This year, the 7th SNEC International Photovoltaic Power Generation Conference & Exhibition, which opened on May 14th in Shanghai, saw a sharp drop in the number of participating PV companies and audience members, reflecting a tough past year for the global and the Chinese solar industries. Faced with the coming EU preliminary verdict on alleged dumping from Chinese solar companies, which is set to take place in early June this year and is expected to bring about a round of EU-Sino trade wars with heavy casualties on both sides, the Chinese solar manufacturers are actively shifting their growth focus away from manufacturing and the EU market toward solar power plant development and emerging markets.
Exhibition and Conference Gone Cold
By every measure, SNEC PV Power Expo remains the largest and the most important annual industry event in the world. On May 13th, representatives of PV industry associations from Europe, the US, Australia and Asia all attended the International PV Industry Association Roundtable Conference in the morning. Industry leaders including Gao Jifan, Chairmen and CEO of Trina Solar Limited (ADR) (NYSE:TSL), and Tong Xingxue of LDK Solar Co., Ltd (ADR) (NYSE:LDK) attended the Global PV Leaders Dialogue in the afternoon as well.
However, this year, participants of the International PV Industry Association Roundtable Conference numbered at a meager 50 or 60 representatives, and only around 200 people in total attended the Global PV Leaders Dialogue in the afternoon. Conspicuously absent were industry heavyweights including Miao Liansheng of Yingli Green Energy Hold. Co. Ltd. (ADR)(NYSE:YGE), Yang Huaijin of Hareon Solar Technology Co Ltd (SHA:600401), and Qu Xiaohua of Canadian Solar Inc. (NASDAQ:CSIQ). Compared to last year’s packed halls and conference rooms, this year’s events proved a shadow of their former glory.
The exhibition also saw a noticeable shrinking in scale. Only 13 pavilions were opened for this year’s event, compared to last year’s 17, with important names missing in this year’s exhibitors, such as Trina Solar, which is among the top five biggest solar module manufacturers in the world.
According to an employee of a top-10-ranking solar cell manufacturing company, “If it were not for the fact that our spot was purchased in advance last year, we wouldn’t have come this year either. We can only expect to garner some goodwill from being present this year. So far we haven’t received any actual orders from the exhibition.”
Divergent Reactions Toward EU Sanctions
With regard to the impending EU anti-dumping and anti-subsidy penalties against Chinese solar manufacturers, while world solar industry associations remain adamant in their objection to such measures, the Chinese solar industry on the whole is biting the bullet and actively shifting their strategies to minimize the damaging impacts of future EU sanctions.
Eliminating trade barriers was the central topic of this year’s International PV Industry Association Roundtable Conference. The consensus among the representatives from the world’s PV industry associations was that international trade disputes should be resolved constructively through dialogues. Among the participants, Shi Dinghuan, consultant to China’s State Council and Director of Chinese Renewable Energy Society, pointed out that the Chinese PV industry is inextricably linked with industries in other parts of the world, and that the raising of trade barriers will eventually prove to be detrimental to every party involved – a point that was echoed by both the European PV Industry Association and the US Solar Energy Industries Association (SEIA).
An official from SEIA declared that conflicts and opposition could not resolve the environmental and energy crises facing the human race, but collaboration could, and that the global PV industries depended on each other for their collective survival.
A Joint Declaration of the Global PV Industry was announced at the end of the conference.
On the other hand, Chinese PV executives did not appear to be as enthusiastic about standing up for basic free market principles. Collectively, they are actively adapting themselves to the changing tide of the industry and imminent trade barriers by diversifying markets and shifting growth focus.
According to Wang Haisheng, analyst at Minsheng Securities Research Institute, in the mid-run the EU sanctions will not have a long-lasting effect on market prices and demand-supply balance. The EU PV market is becoming less significant on the world stage against emerging markets such as China, Japan, India, Southeast Asia, Latin America and the Middle East. Its share of the market has shrunk to 25% from last year’s 50%. If the EU enacts provisional duties of 30% to 40% in June, the resultant loss of annual shipment of 4 GW for the Chinese manufacturers will be easily compensated by a combined 25 GW of shipment that is expected from both domestic and other emerging markets in 2013.
Chinese PV executives largely voiced agreement with this analysis.
“There’s nothing to be afraid of. There’re tons of new markets,” said Yao Feng, vice president of Jinko Solar Holding Co., Ltd. (NYSE:JKS), whose company this year has won orders of 100 MW from Africa, 200 MW from Japan and an estimated 500 to 600 MW from the domestic market so far. “Add in the revenues from other new markets, we expect to more than make up for the 30% we have in Europe.”
Similarly, Canadian Solar intends to bypass EU sanctions by shifting the manufacturing of Europe-bound products entirely to its factory in Canada, while focusing more on markets in Japan, India and Thailand.
Meanwhile, power plant development is becoming the next hot growth engine for many Chinese PV enterprises. Companies that have managed to stay afloat amid the past year’s market woes, such as Astronergy, a subsidiary of Zhejiang Chint Electrics Co., Ltd (SHA:601877), Trina Solar Limited (ADR)(NYSE:TSL) and Canadian Solar, both cite downstream power plant development in low-risk countries with favorable FIT policies as one of the main reasons for having avoided a head-on collision with the market.
“With the dynamic policy support of the Chinese government and the improvement of grid-connect and subsidy schemes, the Chinese power plant development sector is expected to see exponential growth in the future,” comments Wang Haisheng.
