CHINA CAN BE SOLAR’S GERMANY

Is China Now the ‘New’ Germany of PV Demand?

Michael Barker, February 20, 2013 (SolarBuzz)

“The second half of 2012…cemented the rise of China as a major force in global PV demand, complementing its place as a leader in the upstream supply side…for several years…aided in no small part by government assistance at the provincial (driven by local job creation goals) and national (supporting a key industry sector) levels.

“Germany…has seen its production base dwindling over the past few years, while remaining the largest single-country end-market in the world. But this changed at the end of 2012 when China passed it…[T]his trend is now set to continue for many years…[overlapping with industry uncertainty] caused by European trade investigations.”

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“…[I]f this trade dispute is to restrict the European market from Chinese-produced PV products, it may cause a severe bifurcation within the industry into China and non-China based supply/demand environment. Chinese manufacturers that lack the ability to pursue partnerships/acquisitions in Europe may [have to]…put all their efforts into securing projects in their own end-market.

“…Already, some Chinese manufacturers have exploited local end-market growth to boost Y/Y shipments and increase their market-share globally. If this trend continues in 2013, it is possible that China will become the largest – and for many the only – market for domestic supply…[But] over-dependence on any one market comes with considerable risks to PV manufacturers…A major development to watch…will be how China manages domestic supply to meet its own PV demand climate over the next 12-18 months. The related issue is how Tier 1 Chinese manufacturers adapt to the situation outside of China to keep a strong pipeline of global opportunities going forward.”

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