Taiwan’s government has focused on expanding the island’s PV power generation as part of its plan to abandon nuclear power. In terms of targets, Taiwan aims to add 1.52GW of PV capacity between mid-2016 and mid-2018 and ultimately achieve a cumulative capacity of 20GW in 2025. If 1.52GW plan is successfully implemented, Taiwan will be joining Thailand as one of the world’s 10 largest PV markets in 2017 with an annual demand reaching 900MW, according to EnergyTrend, a division of TrendForce. With the global PV demand being almost flat next year, Taiwan is now considered a highly prospective market for major enterprises within the supply chain.
"At the end of August 2016, Taiwan’s cumulative PV capacity was 980MW,” noted EnergyTrend analyst Celeste Tsai. “The newly installed PV capacity per month on the island during the past one and a half years was usually no more than 20MW on average. To achieve the 2025 target of 20GW will therefore be an enormous challenge.
One of the major challenges that need to be addressed is the limitations of the local power grids. Taiwan’s Ministry of Economic Affairs has made the expansion of transmission lines and related infrastructures a priority before accelerating the installation of PV systems. With its two-year PV promotion project, the ministry expects 910MW of rooftop PV systems and 610MW of ground-mounted PV systems to be installed before the end of June 2018 (collectively a total of 1.52GW).
"Even if the two-year target has been achieved on schedule, Taiwan will still need to expand its installed PV capacity by a CAGR of about 30%, or 2~3GW annually, from 2018 to 2025 in order have a cumulative capacity of 20GW,” said Tsai. “The government will have to dramatically step its efforts as the island only increased its installed capacity by 220MW annually on average from 2014 to 2015. At the same time, various related problems have to be dealt with, including the acquisition of land for PV projects, the construction of transmission lines to connect these projects to the grid and the financing of the projects.”
Domestic manufacturers with PERC cell capacity will benefit from FiT rate bonuses
Additionally, Taiwan’s Bureau of Energy, which is under the Ministry of Economic Affairs, has recently adjusted next year’s FiT rates to favor high-efficiency PV modules. While FiT rates for PV projects in 2017 will be 3~6% lower compared with the rates in 2016, projects that use high-efficiency modules will receive an additional 6% bonus. Therefore, projects that deploy high-efficiency modules will see their 2017 FiT rates matching or exceeding the rates of the prior year. In areas where installations for distributed PV systems are relatively low, such as northern Taiwan and offshore islands, the bonus is even higher at 15%. On the whole, this policy incentive will certainly spur installation of rooftop systems across Taiwan over the next two years.
Tsai added: “Taiwan’s production capacity for PV modules is around 1.8GW and will be able to fulfill domestic demand for the short term. Furthermore, domestic manufacturers have the PERC technology that supply cells for high-efficiency modules. Therefore, they are going to be the main beneficiaries of the FiT rate bonuses.”
