The world's largest solar PV market installed over 43 GW of new solar power capacity in 2018, which is 18% less than the previous year's 52.8 GW, according to the China Photovoltaic Industry Association (CPIA), reported Reuters (see China Exited 2017 With 52.8 GW). This is higher than any solar analyst has forecasted. IHS, for example, which upped its solar forecast for China in November 2018 was still 3 GW short (see IHS Expects 40 GW PV In China In 2018)
The 43 GW of solar includes 20 GW of distributed generation capacity, taking the cumulative installed capacity of solar PV in the country to more than 170 GW, according to CPIA.
The report also includes an overview on the Chinese PV industry. In 2018, Chinese companies expanded their overseas module production capacity to 18 GW in 2018 compared to 10 GW in 2017, and for cells this addition was 12 GW last year, as against 9 GW in the previous year.
Polysilicon
According to CPIA, the country produced 250,000 metric tonne (MT) polysilicon during the course of 2018, 3% more compared to 2017, but polysilicon capacity utilization fell sharply post May 31, 2018 or 531 announcement regarding pulling back of subsidies. It was especially harsh on lower tier producers as they could utilize only 20% of their operating capacity. "Utilization gradually recovered, but remained under 80% for the year with tier one producers ending the year at ~50% utilization," said Philip Shen of Roth Capital Partners. China imported 12,5000 MT of polysilicon, bringing the number down by 20% YoY.
Wafer
As for wafer production, CPIA said it was 19% more on YoY basis at 109 GW in 2018. Tier 2 and 3 wafer producers could run their factories at 50% capacity in Q4/2018, but tier 1 manufacturers as GCL, LONGi, Zhonghuan and JinkoSolar managed to run at 80% utilization rate throughout 2018.
Cells
With 21% YoY increase in cell production with a total of 87 GW in 2018, tier 1 producers ran their factories at 70% throughout the year, but again for tier 2 and 3 manufacturers, the utilization rates fell to 50% by Q4/2018, coming down from 65% peak in May 2018.
Modules
China's total module production was 86 GW, up 14% YoY with tier 1, 2 and 3 producers ending the year at 70%, 60% and 50% utilization rate, respectively according to Roth. The Top 10 modules manufacturers in the country increased their market share to 60% in 2018. In the previous year, it was 55%. In all, total export of modules went up 30% from 2017 to 41 GW.
Reuters quoted CPIA Vice-Chairman Wang Bohua as saying the domestic and overseas trends have put a lot of pressure on the Chinese producers leading to fears of 'substandard producers' to promptly exit the market.
In early January 2019, the Chinese government provided clear signals that it will continue solar but in a more market based manner. It said that it won't continue with feed-in-tariff (FIT) for large-scale solar and wind power capacity, but gave a free hand to local governments if they wish to provide subsidies for projects in their regions (see Beijing Announces Solar Support Measures).
Beijing is also contemplating revising its 2020 solar PV target under the 13th Five-Year-Plan from 105 GW to somewhere between 210 GW to 270 GW (see China Discusses Higher 2020 PV Target). Roth suggests the government needs to issue 270 GW or more. "With 170 GW cumulatively installed at YE'18, a 270 GW target would suggest 50 GW of annual demand in 2019 and 2020," said Justin Clare of Roth.