The PV industry gathered in Shanghai last week for the world’s largest solar energy trade show, SNEC 2016, with the following highlights:
• Solar panel $-prices to fall in 2H16
• Uncertainty for Tier 2 manufacturers
• Serious financial concerns over Yingli
• After the Chinese government announced an extension of the 2015 feed-in tariff rates to the end of June ’16, there was a rush for PV installations in Q4 ’15 and Q1 ’16, resulting in tight supply. Major regional markets such as the U.S., Japan and India also experienced a surge in demand. The rush is now over: global demand will drop in second-half of 2016 and so will prices (in dollar). PV producers assume that PV panel prices will be in a steady decline. In sum, the world market is entering off-peak season.
• Vertically integrated Tier 1 manufacturers will be able to maintain high capacity utilization rates due to their large customer base and diversified market channels. The outlook for Tier 2 manufacturers, however, is more pessimistic as they are experiencing demand slowdown and inventory pressure. Hence, the market demand following this year’s SNEC will be uncertain, mainly for Tier 2.
• Worries about Yingli are increasing as it recently missed loan repayments. Yingli’s last profitable quarter was in 2011, and since then the firm has piled up debts with each passing year. In 2014, the company lost its market leadership to Trina, and currently just holds to the Chinese top-5. The scenario seems comparable to Suntech: errors in decision-making including large-scale expansion along the whole value chain (resulting in overcapacity), the amassing of debt, an inefficient and stiff distribution structure, marketing overspending and eventually retreat from the market.