China’s National Reform and Development Commission has announced that
there will be no significant reduction in feed-in tariff (FiT) rates
for the country’s photovoltaic (PV) power plants in 2016. In its report
on improving FiT policies for onshore wind and PV electricity, the
commission states that the FiT rates for solar energy resource region
one will drop by 5.56% next year.
Region one refers to western sections
of China (Ningxia, Qinghai, Xinjiang and etc.) that are under a more
severe electricity rationing regime. For solar resource region two and
three, the rate reduction will be less than 5%. Region two includes
Beijing, Tianjin and parts of western/central China that are under less
severe electricity rationing; whereas region three covers eastern
sections of China that have not experienced much electricity rationing
as well.
This announcement is not going to dampen the boom in the construction
of PV power plants in China while the country’s central government
promotes the nation’s 13th Five-Year Plan, according to Corrine Lin,
analyst at EnergyTrend, a division of TrendForce. Conversely, Lin
expects that the change in FiT rates will result in a moderate increase
in China’s installation demand next year, and prices across the PV
supply chain will also continue to rise.
Lin said: “Prices are projected to rise in November and December.
However, the market outlook for the end of this year remains uncertain
due to the following factors. First, there is the ongoing PV trade
dispute between China and the U.S. and the outcome of anti-dumping and
countervailing tariffs (AD/CVD) review is still pending. Second, major
Chinese PV firms such as Jinko Solar, JA Solar and Trina have expanded
their production capacity in foreign countries. How much of an impact
their overseas activities will have on the market is yet to be
determined.”
Lin added that if the U.S. made concessions to China during the trade
negotiation and kept AD/CVD rates low, companies that would be first
lose out include those already enjoying low rates or are exempted from
tariffs. Cell manufacturers that are able to trade at higher prices by
producing outside China and Taiwan would be negatively affected as well.
Polysilicon prices may rise as orders stream into different parts of the supply chain
Polysilicon prices in China remain depressed despite the closing of
the processing trade loophole. Though tariffs are blocking imports from
major U.S. suppliers such as REC Silicon and Hemlock, the country still
allows polysilicon from OCI and Wacker. Imports and excess domestic
capacity therefore have created an oversupply situation that currently
puts pressure on Chinese polysilicon prices. On the other hand,
EnergyTrend’s latest price report notes that China’s new FiT rates will
help keep demand high in the Chinese polysilicon market though the first
quarter of next year. The country’s polysilicon prices may even bump up
a bit in relation to the increases in multi-Si wafer, cell and module
prices.
Multi-Si wafers and cells are now in tight supply and their prices
have risen accordingly. Moreover, wafer and cell companies are also
negotiating for more favorable payment terms as most Chinese firms are
fully booked until the next Chinese New Year holidays. Taiwanese firms
are starting to negotiate prices for December as well. The multi-Si
wafer and cell markets have generally been very hot.
In the module market, some products are seeing incremental price
increase. Next year’s FiT rates announcement have led to a build-up of
demand in China as module buyers are rushing to stock up before prices
go up again. Module manufacturers have been so busy lately that some are
unable to accept new orders. EnergyTrend expects that price increases
will become more noticeable in the near future and this uptrend will
last to the end of this year.
http://pv.energytrend.com/price/ADCVD_Ruling_and_Overseas_Capacity_Expansions_Are_Variables_to_the_Curren t_PV_Boom.html
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