Trade Resources Industry Views PV Systems Markets Heats up Due to Growing Demands

PV Systems Markets Heats up Due to Growing Demands

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China’s domestic PV demand continues to rise in May. Hence, the leading PV companies are now expanding their businesses into the downstream sector, focusing on PV system in particular. This in turn drives the capacity expansion efforts along the entire supply chain, according to EnergyTrend, a division of TrendForce.

EnergyTrend’s analyst Angus Kao said leading, vertically integrated PV companies such as Canadian Solar and Trina are expanding their capacities mainly by outsourcing. Their secondary method is to work with medium and small-size manufacturers of cells and modules. Investing in their own capacities is considered to be their last resort. The leading PV companies are also tightening their hold of the downstream channels by setting up system service companies that would allocate the end demand back to them. On the other hand, the system market is also receiving new entrants that aim to capitalize on the future growth of China’s rooftop PV systems. They include major Si wafer manufacturers like China-based GCL and LONGi. Presently, these players from the Si wafer industry are not only adding their mono- and multi-Si wafer capacities, but they are also taking on many system projects. The aggressive expansion into the downstream will secure market shares and channels. Moreover, this strategy will reduce risks for the PV solution providers and accelerate their positioning efforts in the market.

Many companies have seen positive results of branching out into different business models within the industry. However, Kao points out that the fiscal reports show profits for modules have plummeted while the overall revenues have reached record high. The industry’s biggest worry right now is still the ongoing price declines in the downstream market due to excess capacities.

Cell manufacturers ready to raise their prices as demands return

The spot prices for polysilicon remain weak since China’s polysilicon imports rose in the first quarter, resulting in a glut. According to EnergyTrend’s estimation, China has nearly two months’ worth of stock. Nevertheless, there is a chance that the reduction of polysilicon stock will accelerate as the leading PV companies are preparing for the coming system projects. On the whole, the average polysilicon spot price for May is projected to be within the range of US$15-16/kg.

Si wafer prices are expected to fall in May, with the high-efficiency multi-Si wafers to be around US$0.80-0.81/pc. Falling polysilicon prices and calls from clients (who have experienced losses) have pushed down the prices for multi-Si wafers. The prices for mono-Si wafers also continue to fall in correlation with polysilicon prices and lack of visible rise in demand. Currently, the leading PV companies are the main support of the Si wafer demands, albeit indirectly by outsourcing cell manufacturing for their system integration projects.

PV cell manufacturers, which have seen fiscal losses, are also ready to raise their prices in anticipation of the returning demands. Cell manufacturers will likely to increase product prices to the point where they are able to recover cash costs. The average price in May for high-efficiency multi-Si cells from China and Taiwan will hold steady around US$0.295-0.31/w. However, multi-Si cells outside of this category have seen their demands dropping steadily this month. Their average price will fluctuate narrowly in the low range of US$0.28-0.29/w.

Prices stay relatively stable in the PV module market. The top-tier module makers are nearly loaded in their capacities and are sending orders to the second- and third-tier manufacturers. Thus, module prices for May will be not much different from April and any changes will be mainly linked to the prices of polysilicon, Si wafers and PV cells.

Source: http://pv.energytrend.com/price/20150514-8769.html
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Market for PV Systems Heats up Due to Growing Demands in China