Chinese Government has announced a series of supportive policies to save its solar industry that has been struggling since 2012.
Recently, a target of installing 10GW in 2013 has been set at China's National Energy Conference in which the participants reiterated the government's commitment to the development of distributed solar system in China. Most enterprises in China begin to dump their solar assets despite the good news from the government.
Shanghai Aerospace Automobile electrochemical Co.,Ltd in China has planned to sell its 20% share holdings in Zhonghuan PV Material Co.,Ltd in Inner Mongolia at a price no less than 20% of the net assets value of Zhonghuan PV Material Co.,Ltd. With the competition in the PV industry intensified and the adoption of the Entering Requirements to the Polysilicon Industry in China, a growing No. of enterprises will quit from solar businesses.
A insiders note that: the capacity for solar module in China is about 40 to 50GW, a target of 10GW is from reaching a balance between supply and demand. The worst has yet to come as the EU will announce its rulings on whether to impose anti-dumping tariff on solar products imported from China in May,2013 when more enterprises will be driven out the solar industry.
Toxic assets of polysilicon?
Companies that emerge from the solar boom in the past have been seeking to develop other business areas in an effort to offset the losses incurred from its solar business.
Shanghai Aerospace Automobile Electrochemical Co.,Ltd has been dumping its solar assets from the second half of 2012.In a statement on its website, Shanghai Aerospace Automobile Electrochemical Co.,Ltd plans to transfer 29.7% shares of China Silicon,a company that suffer huge amount of losses of 660millon Yuan since its establishment at a price of 488Millon Yuan.
We cannot stand to lose money as the spot market of Polysilicon has fallen sharply over the past years,a staff from the company says.
The main business of China Yingli Green Co.,Ltd are solar module production and solar power station.The companies saw a losses of 959million Yuan with its shipment down by 17% year on year. Yingli begins to develop other business such as animal feeding, real estate, logistic, clothing as well as hotel.
A spate of the bankruptcy of solar company to be seen in 2013
Polysilicon companies at the upstream of the solar industry have largely halted their production activity, such trend is spreading to cell and modules factories at the downstream of the solar industry.
Solar products produced in China are exported to other country before in 2009.After the polit project was launched in the Xinjiang Autonomous Region in the summer of 2009,domestic installation in china is has increased by 10 folds, with prediction for this year hitting 5GW.
However, an insider thinks that the number from the government is lack of the accuracy. He notes that less than 70% of the projects covered by the Golden Sun Projects has achieved grid parity. He complaints that the many policies that can neither be confirmed or implemented by the government have discouraged the enthusiasm of the solar companies in China, leading to the suspension of the construction of many solar power stations. Such situation not only drags down the sales of the solar modules of many solar compaies that has been saw high level of inventory.
A solar developer in China also complains that many supportive polices are not or partly implemented as government body resists to protect its interests.
Only a proportion of the electricity produced from solar in the Northwestern Region in China can sold to the State Grid which delays the payment for the electricity and red tape has dramatically slow down the development of solar industry in China.
Return on investment for a solar power station can be as high as 8% to 10% a year when solar companies in China begin to develop a solar power station. However, almost all the solar companies in China are suffering from losses.
Banks are reluctant to provide loans to the development of solar power stations in China as the ROI is unstable and unpredictable. Companies developing solar power stations can only depend on themselves to solve all the financial problems and since all the FIT is still invisible in China, many solar companies have been hesitate to built any solar power stations at all.