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15 October 2020

China exported 33.8 GW solar modules in first half of 2020

PV InfoLink has reported that China exported 33.8 GW of solar modules in H1 2020. This figure is little different from 32.6 GW in H2 2019 and 34.2 GW in H1 2019, but plenty is changing beneath the surface.

Infolink’s numbers indicate that the four countries whose demand for Chinese modules has fallen the most are Mexico, India, Vietnam, and the Ukraine. Demand has increased in the USA (recovering from a negligible 490 MW in 2019), in Chile, and in ‘the Netherlands’.

The Netherlands’ huge figure is owed to the role of its ports and warehouses in further distribution throughout Europe; that country itself will be installing only at most 1 GW per half-year for the foreseeable future. In other words, the biggest swing in Chinese exports in H1 2020 is towards the European states served by Dutch storage space.

This was to be expected given that the European Union operated a minimum price for Chinese panels, which meant hiking the prices by some 60%, up until late 2018, when the EU parliament finally squashed what was a European Commission move. It has perhaps taken this long for imports to ramp up to speed once again.

Since the looming acceleration in France, Italy and the UK has yet to arrive, these exports will be ultimately bound to a whole assortment of countries, at least a dozen of them. Poland, the big new market entrant, immediately comes to mind as the biggest. Last month its state and local manufacturers began working together on policies to promote its own manufacturing industries, as at present they are struggling with Chinese imports.

The increase in American demand is due to the exemption of bifacial panels from import tariffs – an exemption which may be ended soon. Chilean demand has risen simply because the Atacama is a prime location for solar plants, with investment coming from mining companies.

The decline in Mexico, India, Vietnam, and the Ukraine is in line with what we’ve been hearing from those markets. Mexico and Ukraine’s policymakers have both turned against renewables, creating a turbulent policy framework unsafe for investors – though Mexico’s solar industry will still carry on, just not as strongly as before.

Vietnam’s 2019 explosion was anomalous, as it suddenly filled in all the free space in its transmission infrastructure, powered by an overgenerous FiT of $93.5 per MWh. That FiT has now been cut and new developments will occur at a rate limited by the expansion of the grid.

Indian solar has been hit on all sides – the pandemic lockdowns caused more disruption there than elsewhere; local states and distribution companies are raising a variety of policy, financial and other nuisances for renewable projects; and the transmission grid needs expansion.

While geopolitical hostility to China is spurring calls for raised import tariffs, this hasn’t yet played a real role in imports from China, as they are still dominant and highly competitive under the current rate of 15%. The reduction in Indian demand is simply because the Indian sector is having a bad time.

PV Infolink has also identified a swing in marketshare towards the biggest manufacturers within China – namely JinkoSolar, JA Solar, Canadian Solar, Trina Solar, and LONGi. It attributes this to such companies having a greater array of financial, manpower and logistical resources at their disposal, making their deliveries more resilient in the face of lockdowns.

There has also been some talk of consolidation among Chinese manufacturers, especially in favor of vertically integrated corporations. That maybe come to pass under pressure from the end of China’s subsidies, plus the rise in polysilicon and PV glass prices, caused by insufficient supply, which have been particularly high within China.

Infolink’s figures also showed that out of 13.2 GW of Mono PERC shipped in the first five months, 2.1 GW – 16% – had the relatively new M6 or 166mm wafer size, reflecting the new manufacturing capacity which came online in 2019. The M6 size category will be the mainstay of several companies for a while, but as we’ve covered in other articles, the next big size categories of 182mm and 210mm are already on the way.