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November 11, 2016Falling Sales for Solar Companies in China
China remains the biggest driver for renewable energy demand whether it is solar or wind energy. China installed a gargantuan 30 GW of wind energy and over 15 GW of solar energy in 2015 making it by far the largest installer of renewable energy capacity in the world. To give some perspective, China is now responsible for 50% of the global wind energy and 25% of the solar energy demand. This means that if China sneezes, the green energy industry catches a cold. This is exactly what happened. After installing a massive 20 GW of solar energy capacity in 2016 first half, demand collapsed in July. This led to a crash of more than 20% in solar panel prices as demand sank and products had nowhere to go.
With most solar companies based in China, the Chinese industry has also been the worst hit. Many of the top Chinese solar companies have been hit hard. Many of these Chinese companies ship mostly to their domestic market and they have been bearing the brunt. Eging PV which has a very little international presence saw its sales fall by an astounding 50%. Those Chinese companies which have built a strong international sales and marketing distribution channel were not that badly hit. For example, GCL Poly which has become one amongst the most influential global solar companies saw its sales go down by 30%. Still a bad fall but not that bad. The Chinese demand is hopefully expected to come back up in the current quarter which will be a relief.
Though solar panels prices have bottomed out at around 40 cents/watt, solar cell and wafer prices have made a sharp comeback as most solar companies reduced their output with prices falling way below costs for their components. Solar cells and wafers have seen the prices go up by more than 15% in the last month as inventory has been drawn down. While no one knows what the future will look like for solar panel prices in 2017, it seems that for 2016, solar panel prices should remain stable at 40 cents/watt.