IHS says China PV company list will not unduly impact global industry
On December 30, 2013 the Chinese Ministry of Industry and Information Technology published a list of 109 companies meeting newly created "˜PV industry standards'. IHS does not believe that this list will have major implications for global photovoltaic markets.
The new PV industry standards might stimulate consolidation among small Chinese photovoltaic suppliers.
"The recently published Chinese "˜PV industry standards' will only have a minimal effect on global photovoltaic markets," says Jessica Jin, solar analyst at IHS. "The government's policy will accelerate consolidation amongst smaller suppliers, but will hardly have any impact on total available production capacity."
"The published document aims to offer guidance and recommendations for PV stakeholders rather than representing a list of permission licenses," explains Jessica Jin. "The Chinese government is very unlikely to actively push companies not on the list out of business." IHS does foresee some impact for these companies nevertheless. In particular the smaller ones will struggle to secure financial support from banks, or receive governmental export tax refunds. Additionally they may not qualify for project bidding in China.
Large companies not on the list will not necessarily be harmed. The list will be reassessed on a half-yearly basis, and several of them may be included in one of the following rounds. Major cell maker Shunfeng did not even apply during the first round, however, the company is enjoying good profits from its monocrystalline cell operations and expects booming business in 2014 and it does not see any negative consequences of the list as a result. LDK is another major supplier not meeting the official criteria straightaway, but IHS nevertheless expects governmental support for it to continue.
Whereas the new PV industry standards might stimulate consolidation among smaller Chinese PV suppliers, IHS does not see a major consolidation of capacity and forecasts only a minimum influence on the global PV supply chain. According to IHS' new report entitled "IHS Solar PV Integrated Market Tracker "“ Q4 2013" the 109 companies on the list account for 92% of Chinese polysilicon manufacturing capacity, 94% of Chinese wafer capacity, 95% of Chinese cell capacity, and 93% of Chinese module capacity. Even in a highly unlikely "˜worst case' scenario assuming all other companies to exit the PV business during the course of 2014, the impact on global PV supply will be very small. Compared to other risks associated with PV markets in 2014 "“ notably the unclear situation for demand in Japan "“ it will be negligible.
In September 2013, the Chinese MIIT (Ministry of Industry and Information Technology) had announced new PV industry standards defining a variety of conditions ranging from manufacturing capacity and utilization to technological and environmental criteria. On December 30, 2013 the MIIT published a final list of 109 companies that passed the examination and officially meet these standards. Most, but not all major PV suppliers are included. Prominent exceptions are LDK, Shunfeng, ET Solar, CNPV, and Tianwei.
