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JASO Q1 ER 2014


86 replies to this topic

#81 explo

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Posted 09 May 2014 - 03:43 AM

Aren't these projects in China, with lower margins? I'm really concerned about the even lower GM's these will likely bring in the future...

 

I don't think GM is very low for China anymore. With national FiT the price remains solid, so it is a question of cost and it seems based on Jinko and Trina that cost levels for EPC are now down to a level that renders around 20% GM (China EPC is still a maturing market so cost will improve quickly compared to e.g. Germany which has matured). The big difference is the ASP. With an Ontario 1.0 FiT project having 2.5 times higher ASP (than a China national FiT project) and that causing 30% GM at today's EPC cost the gross profit per watt is 4 times higher at up to $1.20 compared to up to $0.30 in China. So to make the money made on a 10 MW project in Ontario you need a 40-50 MW project in China.


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#82 nanofrogfish_spf

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Posted 09 May 2014 - 04:10 AM

explo, I'm really confused now. Are you worried about what GM's projects will bring in the future (especially in China were competition is high), or aren't you? You can't have it both ways...being honestly worried when it's one company, but it's a huge plus to highlight if it's another company...even if it's much farther behind the curve and trying to copy the first?

 

And wouldn't you expect that the company with the higher bankroll would be the one with the best chance of success in the project segment down the road?


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#83 explo

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Posted 09 May 2014 - 05:21 AM

explo, I'm really confused now. Are you worried about what GM's projects will bring in the future (especially in China were competition is high), or aren't you?

 

I'm not worried about GMs in China, since the national FiT program there was launched at a long-term sustainable level. Where did you get the impression that I fear that China FiT at 13 cents would experience the boom-bust pattern of markets that launch FiT programs at 40+ cents (causing overheating and severe FiT cuts pressuring an overestablished national downstream market)?


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#84 Makan

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Posted 09 May 2014 - 05:31 AM

I'm not worried about GMs in China, since the national FiT program there was launched at a long-term sustainable level. Where did you get the impression that I fear that China FiT at 13 cents would experience the boom-bust pattern of markets that launch FiT programs at 40+ cents (causing overheating and severe FiT cuts pressuring an overestablished national downstream market)?

 

Will these FIT effectively be paid out in cash at the end without much curtailment? That is more a concern I guess. The amount is high enough on paper when Jinko builds plants at 1.10 USD/Watt.


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#85 explo

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Posted 09 May 2014 - 05:38 AM

Will these FIT effectively be paid out in cash at the end without much curtailment? That is more a concern I guess. The amount is high enough on paper when Jinko builds plants at 1.10 USD/Watt.


They will. It is national law. Implementation of payment routines have been a bit slow.
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#86 sunnysky

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Posted 09 May 2014 - 05:42 AM

They are being paid as Jinko has confirmed a few times by now.


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#87 explo

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Posted 09 May 2014 - 05:49 AM

They are being paid as Jinko has confirmed a few times by now.

 

Yes the national government put pressure on grid companies in different regions around mid last year to get the routines in place. Anyway several project sales by SOL, Trina etc. in China show that the market for PV plants at decent pricing (meaning good GM at the cost level Jinko has disclosed) is there.


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