2014-12-30 | Editor : rheatsao 3219 pageviews

EnergyTrend’s Keywords of the Year: Anti-Dumping and Countervailing, Capacity Expansion, and Emerging Markets – 2014 Review 4/4

Recently, global solar PV market has been growing with an annual rate of 16~20%, and the trend is expected to continue until 2018. In 2014, the supply and demand situations have changed due to international trade disputes and new energy policies issued in many countries. Through the keywords of EnergyTrend’s analysis, market research and observation of 2014, we can forecast the upcoming 2015.

By reviewing 2014's research, it is possible for us to take a glance into 2015's trend. (Photo Credit: BlackRockSolar via Flickr)

 

Top 10 Keywords from EnergyTrend’s Research

What are the top 10 keywords of Energytrend’s solar market research? Let’s identify them through four major categories: supply chain, trade wars, policy and markets.

Keywords of supply chain: capacity expansion, high efficiency products

The solar PV market demand in 2014 has increased around 18% from 2013. As the uptrend is expected to last for years, many suppliers are expanding their production capacities to meet the strong demand. Meanwhile, the annual solar demand from China has already exceeded 10GW, making the nation the dominant market as well as the leading manufacturer. China consequently brings substantial influence upon the global supply-and-demand.

High efficiency products are getting PV industry’s attention because higher conversion efficiency means lower PV system costs and higher profits per watt. The advances in technology have caused PERC technology to become one of the profitable options for solar cell manufacturers. Besides, N-type PV cell, which is almost free from light induced degradation (LID) problem, is the next-generation solution for high efficiency cells.

 

Keywords of solar trade wars: China, Anti-dumping and countervailing, global allocation

Unfair subsidies and dumping issues are the main purposes of imposing tariffs on certain exporters. In 2014, China faced a series of trade wars, while U.S.’s “anti-dumping and countervailing duties” and EU’s “anti-circumvention investigations,” which accused China of violating the minimum price limitation deal agreed in 2012, are two of the main disputes.

The punitive tariffs would form trade barriers to force major exporters, such as China and Taiwan, to come up with new strategies like adjusting supply chains or slashing product prices. Establishing overseas manufacturing facilities, developing more export markets and increasing industrial value are all considerable methods for the PV companies to fight against the trade barriers. No matter which solutions the tariff-imposed companies choose, they have to accelerate their global allocation and react aggressively to the impact caused by the trade barriers.

Solar products' supply and demand is effected by the solar trade wars. (Photo Credit: Oregon Department of Transportation via Flickr)

 

Keywords of Energy Policy: National target, Feed-in Tariffs (FiT)

The national target of energy policy and financial plans can not only boost demand, but also encourage investment and industrial development. China’s and Japan’s ambitious national targets, subsidies and FiT schemes contribute the most towards Asia taking over Europe’s leading position within the solar market. Basically, China’s national support reflects its domestic distributed PV  demand and manufacturers’ developing strategies. The solar plant applications and installation capacities in Japan would change in accordance with its nation’s FiT trend as well.

 

Keywords of Markets: distributed generation, company merger,emerging markets

Taking into consideration the capacity of electric grids and power transmission gaps, commercial and residential distributed PV generation (DG) systems are getting more and more popular among customers. On the other hand, as suppliers enter the module and system business, the merger and vertical integration among companies have become a new trend. Moreover, we observed in 2014 that the demand and supply from the mainstream markets are reaching the equilibrium while emerging markets are on the rise. Plus, the emerging markets’ labor costs are lower than existing markets in average, which reveals the opportunities for global manufacturers to establish new facilities in these regions under the international trade disputes.

As more people pay attention to residential rooftop solar PV systems, there emerges a wave of service integration. (Photo Credit: Jon Callas via Flickr)

 

2014~15 Market Review and Outlook

In 2014, the global solar industry has benefited from growing demands but also limited by trade disputes, leading to fluctuating prices and shipments of solar products. As for Chinese and Taiwanese manufacturers who suffer from the slashed demands after the announcement of U.S.’s punitive tariffs, lowering prices is the only option to maintain their market share and utilization rates.

Factors like growing demand and trade disputes have raised EnergyTrend’s attention to capacity allocations in regions surrounding China and Taiwan, such as South Korea and South-east Asia, since the second quarter. Analysts at EnergyTrend had projected that REC Solar would expand its production capacity. Later on, the company was acquired by BlueStar and its capacity is expected to expand to 1.3GW by 2Q15. The acquisition and capacity expansion are recognized as a proactive strategy for Chinese manufacturers to export solar products to USA. In the meantime, First Solar, a CdTd cell manufacturer, has accelerated its progress in entering the North American market; the market share for American makers, including SunPower, has also increased successively in the states. Furthermore, Taiwanese manufacturers have shipped more products to markets other than China and USA, which demonstrates an alteration of the supply-and-demand structure among Taiwan, China and the U.S.

 

Market analysis

According to EnergyTrend, the market demands and shares of leading markets in 2014 and 2015 are:

The 2015 forecasted demand of USA, China and Japan is cumulatively 29.3GW, representing 57% of the global demand. Although the share in 2015 would be lower than 2014’s 60% (approximately 24.5GW), its total demand would grow. Besides, demand from the emerging markets is forecasted to increase 40% to 10GW and above.

The forecasted global installation of other market research institutes are:

IHS holds an optimistic point of view on China’s demand, projecting a 14~15GW installation (27% of the global market). BNEF, on the other hand, estimates that Japan’s demand in both 2014 and 2015 can reach around 10GW as well as projects a 3GW installation in India next year.

Trends in 2015

On the basis of observations of 2014, the major trends of 2015 could be:

  1. Company merging/integration: global-leading manufacturers’ predominance in production capacity, quality, brand image and other aspects will further be enhanced so the industrial concentration will become more obvious in the future.
  2. Entering the PV system business: as the prices of polysilicon, wafer and PV cells are decreasing and the market share of high efficiency products are increasing, the business of PV modules and systems will be more profitable to attract investment.
  3. Risk spreading: solar demands will vary according to different regions’/countries’ financial supports or trade barriers. Consequently, it is crucial for manufacturers to allocate properly, control sale channels efficiently, and offer localization services for survival in the PV market.
A utility-scale solar PV power plant in Ukraine. Demands from emerging markets will boost in the future. (Photo Credit: Active Solar via Flickr)

 

2014 Reviews:

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