china solar photo voltaic market report
TRANSCRIPT
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TABLE OF CONTENTS
List of Figures ............................................................................................................................ 4
List of Tables ............................................................................................................................. 5
1. China Solar Photovoltaic (PV) Market Introduction .......................................................... 6
2. China Solar Feed-in Tariffs Present Status and Impact ...................................................... 7
3. China Solar PV Market Size, 2006-2010 ........................................................................... 8
3.1. China Solar PV On-Grid and Off-Grid Cumulative Installed Capacity, 2006-2010 .. 8
3.2. China Solar PV On-Grid and Off-Grid Annual Installed Capacity, 2006-2010 ....... 10
4. China Solar PV Power per Capita, 2006-2010 ................................................................. 11
5. China PV Shipments, 2007-2010 ..................................................................................... 12
6. China Solar PV Market Segmentation .............................................................................. 13
6.1. By Technology Capacity and Output, 2010 .............................................................. 13
6.2. On the Basis of Applications of Solar PV, 2010 ....................................................... 14
7. China Solar PV Market Competitive Landscape .............................................................. 15
8. China Solar PV SWOT Analysis ...................................................................................... 18
Strengths .................................................................................................................... 18
Weakenesses.............................................................................................................. 18
Opportunities ............................................................................................................. 18
Threats ....................................................................................................................... 19
9. China Solar PV Market Future Outlook ........................................................................... 19
9.1. China Solar PV Cumulative Installed Capacity, 2011-2015 ..................................... 20
9.2. China Solar PV Annual Installed Capacity, 2011-2015 ............................................ 22
9.3. China Solar PV Power Per Capita, 2011-2015 ......................................................... 24
9.4. China Total Electricity Demand and Solar PV Electricity Contribution, 2009-2015
25
10. China Macro Economic Indicators: Current and Projections ....................................... 26
10.1. Population, 2006-2015........................................................................................... 26
10.2. GDP, 2006-2015 .................................................................................................... 27
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11. Appendix ....................................................................................................................... 28
11.1. Market Definition .................................................................................................. 28
11.2. Abbreviations......................................................................................................... 29
11.3. Research Methodology .......................................................................................... 31
Data Collection Methods ........................................................................................... 31
Approach ................................................................................................................... 32
11.4. Disclaimer .............................................................................................................. 33
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LIST OF FIGURES
Figure 1: China Solar PV Market Size in terms of Grid Connected and Off-Grid Cumulative
Installed Capacity in Percentage, 2006-2010 ............................................................................. 9
Figure 2: China Solar PV Market Size in terms of On-Grid and Off-Grid Annual Installed
Capacity in Percentage, 2006-2010 ......................................................................................... 10
Figure 3: China Solar PV Power Installed Capacity per Capita in Watt/Inhabitant, 2006-2010
.................................................................................................................................................. 11
Figure 4: China Solar PV Shipments in Megawatt (MW), 2007-2010 .................................... 12
Figure 5: China Solar PV Market Segmentation on the Basis of Applications of Solar PV, in
Percentage, 2010 ...................................................................................................................... 14
Figure 6: China Solar PV Cell/Module Producers Market Share on the basis of Production orShipment Volume in Percentage, 2010 .................................................................................... 17
Figure 7: China Solar PV Market Size in terms of Cumulative Installed Capacity in
Megawatt, 2011-2015 .............................................................................................................. 21
Figure 8: China Solar PV Market Size in terms of Annual Installed Capacity in Megawatt,
2011-2015 ................................................................................................................................ 23
Figure 9: China Solar PV Power Installed Capacity per Capita in Watt/Inhabitant, 2011-2015
.................................................................................................................................................. 24
Figure 10: China Total Electricity Demand in Terawatt hour (TWh) and Contribution of Solar
PV Electricity in Percentage, 2009-2015 ................................................................................. 25
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LIST OF TABLES
Table 1: Present Scenario and Impact of Feed-in Tariff Plans in China Solar Photovoltaic
Market ........................................................................................................................................ 7
Table 2: China Solar Photovoltaic Industry Feed-in Tariff Rates, in CNY/kWh in 2011 ......... 8
Table 3: China Solar PV Market Size in terms of On-Grid and Off-Grid and Total
Cumulative Installed Capacity in Megawatt (MW), 2006-2010 ............................................... 9
Table 4: China Solar PV Market Size in terms of On-Grid and Off-Grid and Total Annual
Installed Capacity in Megawatt (MW), 2006-2010 ................................................................. 11
Table 5: China Solar PV Market Segmentation by Technology Capacity and Output, 2010 . 13
Table 6: Competitive Landscape of Major Solar Photovoltaic Cell/Module Producers in
China (JA Solar, Suntech, Yingli Solar and Trina Solar) ........................................................ 15
Table 7: China Major Solar PV Cell/Module Producers Production or Shipment Volume in
Megawatt (MW), 2009-2010 ................................................................................................... 17
Table 8: China Solar PV Market Size in terms of Cumulative Installed Capacity in Megawatt,
2011-2015 ................................................................................................................................ 22
Table 9: China Solar PV Market Size in terms of Annual Installed Capacity in Megawatt,
2011-2015 ................................................................................................................................ 23
Table 10: China Population Trend in Million, 2006-2015 ...................................................... 26Table 11: China Gross Domestic Product in USD Billion, 2006-2015 ................................... 27
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1.CHINA SOLAR PHOTOVOLTAIC (PV) MARKETINTRODUCTION
China Solar PV industry is the second largest market behind Japan in Asia Pacific with the
cumulative installed capacity of 893 MW in 2010. The installed capacity has increased over 8
times from the level of 100 MW in 2007 to 893 MW in 2010.
Though the Chinese PV market has showcased phenomenal growth in the installed capacity,
the local market still contributes around 4% to total PV production. The country ships over
96% of the total PV production to overseas countries. The domestic PV market has taken off
in 2010 under the umbrella of national program Golden Sun. In 2009, the country
announced a gamut of plans and incentives to back the growth of the solar PV market
including open bidding for solar power plant licenses,the Solar Rooftop Plan and the Golden Sun
Demonstration Projects. Such activities were directed at
growing large-scale solar power plants and urban
rooftop solar power systems.
With this growth prospects in line, the government expects that 20 GW of cumulative
installation capacity will be installed by 2020. Well, it would be difficult to achieve this
target with the current shortcomings in the market. China is however definitely expected to
become a Gigawatt market by 2011 driven by various national and provincial programs.
There are several trends and developments which have been witnessed in the Chinese solar
PV industry such as the increasing share of thin film wafer in the solar cells production due to
improved conversion ratio and efficiency, gaining popularity of the administrative work
business associated with the license for solar PV installations, increasing flow of capital
investment in the PV equipment manufacturing and production of raw material line of
business and changing competitive landscape with the evolving technology. Few challenges
and opportunities await the PV manufacturers in the country. The supply chain in the country
has witnessed an increase in the manufacturing capacity along with the rise of business with
companies expanding via vertical integration. The insufficient capacity in the Chinese market
with respect to supply chain will not be dealt in the short run and will continue to linger on inthe near future. The disparity in capacity is largely because of restrictions in technology,
availability of funds and others. For instance, polysilicon which is used as a raw material in
manufacturing of solar cells is supplied 50% internally and the rest is imported. This has
resulted in a high price of polysilicon in the country.
The competition is expected to increase in the near future internally as well as externally with
introduction of more technologically advanced products. Many big investors and corporate
electronic giants are constantly tracking the PV industry and are looking out for ways and
China has over 400 solar PV
companies which produce over
23% of the PV products globally
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building 235 million kW of power
generation capacity from clean
energy forms by 2015, and
increasing its installed photovoltaic
power capacity over the next five
years to 10 GW by 2015.
purchasing Chinese solar
modules and inverters or using
Chinese firms to build profitable
projects
Source: AM Mindpower Solutions
Table 2: China Solar Photovoltaic Industry Feed-in Tariff Rates, in CNY/kWh in 2011
Category/ Capacity (KWp) Tariff Rates, 2011, (CNY/kWh)
Grid Connected Power Systems
1-1.15; varies on the timing and location of the
project
Source: AM Mindpower Solutions
3.CHINA SOLAR PV MARKET SIZE, 2006-2010
3.1. CHINA SOLAR PV ON-GRID AND OFF-GRIDCUMULATIVE INSTALLED CAPACITY, 2006-2010
With the rapid demand arising from European countries, the PV industry in China has surged
phenomenally. During 2006-2010, the cumulative PV installed capacity has increased at an
exceptional CAGR of 82.8%. China is one of
the largest solar cell manufacturers in the world
which contributes more than half of the global
output in 2010. There are nearly 300,000
individuals associated with this sector and theentire PV industry in China has generated
revenue of more than USD 44 billion.
The PV industry in the country is becoming
competitive with several local companies adapting the cell manufacturing process with the
latest technologies and silicon purification. Most of the raw material used in manufacturing
and the equipment used in installations are locally available. China has emerged in its
position in the solar PV market as the industry has realized economies of scale with the
China Solar PV industry is the second
largest market behind Japan in Asia
Pacific with the cumulative installed
capacity of 893 MW in 2010. The
installed capacity has increased over 8
times from the level of 100 MW in 2007
to 893 MW in 2010
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manufacturing capacity in full swing, resulting in price reductions and control on supply
chain management
Figure 1: China Solar PV Market Size in terms of Grid Connected and Off-GridCumulative Installed Capacity in Percentage, 2006-2010
Source: EPIA, AM Mindpower Solutions
Table 3: China Solar PV Market Size in terms of On-Grid and Off-Grid and TotalCumulative Installed Capacity in Megawatt (MW), 2006-2010
Years
On-Grid Cumulative
Installed Capacity (MW)
Off-Grid Cumulative
Installed Capacity (MW)
Total Cumulative
Installed Capacity (MW)
2006 71 9 80
2007 89 11 100
2008 130 15 145
2009 338 35 373
2010 815 78 893
Source: EPIA, AM Mindpower Solutions
89.0% 89.2% 89.8%90.6% 91.3%
11.0% 10.8% 10.2%9.4% 8.7%
82%
84%
86%
88%
90%
92%
94%
96%
98%
100%
2006 2007 2008 2009 2010
Off-Grid On-Grid
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3.2. CHINA SOLAR PV ON-GRID AND OFF-GRID ANNUALINSTALLED CAPACITY, 2006-2010
The solar PV industry has evolved in the past, in terms of its installed capacity and price of
the solar PV systems. In the last 3 decades, the price of the PV solar modules has decreased
from USD 78 to USD 2. This drastic decrease has been largely due to decrease witnessed in
the prices of the raw material used, worldwide acceptance and the efficiency achieved in the
operations. On the other hand, the annual installed capacity has increased manifold from 12
MW in 2006 to 520 MW in 2010. With plenty of resources available in the country, China
has emerged as one of the major supplier of PV systems offering quality and innovative
products.
The country has over 400 solar PV companies which produce over 23% of the PV products
globally. The number of grid connected large scale PV installations has increased in thecountry. It has been witnessed that the proportion of on-grid installations in the total annual
installed capacity has risen over the years. The grid connected installations were 477 MW in
2010.
Figure 2: China Solar PV Market Size in terms of On-Grid and Off-Grid Annual
Installed Capacity in Percentage, 2006-2010
Source: EPIA, AM Mindpower Solutions
89.0%90.0% 91.0%
91.2% 91.8%
11.0% 10.0%9.0% 8.8% 8.2%
82%
84%
86%
88%
90%
92%
94%
96%
98%
100%
2006 2007 2008 2009 2010
Off-Grid On-Grid
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Table 4: China Solar PV Market Size in terms of On-Grid and Off-Grid and Total
Annual Installed Capacity in Megawatt (MW), 2006-2010
Years
On-Grid Annual Installed
Capacity (MW)
Off-Grid Annual
Installed Capacity (MW)
Total Annual Installed
Capacity (MW)
2006 11 1 12
2007 18 2 20
2008 41 4 45
2009 208 20 228
2010 477 43 520
Source: EPIA, AM Mindpower Solutions
4.CHINA SOLAR PV POWER PER CAPITA, 2006-2010Chinas per capita solar PV power capacity is among the lowest in the world. The country has
registered a ratio of 0.7 watt per person in 2010 which was just 0.1 watt per inhabitant in
2008. This was largely due to the massive population in the country whose electricity demand
is huge comparative to supply in terms of installed capacity. Though the ratio is expected to
increase in the future, the solar PV market has a long distance to cover in order to penetrate
the electricity consumption market.
Figure 3: China Solar PV Power Installed Capacity per Capita in Watt/Inhabitant,
2006-2010
Source: EPIA, IMF, AM Mindpower Solutions
0.1 0.10.1
0.3
0.7
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2006 2007 2008 2009 2010
Watt/Inhabitant
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5.CHINA PV SHIPMENTS, 2007-2010The various government programmes and the feed-in-tariffs have created a surge in the
demand for PV in the country. In 2010, 520 MW of installed capacity was installed compared
to only 12 MW installed in 2006.
China is one of the leaders in the production of PV cells and modules but lag in the number
of PV installations. Although the country has witnessed growth in the PV sector, still in terms
of PV installations the country has a small share of 4% of the global PV installations as the
country ships over 96% of its production to overseas market. The shipment level has
increased almost 8 times from the level of 1,088 MW in 2007 to 8,000 MW in 2010.
Figure 4: China Solar PV Shipments in Megawatt (MW), 2007-2010
Source: IEA
1,088
2,600
4,011
8,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2007 2008 2009 2010
MW
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6.CHINA SOLAR PV MARKET SEGMENTATION
6.1.
BY TECHNOLOGY CAPACITY AND OUTPUT, 2010
Since most of the PV products are exported to different countries, there exists a wide
disparity between the production and consumption of PV products. Since most of production
is exported, there is heavy dependence on foreign markets leading to susceptibility in the
Chinese market. The local companies in China are also susceptible to amendment in the
exchange rate and the feed-in-tariffs introduced by other countries.
The country has a moderate capacity utilization ratio of 53% in terms of output of polysilicon
material. China generated 45,000 tons of polysilicon wafers in 2010 comparative to thecapacity of 85,000 tons. The market is currently dominated by the multi-crystalline and single
crystalline technology. About 11 GW of solar cells were produced in 2010.
Thin-film wafer is the new and upcoming technology which has improved the conversion
efficiency ratio. Presently, 0.5 GW of solar cells were produced in 2010 with the installed
capacity of 2.5 GW. The thin film wafer system is considered as the next big technology in
the solar PV market which will be a game changer as it is effective and efficient in
performance and cost.
Table 5: China Solar PV Market Segmentation by Technology Capacity and Output,
2010
Technology Capacity, 2010 Output, 2010
Polysilicon 85,000 Tons 45,000 Tons
Silicon Ingot/Chip 23GW 11GW
Si Solar Cell 21GW 8.5GW
Thin film Cell 2.5GW 0.5GW
Source: SEMI PV Group, China Photovoltaic Industry Association
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6.2. ON THE BASIS OF APPLICATIONS OF SOLAR PV, 2010
Rural electrification was the largest application of PV systems in China. Almost 50% of solar
PV installations are utilized for electrifying the rural areas. With more emphasis bygovernment on the BIPV segment, its share of 17.5% in 2010 is likely to increase in the
coming years. Communication and Industrial Applications, Small solar PV appliances and
ground based large scale PV power plants are other segments where PV installed capacity are
utilized.
Figure 5: China Solar PV Market Segmentation on the Basis of Applications of Solar
PV, in Percentage, 2010
Source: SEMI PV Group, China Photovoltaic Industry Association
50.0%
17.5%
15.0%
10.5%
7.0%
2010
Rural Electrification
Building-integrated
photovoltaics (BIPV)
Communication and
Industrial Applications
Small Solar PV Appliances
Ground-based Large-Scale
PV power plant (LS-PV)
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7.CHINA SOLAR PV MARKET COMPETITIVELANDSCAPE
Table 6: Competitive Landscape of Major Solar Photovoltaic Cell/Module Producers in
China (JA Solar, Suntech, Yingli Solar and Trina Solar)
Major
Players Business Overview
Key Business Segments
(Revenue Contribution) Financials Geographical Reach
Founded in 2005, JA Solaris a leading solar power
products manufacturer
Offers solar cells, modulesand panels for residential,commercial and utility-
scale power generation
Has total manufacturingcapacity of 2.1 GW in
2010 relative to 25 MW in
2006
Major customers includeBP Solar, Solar-Fabrik and
MEMC/SunEdison
Headquartered inShanghai, China
Solar Cells (69.6%):Manufactures
Monocrystalline Silicon
and Multicrystalline
Silicon solar cells with
average conversion
efficiency rate of 17.8%
and 16.5% respectively
Solar PV Modules(21.3%): Produces both
monocrystalline and
multicrystalline solar
modules ranging from
155W to 240W in power
output
Solar ProductProcessing (9.1%):
Provides solar product
processing services to
customers who supply
polysilicon or silicon
wafers
FY2010Group
Revenue:USD1.78
billion (up
211% y-o-y)
FY2010DomesticRevenue:
USD 909
million
FY2010Shipments:
1.46 GW (up
187% y-o-y)
Operates 2 solar cellmanufacturing
facilities in Ningjin,
Hebei Province and
in Yangzhou,
Jiangsu Province
Recently establisheda PV module
production facility in
Fengxian, Shanghai,
with an annual
capacity of 500 MW
Founded in 2001, Suntechdesign, develop,
manufacture and market a
variety of PV cells andmodules, including a
broad range of value-
added BIPV products
Has shipped over 15million panels since
inception and has installed
solar modules in over 80
countries
Has PV Cell and module
PV Cells (0.8%):Produces a variety of
monocrystalline and
multicrystalline siliconPV cells
PV Modules (95.3%):Produces a variety of PV
modules ranging from 2
watts to 290 watts in
power
PV System Integration(3.9%): Involves the
design, installation and
FY2010Group
Revenue:
USD 2.9billion (up
71% y-o-y)
FY2010Domestic
Revenue:USD 154
million
(5.3% of the
total
Has offices in 13countries including
regional
headquarters in SanFrancisco,
California,
Schaffhausen,
Switzerland, and
Wuxi, China
Operates in majorsolar energy markets
including Germany,
Italy, Spain, France,
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manufacturing capacity of
1,800 MW in 2010
Headquartered in Wuxi,Jiangsu province, China
and employs over 20,200
people
testing of PV systems;
provide this services
through subsidiary,
Suntech Energy
Engineering
revenue)
FY2010Shipments:1.572 GW
(up 123% y-
o-y)
Benelux, Greece, the
US, Canada, China,
the Middle East,
Australia and Japan.
Yingli Green is leadingphotovoltaic product
manufacturers which
design, manufacture and
sell PV modules and
install PV systems
Has manufacturingcapacity of over 1,000
MW for each of crystallinepolysilicon ingots and
wafers, PV cells and PV
modules in 2010
Company sells PVmodules under brand
names, Yingli and Yingli
Solar, to PV system
integrators and distributors
PV Cells: Produces PVCells to use in the
production of PV
modules; Company
purchases a small amount
of PV Cells from third
party to meet the
requirement
PV Modules (98.2%):Produces Monocrystalline
and multicrystalline PV
modules with an average
output ranging from 150
to 270 watts
Integrated PV Systems(1.8%): Produces PV
systems and also design,
assemble, sell and install
stand-alone PV systems
for lighting systems,mobile communication
base stations and
residential applications
FY2010Group
Revenue:USD 1.89
billion (up
72.3% y-o-y)
FY2010Domestic
Revenue:USD 113
million (up
127.1% y-o-
y)
FY2010 PVModules
Sold:1,061.6 MW
(up 102% y-
o-y)
Markets products toGermany, the US,
Italy, China, Spain,
the Netherlands,
Greece, Czech
Republic, France, the
United Kingdom,
South Korea and
Japan
Founded in 1997, TrinaSolar is leading
manufacturer of mono and
multicrystalline solar
modules
Has annual manufacturingcapacity of ingots and
wafers of approximately750 MW and cells and
modules of approximately
1,200 MW in 2010
Serves customers for anoff-grid and on-grid
residential, commercial,
industrial and utility scale
applications
Solar PV Modules:Produces standard
monocrystalline PV
modules ranging from 165
W to 185 W in power
output and
multicrystalline PV
modules ranging from 215W to 240 W in power
output for use in a wide
range of residential,
commercial, industrial
and other solar power
generation systems
FY2010Group
Revenue:USD1,857.7
million
FY2010 PVModules
Shipments:1,057MW
(up 164.9%
y-o-y)
AverageSellingPrice: USD
1.75 per watt
Operates inSwitzerland, US,
Japan, China,
Madrid, Munich,
Milan, San Jose,
Seoul, Tokyo and
Shanghai
Markets solarproducts in the US,
Belgium, Germany,
Spain, Italy,
Australia, India,
China, the Czech
Republic, France,
Israel, Japan and
South Korea
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Headquartered inChangzhou, China and
employs 12,863 people
Source: Company Reports, AM Mindpower Solutions
Figure 6: China Solar PV Cell/Module Producers Market Share on the basis of
Production or Shipment Volume in Percentage, 2010
Source: IEA, Company Reports, AM Mindpower Solutions
Note: * 2010 estimates
Table 7: China Major Solar PV Cell/Module Producers Production or Shipment
Volume in Megawatt (MW), 2009-2010
Solar PV Cell/Module
Producers
Total PV Cells/Modules
Production or Shipment Volume
(MW), 2009
Total PV Cells/Modules
Production or Shipment Volume
(MW), 2010
Suntech Power 739 1,572
JA Solar 509 1,462
Yingli Green Energy 525 1,062
Trina Solar China 399 1,057
20.0%
18.6%
13.5%
13.5%
6.8%
6.1%
4.4%
3.5%
2.9%
10.6%Suntech Power
JA Solar
Yingli Green Energy
Trina Solar China
Solarfun*
Jinko Solar China*
China Sunergy
Ningbo Solar*
Changzhou Yijing*
Others
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Solarfun* 220 535
Jinko Solar China* 120 480
China Sunergy 190 344
Ningbo Solar* 140 275
Changzhou Yijing* 135 225
Others 504 831
Source: IEA, Company Reports, AM Mindpower Solutions
Note: * 2010 estimates
8.CHINA SOLAR PV SWOT ANALYSISSTRENGTHS
Positive and robust national and regional subsidy program including tax rebates,incentives and soft loans
Easy administrative and regulatory policies for obtaining solar power plant licenses Worlds leading supplier of solar PV products and cost effective solar technology to
western European markets
WEAKENESSES
Immature and small domestic solar PV market High dependency on exports to drive the growth
OPPORTUNITIES
Rich solar power resources with average annual solar radiation level of over 5,000mega joules (MJ) per square meter and 66% of the country's area receiving over 2,200
hours of sunshine per year
Increasing investment from government and foreign players in on-grid, buildingmounted and ground mounted systems
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THREATS
Rising rivalry from other Asia Pacific countries in the price sensitive solar PV market Declining demand from Europe expected to take a toll on export dependent solar PV
market
9.CHINA SOLAR PV MARKET FUTURE OUTLOOKChina is expected to emerge as a prominent country with respect to manufacturing solar PV
products. The dominance of European countries and the US are expected to fade away with
rise of China as the epicenter of solar manufacturing. The low cost of production backed by
technological advancement are some of the factors which are creating a share for the Chinese
competitive products.
The soaring requirement of various PV products such as inverters and batteries in 2010, made
Chinese PV industry ramp up its production. The effect of increased production is being felt
in 2011 and beyond as the excess production will lead to a reduction in the price of the
components. Cheap products on offer are likely to stir the demand globally. The cheap
Chinese products will exert more pressure in the market in terms of pricing of products and
are also expected to improve its technology in the coming years. It is also expected that
consolidation may take place in the industry as the market is getting saturated, with number
of players increasing the competition.
Financial and credit markets worldwide experienced unprecedented deterioration in 2008 and
early 2009. Due to the global economic downturn and a concurrent decrease in consumer
demand, China experienced a slowdown in its economic growth during the second half of
2008 and early 2009. Consumption in general was adversely affected during that downturn in
the global economy.
Although the Chinese economy has recovered recently, it is doubtful whether such recovery
will continue for the remainder of 2011 and beyond. Any recurrence of a global financial
crisis may cause a further slowdown in its economy. These changes in macroeconomic
conditions have, had, and are expected to continue to have, an adverse impact on the business
and operations. These factors may also intensify competition for market share.
Improvements in the economy and general business conditions will depend on the extent to
which government policies succeed in addressing fundamental weaknesses in the markets,
restoring consumer confidence and increasing market liquidity in an adequate and timely
manner. Any recurring weakness in the global economy or in the economy of China may
materially and adversely affect the revenues.
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There is huge potential for the growth of the PV market in the country. Although the market
for PV cells and modules is the largest in the world but there is huge scope in the PV
installation market. Most of the PV products produced in China are exported to European
countries which have led to an increasing demand for PV products. The local PV
manufacturers needs to start targeting the local market for their product as it will be a majormarket in the coming years.
The government should introduce new ways and means in terms of policies and
recommendations to sustain the growth of PV market. The processes should be streamlined
with clear understanding of the implementation and evaluation of different events. More
incentives need to be introduced either by subsidy or feed-in-tariff which will have a positive
bearing on the market. With abundance of space available, rooftop and BIPV installations
should be encouraged.
Most of the projects are run by state run companies. Most of the PV business is operated by
government firms and there are hardly any projects run by private enterprises. In order to
promote healthy growth of the PV industry it is highly recommended that the market should
be more diverse with local players (both public and private companies) and foreign players.
9.1. CHINA SOLAR PV CUMULATIVE INSTALLEDCAPACITY, 2011-2015
China Solar PV market has witnessed major growth in production of solar PV cells, modules
and panels in 2010. The country is the largest exporter of solar PV systems to Europe and
other countries with a commanding market share. The domestic market on the other hand is
still underdeveloped and hence requires a major impel in the growth. The country has larger
proportion of small scale residential power projects till date. With the government initiative
on the commercial power projects, investors focus has shifted towards large scale grid
connected commercial power projects. It is expected that with this trend line along with the
government national and provincial program, the solar PV installations will increase
phenomenally in the country.
Under the normal business conditions, it is
expected that new players will enter in the
industry and existing players will consolidate
resulting in the influx of investment for the
solar PV projects. The economies of scale in terms of low cost of solar PV power systems
along with the increased preference for improved thin film wafer technology will aid the
investors to achieve the grid parity in the long run. It is expected that cumulative solar PV
installed capacity will incline to 1,650 MW by 2011 and to 10,610 MW by 2015.
With governments initiative oncommercial projects along with
investors targeting big grid connected
projects, the Chinas PV installations are
expected to increase tremendously
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The worst case scenario signifies that China will face stiff competition from other Asian solar
PV systems manufacturing countries such as Taiwan and South Korea resulting in the decline
in market share of exports in the country. Additionally, increasing pressure on European solar
PV markets due to the reduction in the tariff rate will result in low demand for solar PV
systems in the future. Since the domestic market contributes a marginal proportion to the totalsolar PV capacity, the decline in the exports will affect the industry. Hence, the cumulative
installed capacity in this situation will increase to 1,276 MW in 2011 and will reach 6,930
MW by 2015.
With Chinas commitment to cut down carbon emission per unit of the GDP by 40 to 45% by
2020 in comparison to 2005 levels ahead of the Copenhagen climate summit, the country is
expected to face increased pressure to reduce its dependency on conventional sources. Hence
under the best case scenario, it is expected that government will provide a major impel in the
future in terms of new incentive plans for investors for investing in large scale commercial
projects along with residential installations. Under this situation, the cumulative installedcapacity is expected to increase to 1,980 MW in 2011 and to 17,934 MW by 2015.
Figure 7: China Solar PV Market Size in terms of Cumulative Installed Capacity in
Megawatt, 2011-2015
Source: AM Mindpower Solutions
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2011 2012 2013 2014 2015
MW
Worst Case Base Case Best Case
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Table 8: China Solar PV Market Size in terms of Cumulative Installed Capacity in
Megawatt, 2011-2015
Years Cumulative Installed Capacity (MW)
Worst Case Base Case Best Case
2011 1,276 1,650 1,980
2012 2,290 3,120 3,967
2013 3,780 5,180 6,975
2014 5,350 7,670 11,155
2015 6,930 10,610 17,934
Source: AM Mindpower Solutions
9.2. CHINA SOLAR PV ANNUAL INSTALLED CAPACITY,2011-2015
Under the base case scenario, the cumulative capacity is expected to breach a Gigawatt
benchmark with annual installations of 757 MW in 2011. The capacity is expected to incline
with the prevailing situation in the country resulting in an increase to 10,610 MW by 2015.
Under the worst case scenario, increasing pressure on the European solar PV markets and
propelling other Asian countries will eat up the market share of China in exports and will
affect the annual installations in the country. In such situation, the annual installed capacity is
expected to decline marginally to 383 MW in 2011. However, it is expected that market will
soon stabilize as the domestic market will drive the growth of the solar PV industry. Hence,
the annual installed capacity will increase to 1,014 MW in 2012 and to 3,200 MW in 2015.
The best case scenario assumes compelling infusion of capital investment in the market alongwith decrease in solar PV systems prices resulting in fast adoption to clean renewable
electricity over other conventional sources of electricity. This will drive the grid parity in the
country resulting in an increased demand for solar PV installations. Hence, in this case, the
installed capacity will increase by 1,087 MW in 2011 to cumulative installations of 1,980
MW.
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Figure 8: China Solar PV Market Size in terms of Annual Installed Capacity in
Megawatt, 2011-2015
Source: AM Mindpower Solutions
Table 9: China Solar PV Market Size in terms of Annual Installed Capacity in
Megawatt, 2011-2015
Years Annual Installed Capacity (MW)
Worst Case Base Case Best Case
2011 383 757 1,087
2012 1,014 1,470 1,987
2013 1,490 2,060 3,008
2014 1,570 2,490 4,180
2015 1,580 2,940 6,779
Source: AM Mindpower Solutions
0
1,000
2,000
3,000
4,000
5,000
6,000
2011 2012 2013 2014 2015
MW
Worst Case Base Case Best Case
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9.3. CHINA SOLAR PV POWER PER CAPITA, 2011-2015
China solar PV power per capita ratio is expected to witness a major incline along with an
increase in the installed capacity. The ratio will however remain low as compared to the
average ratio in Asia Pacific and to that of Japan and Australia. Under the base case scenario,
ratio will reach 7.7 watt per person by 2015. The expected growth is based upon the China
current trend growth along with the development of the domestic market.
Under the best case, the per capita installed capacity will increase to 1.5 watt in 2011 and will
reach to 13.0 MW by 2015, at an expected 5 year CAGR of 81.3%.
Figure 9: China Solar PV Power Installed Capacity per Capita in Watt/Inhabitant,
2011-2015
Source: AM Mindpower Solutions, IMF
0.91.7
2.8
3.95.0
1.2
2.3
3.8
5.6
7.7
1.5
2.9
5.1
8.2
13.0
0
2
4
6
8
10
12
14
2011 2012 2013 2014 2015
Watt/Inhabitant
Worst Case Base Case Best Case
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9.4. CHINA TOTAL ELECTRICITY DEMAND AND SOLAR PVELECTRICITY CONTRIBUTION, 2009-2015
Electricity demand in China has grown at a rapid pace in the past. It was registered at 2,783
TWh in 2010 with solar PV contributing approximately around 0.20%. It is expected that in
2011, total electricity demand will increase to 2,914 TWh while solar PV market share in the
electricity consumption will increase to 0.24%.
Government consistent effort and support to promote new solar PV projects in order to
reduce carbon gas emission will result in increased adoption of clean electricity, though at a
higher price comparative to conventional sources. This effort is likely to increase the
contribution of solar PV in the total electricity generation and consumption. The electricity
demand is expected to grow at an estimated CAGR of 5% and will reach to 3,504 TWh by
2015 with solar PV contribution of 0.51%.
Figure 10: China Total Electricity Demand in Terawatt hour (TWh) and Contribution
of Solar PV Electricity in Percentage, 2009-2015
Source: SEMI PV Group, China Photovoltaic Industry Association
2,652 2,7832,914
3,0523,196
3,3463,504
0.16%
0.20%
0.24%
0.29%
0.35%
0.42%
0.51%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2009 2010 2011E 2012E 2013E 2014E 2015E
Electricity Demand (Thousand GWh) % of PV Electricity (Global Average)
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10. CHINA MACRO ECONOMIC INDICATORS:CURRENT AND PROJECTIONS
10.1.POPULATION, 2006-2015
China is the leading country in carbon emission which generates about 7,031,916 thousand
metric tonnes of annual CO2 emissions with the market share of 23.33% in the global
emissions. This indicates that the growing demand for energy from the world most populous
country contributed the largest to carbon emissions. China became the worlds largest
consumer of energy (18% of the total) when its consumption increased by 8% in 2009 and
from 4% in 2008. Oil and coal are still the leading sources used to generate electricity thoughtheir market share has reduced over time.
The government is taking stringent actions to reduce the population growth and energy
reliance on these sources by aiding renewable energy sources power projects. The country
has witnessed several solar power projects in the last 3 years and is expected that trend will
continue in the coming years. The per capita emission is also expected to reduce in China
with the fast pacing growth of non-conventional sources and with reduced population growth.
The Chinese population is expected to increase to 1,375.3 million by 2015.
Table 10: China Population Trend in Million, 2006-2015
Years Population (Million)
2006 1,314.5
2007 1,321.3
2008 1,328.0
2009 1,334.7
2010 1,341.4
2011 1,348.1
2012 1,354.9
2013 1,361.6
2014 1,368.4
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2015 1,375.3
Source: IMF
10.2.GDP, 2006-2015
Chinas is the worlds largest manufacturer of PV panels, exporting over 96% of the
production to overseas country. The country is one of the biggest harvesters of the sun's
energy. The market has seen strong incentive for solar farms and rooftop panels which will
come from the governments USD 640 billion economic stimulus fund. The growing GDP
and government expenditure is one of the major drivers for the strong economic stimulus. As
the economic condition of China will improve, the government will endeavor further toincrease the market share of renewable sources in the total electricity demand. The worlds
2nd
largest economy and worlds most populous country has great potential for its renewable
industries. By 2020, the government is expected to raise the share of renewable energy
(excluding hydroelectric power) in the total energy contribution to 6% from the present 1.5%.
Table 11: China Gross Domestic Product in USD Billion, 2006-2015
Years GDP (USD Billion)
2006 2,712.9
2007 3,494.2
2008 4,520.0
2009 4,984.7
2010 5,745.1
2011 6,422.3
2012 7,169.7
2013 8,000.5
2014 8,935.7
2015 9,982.1
Source: IMF
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11. APPENDIX
11.1.MARKET DEFINITION
Asia Pacific: The region includes Australia, China, Japan, South Korea and Taiwan
Grid Parity Point: It is the point where the electricity generation from other sources is
equivalent (in terms of cost) as the electricity generated from grid power.
Conversion Efficiency: Defined as the ratio of electrical energy generated by the cell to the
sunlight energy that reaches the cell. The conversion efficiency of PV cells is largely
determined by the quality of wafers used to manufacture the solar PV cells, which is, in turn,
is ascertained by the combination of different types of polysilicon raw materials used in the
ingot casting process.
Peaking Capacity: It is defined as the maximum electricity-generating potential of a
photovoltaic cell or panel
Feed in tariff: The price per unit of electricity paid by a utility or supplier for renewable
electricity purchased from private generators. The regional or national electricity utilities are
mandated to purchase renewable electricity at above market rates set by the government
Grid-Connected PV system1: A PV system in which the PV array acts as a central
generating plant, supplying power to the grid
Off-grid PV System1: System installed in households and villages that are not connected to
the utility grid. Usually, a means to store electricity is used. It is also known as "stand-alone
photovoltaic power system.
Worst Case Scenario: The worst case scenario assumes a market behavior with a major
feed-in tariff (FiT) cut or no enforcement of expected FiT proposal while assuming
increasing competition or increasing cost of the solar equipment in the market.
Base Case Scenario: The base case scenario indicates current business in continuity market
behavior with the equitable persistence of current feed-in tariff aligned with the Photovoltaicsystem prices but with no major impel from government in terms of reinforcement of existing
support schemes.
Best Case Scenario: This scenario assumes the initiation or continuation of feed-in tariff
complemented with a favorable political impel to regard photovoltaic as a major power
source in the foreseeing future. This will be accompanied with a removal of futile
administrative barriers and the streamlining of grid connection procedures.
Source:1. PV Employment.org
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11.2.ABBREVIATIONS
AC: Alternate Current
ADB: Asian Development Bank
ASEI: Asia Solar Energy Initiative
BIPV: Building Integrated Photovoltaic
CAD: Canadian dollar
CDTE: Cadmium Tellurid
CIGS: Copper Indium Gallium Selenide
DC: Direct Current
DIA: Denuncia di Inizio Attivita
EEG: German Renewable Energy Sources Act
ERO: Energy Regulatory Office
EU: European Union
FIT: Feed-in-Tariff
GHG: Green House Gases
GSE: Gestore Servizi Energetici SpA
GW: Gigawatt
INMETRO: Institute for Metrology, Standardization and Industrial Quality
IRR: Internal rate of return
KW-dc: Kilowatt direct current
KWp: Kilo Watt Peak
LED: Light-Emitting Diode
METI: Ministry of Economy, Trade and Industry
MJ: Mega joules
MW: Megawatt
PIDA: Photonics Industry & Technology Development Association
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PV: Photovoltaic
REC: Renewable Energy Certificate
RES: Renewable Energy Sources
RESOP: Renewable Energy Standard Offer Program
RIPV: Roof-integrated Photovoltaics
ROW: Rest of World
RPS: Renewable Portfolio Standards
TWD: Taiwan dollar
V: Volt
W: Watt
y-o-y: Year on Year
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11.3.RESEARCH METHODOLOGY
Several statistical methods such Covariance, Correlation, Regression and Coefficient of
Determination (R square) analysis have been used to assess the industry performance and
analyze the future outlook of the industry.
Correlation analysis is a measure of degree of association between two set of quantitative
data. Correlation coefficient describes the direction and strength (both positive and negative)
of association between the dependent variable and independent variables and overcome the
shortcomings of covariance analysis.
Regression analysis helps to calculate the value of one variable from known or assumed
values of other variables related to it. The report has independently studied the cause and
effect relationship between dependent and independent variables and has formulated theregression coefficient explaining the estimated change in the response variable due to a unit
change in the corresponding explanatory variable, conditional on the other explanatory
variables remaining constant.
R Square is the coefficient of determination that represents the proportion of total variation in
the dependent variable that is accounted for by the variation in the factors. In simple terms, it
explains the validity of the independent variables and reflects the degree of influence
independent variables have on the dependent variables.
The report has analyzed several socio-economic, demographic, political, and regulatory
market factors which directly or indirectly affect the industry performance by indicating their
degree of impact in the cause and effect relationship between them. The reason for selected
these macro-economic and industry factors has also been explained.
DATA COLLECTION METHODS
In terms of data collection, we have used both primary and secondary data sources.
Secondary Data Sources: Secondary data sources includes the analysis of existing macro
economic and demographic factors, obtained from national statistics of several regions and
countries and from magazines, journals and online articles The secondary data sources are
used to form the initial perception and contention on several forces playing their role in
determining the future growth in the industry.
Primary Data Sources: Structured interviews are conducted through telecon with several
industry veterans including major decision makers of companies operating in the sector,
representatives of several solar PV associations and research institute such as EPIA, Chinese
Renewable Energy Association. These interviews help the research team to authenticate the
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data collected from secondary data sources and to reject or accept the hypothesis regarding
the future projections.
APPROACH
Our research team follows a Top-down approach for the future projections in which they
first study the effect of economic factors and then industry factors on the sector.
This approach indicates the several independent macro-economic and industry variables and
their degree of relationship with the sector. The industry factors and their sensitivity have
been discussed in the regional solar photovoltaic market future outlook.
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11.4.DISCLAIMER
The research reports provided by AM Mindpower Solutions are for the personal information
of the authorized recipient and is not for public distribution and should not be reproduced or
redistributed without prior permission. You are permitted to print or download extracts from
this material for your personal use only. None of this material may be used for any
commercial or public use.
The information provided in the research documents is from publicly available data and other
sources, which are reliable. Efforts are made to try and ensure accuracy of data. With respect
to documents available, neither the company nor any of its employees makes any warranty,
express or implied, including the warranties of merchantability and fitness for a particular
purpose, or assumes any legal liability or responsibility for the accuracy, completeness, or
usefulness of any information, apparatus, product, or process disclosed, or represents that its
use will not infringe privately owned rights.
The report also includes analysis and views expressed by our research team. The research
reports are purely for information purposes. The opinions expressed are our current opinions
as of the date appearing in the material and may be subject to change from time to time
without notice. Investors should not solely rely on the information contained in the research
documents and must make investment decisions based on their own investment objectives,
risk profile and financial position. The recipients of this material should take their own
professional advice before acting on this information.
AM Mindpower Solutions will not accept returns of reports once dispatched due to the
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No part of this manual or any material appearing may be reproduced, stored in or
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