Date: 26/09/2012

Taiwan’s domestic solar demand weakened by the steep dive in FiT, says TrendForce

Taiwan’s Ministry of Economic Affairs has announced the results of the 7th Solar Power Equipment bidding on September 12. The installed capacity of bid winners amounted to 0.8MW.

There is no capacity left for another bid after the 7th bidding but some manufacturers are expecting more capacity from the infrastructure sector to be released in the fourth quarter of 2012. According to EnergyTrend, the reputation of biddings in the infrastructure area remained high this year and hence there may be no extra capacity offered in 4Q12.

According to information released, the average discount rate of the 7th bidding went up to 12.74%, a 169.34% boost compared to 6th’s 4.37%. Certain manufacturer’s discount rate has reached above 13%, showing some system integrators are willing to cut down profits in exchange for orders. Related companies noted that the most aggressive bids were in the 100kW and 499kW sectors. Given the current FiT (Feed-in-Tariffs), manufacturers’ profit margin is to take a serious hit. Moreover, the price setting process of 2013’s electricity price is about to start, and the sharp drop in the average discount rate may result in a drastic plummet in 2013’s solar feed-in tariffs. Related players stated that there have been different perspectives about the decrease of 2013’s solar FiT, and most people believe it is going to fall between 5% and 20%. Regardless of what the percentage decrease will be, FiT of both 100kW and 499kW may fall below NT$7/kWh. Related players pointed out that due to the fierce competition and manufacturers’ price cuts, the focus in 2013 may shift from 100kW-499kW sector to 30kW smaller-scale system sector.

Chinese solar manufacturers have detained the opportunity to digest their inventories due to the gray area in the European Union’s anti-dumping investigation. Conversely, due to the absence of prominent rebound for demand, recently certain manufacturers have been disposing excess raw materials on the spot market – for instance, cell makers have been selling wafers, while wafer makers are attempting to cut down polysilicon inventory, which put on more pressure to the spot prices and caused them to fall further.

The lowest polysilicon price came down to $17.9/kg, with ASP dropping to $19.042/kg, a 2.62% dip. As for multi-Si wafers, spot prices in China fell between $0.92/piece and $0.96/piece; Taiwanese manufacturers said the lowest global price fell to $0.88/piece, with global ASP remaining above $1.0/piece. Affecting by the persisting downtrend in China, multi-Si wafer ASP slid to $0.958/piece, a 3.23% drop. As for mono-Si wafers, due to suppliers’ proactive approach towards price negotiations, the lowest price fell to $1.08/piece and ASP plummeted to $1.203/piece, a 5.13% decrease. As for solar cells, Chinese manufacturers have offered more room for price negotiations in order to digest inventories, so the cell spot prices ranged between $0.37/Watt and $0.39/Watt, with ASP declining to $0.385/Watt, a 1.79% decrease. As for solar modules, due to Chinese manufacturers’ inventory digestion, ASP dipped to $0.674/Watt, a 1.89% decrease.

Recently certain Chinese module makers have shut down their production lines. EnergyTrend notes that Chinese manufacturers’ consumption rates have been on a decline with idle capacity remaining high, suggesting that their downsizing effort, which will have limited impact on the worldwide PV market, was merely a solution to deal with the unused capacity.

Source: TrendForce