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There are articles out with growth figures all over the place.  This one says 125GW in 2020.  I've seen others that say anywhere from 100 to 145.

I haven't done exhaustive research to confirm this, but my personal impression is past forecasts have usually been low.  The article also says the annualized 5-year growth rate is 7%--again I think that's quite low.  The impacts of climate change will only get worse.  Public pressure around the world will continue to increase the demand for renewables, and solar is now at a very attractive price point.  Add in the maturation of storage and smart inverters, and I don't see this train slowing down any time soon.

All this just IMHO, of course.

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1 hour ago, MVA said:

I think we cannot escape gloom-and-doom.... Latest China news:

https://www.pv-magazine.com/?utm_source=crossdomain&utm_medium=referral&utm_campaign=tabs

The only real news is the suggestion of 30-31GW for 2020 in that article. The reliance on coal  and expansion of coal was known as well as the intent of the government to lower the basic power costs for coal mentioned in the article.

 

That 30-31 GW  suggested in the article is below the 37.5GW in the slide that Klothhilde supplied in the article she linked to. That article she linked to had China at 30% of the 125GW Global demand.

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We've also now seen repeated statements from various sources, including some of the companies affected, that overseas markets are taking up the slack from China demand.  So China paring back, for whatever reason (regulatory reform or an increased reliance on coal--which really flies in the face of their air pollution problem) is NOT affecting the business of these companies--at least not yet.

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10 hours ago, solarpete said:

We've also now seen repeated statements from various sources, including some of the companies affected, that overseas markets are taking up the slack from China demand.  So China paring back, for whatever reason (regulatory reform or an increased reliance on coal--which really flies in the face of their air pollution problem) is NOT affecting the business of these companies--at least not yet.

https://www.bloomberg.com/news/articles/2019-11-20/china-set-for-massive-coal-expansion-in-threat-to-climate-goals

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Some candid talk about the dire situation of Chinese power plants.
http://guangfu.bjx.com.cn/news/20200106/1033849.shtml

200GW built.  150GW out of those have not entered the subsidy list and don't get any subsidy whatsoever.

Resale value of plants outside of the subsidy list is being calculated based on the desulfurized coal tariff.  This leads to prices that are 1/3 the initial investment or lower.

At the present nobody wants to buy a plant outside the subsidy list and nobody wants to sell either given the lousy pricing.

Feel free to believe this doesn't affect CSIQ and Jinko Power you guys.

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On 1/3/2020 at 6:48 AM, Klothilde said:

Energytrend forecasting 1.6% market growth in 2020:
https://www.energytrend.com/research/20200103-16099.html

WTH is going on you guys, where is the exponential growth you were all talking about?  We have supply expanding massively, so if demand doesn't grow as well that bodes horribly for prices and margins.

And yet as of yesterday here is IHS out with their 142GW demenad forcast for 2020.

 

http://news.ihsmarkit.com/prviewer/release_only/slug/bizwire-2020-1-7-solar-installations-to-grow-by-additional-142-gw-in-2020-seven-times-the-worlds-total-solar-installations-a-decade-ago

 

 

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2 hours ago, Klothilde said:

That is not enough.  We'd need something like 200GW if we want margins and earnings to expand.

I am fine with 17.5GW @ $0.23 ASP with 17.5% margins. That can yield juicy profits for JKS. Even a $0.22 ASP and 15% margins will have nice profits. On the other hand a company going forward with little projects and unprotected markets and half those sales will have issues.

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2 hours ago, SCSolar said:

...Even a $0.22 ASP and 15% margins will have nice profits...

This implies OPEX+NI per watt of 3.3 cts/W for break-even and 2.5 cts/W or so for your "nice" profits.

Reality check how OPEX+NI per watt has been trending for JKS:
2017: 4.6 cts/W
2018: 4.0 cts/W
2019 Q1-3: 4.1 cts/W

The flatlining above imo is logic since cost reduction levers for OPEX are limited compared to COGS.  Freight rates are a given and there's only that much you can do to increase sales efficiency.  Obviously your implied OPEX&NI of 2.5 cts or so is completely out of line with their trend over the last 3 years.  Trend suggests barely below 4.0 cts/W at best for 2020 which would put them clearly in loss territory at $0.22 ASP and 15% margin.

You have the right to reply.

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5 hours ago, SCSolar said:

And yet as of yesterday here is IHS out with their 142GW demenad forcast for 2020.

Exactly.  There's a wide range of forecasts out there.

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5 hours ago, Klothilde said:

That is not enough.  We'd need something like 200GW if we want margins and earnings to expand.

You don't need to expand margins for earnings to expand--if you expand volume while keeping margins the same, your earnings will increase.  That's exactly the business model we now see all solar poly/wafer/panel producers employing.  I'd say it's risky, but if you can pull it off, it'll work.  And since that's what everybody is doing now, it indicates their finance professionals think it's their best course of action.

Sure, if you can increase margins on top of that, your earnings will increase even more--but it's not absolutely necessary.

Do we need 200GW of global demand to keep everyone profitable?  Maybe.  But how much do we need to keep just the top players profitable?  So far, they're doing just fine with the demand we have now.

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1 hour ago, Klothilde said:

 

You have the right to reply.

17.5GW @ $0.033 GP /watt = $577.5M
current Opex = $128M/Q
3500MW @$0.01 shipping =$52M
5% current Opex reduction = $25.2M
$577.5-512-52-(-25.2)= $38.57M
Profits yep $1 before subsidies, cvd reversals, forex etc.

And that is worst case.


They are looking at 3-4GW at an ASP of $0.33 or more from the U.S.
A $0.22 ASP  would imply a $0.192 ASP for the ROW  for high efficient Mono Perc

That is not going to happen
Reality is they are going to have an ASP at the $0.235 or higher for the year with a clear bias for higher.

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16 hours ago, SCSolar said:

17.5GW @ $0.033 GP /watt = $577.5M
current Opex = $128M/Q
3500MW @$0.01 shipping =$52M
5% current Opex reduction = $25.2M
$577.5-512-52-(-25.2)= $38.57M
Profits yep $1 before subsidies, cvd reversals, forex etc.

And that is worst case.

Your shipping is too low imho and you don't factor in any incremental selling cost associated with 25% higher shipments.

Shipping and handling was $0.013/W in 2018 (20-F).  Note that China shipments have come down since then and freight rates are currently exploding:
https://www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/world-container-index-assessed-by-drewry

You assume the sales force will deliver 25% higher shipments at lower cost yoy.  Realistic if you start whipping them but I think that would be illegal in most countries.

Also note they're expanding equipment leasing which will probably blow up OPEX further.  Lastly interest expense should increase as they take out additional loans for CAPEX and working capital.

 

 

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I wonder how real the price point is in theis article. Perovskite modules for 0.7RMB next year. That is $0.10 and on the low end of the $0.10-$15 range suggested in prior articles. They are also talking low light absorption as making a 18% efficient cell generate the power of 21% Csi. and 20% (expected next year) generating the same as 23% CsI power overall. This price point and low light power production is direct competition to FSLR at what appears to be a 40-50% lower price point than the FSLR S6.

 

http://guangfu.bjx.com.cn/news/20200110/1035582.shtml

 

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Sounds like cheap hype.  Remember that as a rule of thumb everything GCL touches turns into *hit.  We've seen it with FBR technology and we've seen it with cast-mono.  Since they are at the brink of bankruptcy because of their reliance on multi they now need a "magical" new tech to lift the hopes of everybody.

And what's up with this selective trashing of FSLR?  If a new technology emerges that is half the cost of current PV then the Chinese will go belly up first because their costs are comparable to FSLR but their balance sheet is crap compared to Firstes.

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7 hours ago, SCSolar said:

Perovskite modules for 0.7RMB next year....This price point and low light power production is direct competition to FSLR at what appears to be a 40-50% lower price point than the FSLR S6.

 

http://guangfu.bjx.com.cn/news/20200110/1035582.shtml

 

My concern with Peroskite is over how long they last.  Cheap, cheap, modules but if they crap out in 2, 3 or even 5 years, you will pay 10-20x the module cost installing and replacing (and installing and replacing) them.  Not that I am defending FSLR...

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1 hour ago, disdaniel said:

My concern with Peroskite is over how long they last.  Cheap, cheap, modules but if they crap out in 2, 3 or even 5 years, you will pay 10-20x the module cost installing and replacing (and installing and replacing) them.  Not that I am defending FSLR...

We shall see, supposedly GCL has cracked the degradation issues. Only time will tell but their roll out schedule would suggest they are confident that they will have the lifespan needed.

 

"https://www.wsl-solar.com/Product_News/2019/0304/PV-modules.html

Although there are many advantages over crystalline silicon cells, perovskite solar modules have fatal drawbacks, which is the main reason why this type of solar module is still not used on a large scale. First, the area of perovskite solar modules is difficult to enlarge. Currently, the area of perovskite cells developed by the laboratory is very small, and it is difficult to mass-produce. Secondly, the perovskite solar modules are relatively unstable and their core The layer is susceptible to external influences such as temperature and humidity, and the efficiency is greatly degraded.

Why is the perovskite solar module of GCL Nano's trial production extremely disruptive? Because they overcome the above two major defects of the perovskite solar module. First, the size of the perovskite PV module manufactured by GCL Nano's 10MW pilot line reached 45cm*65cm, which has the potential to be applied in large-scale power plant projects. Secondly, the working life of the module is expected to reach more than 25 years."

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Hmmm....well if GCL is willing to back that up with a 25 year performance warranty, I might give them a look.  Not holding my breath.

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surprisingly low Chinese module exports in December you guys.  Even down yoy.  And this comes after a very soft November as well.
http://m.solarzoom.com/article-135762-1.html

Now how can we spin this?  Is this a softening of the global market after we've had some bubbles bursting?  I'm thinking of markets that went from boom to bust like Vietnam, Ukraine, Spain.  Or is this just noise and we'll have rampant growth starting in January again?  Totally confused you guys.  Fact is exports are low two months in a row and pricing is at rock bottom and not recovering.

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16 hours ago, Klothilde said:

surprisingly low Chinese module exports in December you guys.  Even down yoy.  And this comes after a very soft November as well.
http://m.solarzoom.com/article-135762-1.html

Now how can we spin this?  Is this a softening of the global market after we've had some bubbles bursting?  I'm thinking of markets that went from boom to bust like Vietnam, Ukraine, Spain.  Or is this just noise and we'll have rampant growth starting in January again?  Totally confused you guys.  Fact is exports are low two months in a row and pricing is at rock bottom and not recovering.

I think the market is fully valued at this point. I believe it was Shen who the other week noted that with the run up in JKS, that it became fully valued with no upside. Based on recent downgrades on FSLR to $49, the market should drift lower as we are now 6 months or so from visibility into 2021/2022.  Once the tariff protection is removed or enough capacity is in the U.S. FSLR becomes a major failure likely  

FSLR is looking a a double whammy as the tariffs will be down to 10%  reducing incentives for power companies and most likely the solar tariffs will be removed. If  a Democrat gets elected, the solar tariffs will be removed sooner rather than later.

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But what if FSLR gives a juicy EPS guidance during the next con call? And what if the CN2 guide lower margins in Q1? Ever thought of that? Because it will be the Chinese selling for 23 cents in no time and not FSLR. Just picking your brain here.

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6 hours ago, Klothilde said:

But what if FSLR gives a juicy EPS guidance during the next con call? And what if the CN2 guide lower margins in Q1? Ever thought of that? Because it will be the Chinese selling for 23 cents in no time and not FSLR. Just picking your brain here.

Both JKS and CSIQ should have significant shipments to the U.S. as well. Jinko is targeting up to 4GW of shipments to the U.S. in 2020 from their last con call. The $0.23 ASP will not be for them with that level of shipments.

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12 hours ago, SCSolar said:

US to install 24GW (DC) in 2020 based on 18.5GW (AC) installations. So remember when looking at installations of projects, that is usually AC based. That 120GW of projects is really 155GW DC. If 140GW is reached, that is really 181GW.

 

http://guangfu.bjx.com.cn/news/20200119/1037518.shtml

Oh it would be great if we had been underestimating the market by 30% but I'm sure that's not the case.  AC wattage is commonly used in some countries when dealing with individual projects where the peak AC wattage at the interconnection point is more important for grid integration purposes than the DC nameplate rating of the modules.  When looking at overall market installation figures the DC nameplate rating is usually applied.  I suspect EIA throws out an AC figure because their database is an aggregation of AC project power ratings reported to the grid operators.  Check out the SEIA / WM U.S. market reports to see for yourself whether they use AC or DC:
https://www.seia.org/research-resources/solar-market-insight-report-2019-q4

 

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