© saniphoto dreamstime.com Analysis | July 03, 2018
Chinese suppliers may start selloff of modules due to the oversupply
The Chinese domestic solar market has been shirking after the release of new PV policy. Faced with the oversupply, Chinese module makers will seek ways to export the excessive products, or even sell off the products to overseas markets.
Therefore, the global solar industry has paid intense attention to the price trends of modules and when EPC companies would place orders, writes EnergyTrend, a division of TrendForce. In the Taiwan market, for example, the government has announced PV Taiwan Plus Policy to ensure the competitiveness of Taiwan-produced products. Taiwan allows for a 6% increase in Feed-in-Tariff (FiT) for photovoltaic projects that use “High-Efficiency Modules” recognized by BSMI. Taking a 100kw corrugated roof-top PV mounting for example, EnergyTrend has compared the IRR using conventional modules and high-performance modules respectively. In the case of high-performance modules with 6% FiT premium, the IRR will have a 2% increase when module prices decrease by USD$0.10/W. In the case of conventional modules, the selloff prices are said to be USD$0.25~0.30/W, so the IRR will be around 15~16%. On the other hand, the prices of high-performance modules should be reduced to USD$0.36/W in order to increase IRR to 15~16%. For modules makers, this price level is almost impossible as they need to make profits and cover the high costs of qualification by BSMI. In the situation, Chinese low price modules, even without the 6% FiT premium, turn out to more competitive than Taiwan-made ones. As for the European markets, taking Trina Solar as an example, if the selloff price is USD$0.25/W, the market price of modules would be USD$0.39/W, 56.2% of anti-dumping and countervailing duty included. This market price would still be lower than other products in the European markets. In the case of U.S. market, where the duty is 72.54%, the market price would be USD$0.43/W, almost the same as other products in the U.S. market, but the Chinese modules would still be marginally competitive. EnergyTrend points out that China has taken over 70% of the global production capacity of solar modules. If the Chinese module makers begin the selloff, the global module prices will be lower. The impact of the selloff on global PV industry is expected to last till 2Q19.