China increases solar PV installation targets: 21GW by 2015

A June 2012 report by GTM research highlighted the massive glut of solar panel supply that currently exists globally, predicting that at current demand levels, the oversupply will continue until 2015. The supply glut will likely be absorbed, however, by the Chinese market after the Chinese government’s  announcement that it will raise its 2015 solar PV targets by just the amount GTM had predicted the glut would be–21 gigawatts (GW).

Nigel Morris of Solar Business Services commented on the magnitude of the Chinese government’s decision:

To put [the 21GW target] in perspective, it means in just 3 years time China will install the roughly the same amount of PV in one year, as the ENTIRE WORLD DID IN 2011.

Or put in the local context its equivalent to between 40% and 60% of all the stationary generation in Australia today.

The news has major implications for all players in the solar PV industry, but mainly solar panel manufacturers. The industry is expected to contract further in coming years in light of the supply glut, continuing the string of bankruptcies that has plagued the industry in the latter half of the the global solar boom that began around 2009. The development in China will create a massive market for solar PV designed to fill the gap that would have otherwise seen more solar panel manufacturers fold after sustaining years of the red ink accumulated just to stay in the game.

China already dominates the solar panel manufacturing industry, and has plans to increase its production capacity of solar PV cells to 5GW by 2015. Manufacturers–most notably European solar companies, but also including smaller Chinese makers–are facing more  and more financial stress as inexpensive panels from China flood the market.

Becoming a ‘solar superpower’ is a goal of the Chinese government, as evinced by the ambitious production targets it has set. It will be interesting to see whether the boost in the installation target proves to be a boon to the global solar industry or only the country’s home-grown manufacturers.

Meanwhile, in Japan…

Meanwhile, the Japanese government has introduced one of the most generous Solar Feed-in Tariffs in the world, at 44 yen (approx. AUD0.54) per kilowatt-hour exported to the grid, in response to strong public calls for the eradication of nuclear power from the country’s electricity generation portfolio after the Fukushima nuclear crisis that followed the 11 March 2011 earthquake and tsunami. Bloomberg New Energy Finance has predicted that the tariff will result in 3.2GW of solar PV installed in the next few years. A great deal of this growth is expected to take place in the commercial and utility solar power sector.

© 2012 Solar Choice Pty Ltd 

James Martin II