stimulated by policy, but by commercial interests.

According to present PV electricity subsidy prices, the Chinese government will pay more than US$1Billion, but only for newly installed PV capacity each year. Predicting how and when the feed-in-tariff will be reduced is unclear, but it would be implemented step by step.

More and more upstream PV manufacturers are lining up to develop power plants for higher profit as margins have been reduced in the manufacturing segment of the supply chain. The intent is to be the next First Solar and successfully operate both upstream and downstream business. Potential entrants must pay attention to the rising risk of policy change and cash flow fracturing.

The survival of solar players faced with all these risks and the challenge of sustainable development remains the key objective in the China PV community. In response to this new environment and changing market and policy trends, SEMI China will hold the China Photovoltaic Industry Sustainable Development Forum in Huhhot, Inner Mongolia, on August 13, 2013.

The proper incentive policies for the PV industry and market, mergers and acquisitions, new business models, cost controls and tech innovation will be intensely discussed.  The goal is to collaboratively develop a new model of industry growth and revenue potential as well as restore confidence in the manufacturing sector.

Hohhot is the capital of the Inner Mongolian Autonomous Region in north-central China, and serves as the region's administrative, economic, and cultural center. The region enjoys abundant sunshine with a daily average of 4.7 sunshine peak hours, and is characterized by large areas of desert, low electricity prices (less than 0.38yuan/kWh), abundant coal resources, and a convenient geographic location. All this makes Huhhot the ideal place to develop both PV manufacturing and PV power generation facilities.

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