- NEA of China in a seminar reportedly discussed progress of PV under current 13th Five-Year Plan and hinted at increasing the country’s overall 2020 target from 105 GW
- Apparently, NEA is looking at increasing the target to at least 210 GW, or take it even to 250 GW or 270 GW
- If the target is increased to2 250 GW or more this could translate to annual additions of 40-50 GW in 2019 and 2020
There is a flicker of hope for many solar companies whose business and future prospects were rattled by the Chinese administration’s abrupt and unexpected subsidy cuts for large scale PV development in May 2018. In consequence, silicon to module prices collapsed, a glut of cheap modules flooded the international markets, and several solar analysts started to hyperventilate, the worst was Goldmann Sachs, which forecasted global solar market demand to collapse to 75 GW, down from nearly 100 GW in 2017. Chinese market research firm AECEA, for example, lowered its 2018 forecast for PV in China down to 30-35 GW and to 20-25 GW for 2019 and 2020.
But that might have been an over-reaction. At least, there are signs the world’s largest solar power market is looking at an upward revision of its 2020 solar power target under the country’s 13th Five-Year Plan, from the current 105 GW to at least 210 GW, or even 250 GW or 270 GW by 2020. According to media reports, the National Energy Administration (NEA) apparently discussed these plans in a seminar that evaluated the progress of solar in its current five-year plan. The Energy Research Institute of the National Development and Reform Commission (NDRC), China Electric Power Planning and Engineering Institute (EPPEI) and other institutions will conduct detailed investigations on the adjustment of the plan, to make ‘suitable adjustment in the near future,’ according to PV Infolink.
A revision of the overall target is needed since the country has already exceeded its 105 GW 2020 target in 2017. In September 2017, its cumulative installed PV capacity even reached 165 GW after 34.54 GW of new PV capacity were added in 9M/2018 (see China Installed 34.54 GW PVIn 9M/2018).
PV Infolink says in case the target is increased to 250 GW or more, China would install 40 GW or more annually during 2019 and 2020. However, an adjustment to 210 GW would mean only 20 to 25 GW of annual additions.
Analysts from Roth Capital Partners currently forecast China to install 40 GW in 2018 and 35 GW in 2019. In case the target is increased to 270 GW, they see a market of 50 GW or more in 2019 and 2020. “To reach the higher target, some in China believe that the government could increase the DG target to 20GW, set a C&I target to 10 GW, and not cap resi. These options appear highly likely. Additional options include reopening of local installation targets and increasing the Top Runner program. Overall, this is a positive and welcomed good news for the solar industry,” said Philip Shen of Roth.
During the discussions, NEA reportedly also made it clear that the government will continue to support solar power development with subsidies until 2022. However, neither the level nor the volumes are known.