China solar module exports jump in first three quarters of this year

China’s solar module exports rose to the equivalent of 58 gigawatts (GW) of capacity in the first three quarters of 2019, compared to 41.6 GW for all of 2018, as a slowdown at home pushed panel sales overseas, an industry association said.

Wang Bohua, vice-chairman of the China Photovoltaic Industry Association, also told a conference on Thursday that the value of the country’s solar component exports hit $17.74 billion over the first three quarters (nine months) of 2019 and could exceed $20 billion for the whole year, an increase of 25% over 2018.

Europe accounted for 34.9% of the export sales in the first three quarters, and the United States only 0.2%, Wang said.

US President Donald Trump’s administration implemented a four-year tariff regime on solar panels in 2018, an opening salvo in a trade war aimed at helping US manufacturers rebound from years of decline due to foreign competition.

Beijing said in May last year it would wind down subsidies to the nation’s solar industry to reflect rapidly declining construction and generation costs. It also sought to tackle a spiralling payment backlog amounting to more than 100 billion yuan ($14.2 billion).

China has been trying to achieve what is known as “grid price parity”, in which renewable energy suppliers are capable of competing subsidy-free with coal-fired power generators.

New capacity additions in China came in at 15.99 GW in the first three quarters of 2019, Wang said. New installations for the year were expected to reach around 25-30 GW this year, down from a record 53 GW in 2017 and 44 GW in 2018.

Most of the capacity added in 2019 has been subsidy-free, and all new projects are expected to operate without government support by 2021.

Executives have warned the subsidy cuts would lead to a slowdown in new capacity for around five years. CPIA’s Wang, however, said installations could recover by next year.

“We aren’t optimistic about new installations this year,” Wang said, noting that the association’s initial minimum expectation at the start of 2019 was 35 GW.

“We expect installations to be more next year, at least 40 GW,” he said.

Total solar module production hit 75 GW over the nine months, up 32% from a year earlier, suggesting domestic manufacturers are confident that overseas orders can offset declining demand at home.

But Wang said the industry would see some consolidation, with some smaller producers still expected to leave the market.

China’s exports are expected to have risen for the first time in four months in November, a Reuters poll showed, though a protracted trade row with the United States and slack global demand mean a sure-footed turnaround in shipments is some way off.

Exports by the world’s second-largest economy likely rose 1.0% from a year earlier last month, according to a median estimate from a Reuters poll of 20 economists, improving from a 0.9% drop in October and marking the first pickup since a 3.3% rise in July.

Imports are forecast to have dropped 1.8% from a year earlier in November, also a slower rate of decline from the 6.4% slump the month before, the poll showed.

Beijing and Washington remain locked in weeks of negotiations to ink an interim “phase one” trade deal aimed at de-escalating the 17-month-long dispute that has led to tit-for-tat tariffs. US President Donald Trump said on Wednesday that trade talks are “going well,” a day after spooking markets with a warning that the deal might have to wait until after the November 2020 US presidential elections.

The trade row between the world’s two biggest economies has weakened corporate profits, investment and global growth.

Washington has given no indication that it plans to scrap new tariffs on $156 billion worth of Chinese imports scheduled for Dec 15, which could torpedo the negotiations. US legislative action supporting Hong Kong protests and condemning the camps for ethnic Muslim minorities in the Western Chinese region of Xinjiang have also angered Beijing. “Should the tariffs take effect as planned, a phase 1 deal would be very much in doubt,” Commerzbank analyst Hao Zhou and economist Bernd Weidensteiner said in a note published Wednesday. “Then, the markets could repeat the massive meltdown as happened in last December as President Trump kept up pressure on trade issues.”

Chinese foreign ministry spokeswoman Hua Chunying warned on Wednesday the Xinjiang bill will affect bilateral cooperation and that China will take “decisive” countermeasures to defend its interest if what she called U.S. protectionism and bullying over trade continues.

Reuters