10 May 2010
The 2009 shockwave that hit most of the electronics assembly industry also took its toll on the previously booming solar industry. The good news is that the ramp up that we have experienced in recent months has been as dramatic as the 2009 crash.
Much has been said about the reasons for this but politics, as always, has certainly played a significant part.
There are two issues currently hanging in the air rather like the Sword of Damocles; the threatened feed-in tariff reductions in Germany, and the so-called anti-dumping sentiment doing the rounds in the European Union.
“Politicians need to tread very carefully before taking steps to limit imports – a decision that is likely to have a serious, detrimental effect on equipment exports.”
The rush to beat any German tariff changes has without question driven volumes higher. And, a nervous Chinese industry waits to see if the EU will act on the pressure to introduce import restrictions on PV panels from Asia.
At a couple of industry round-table meetings I attended recently, there was clearly concern if not anger, especially in Germany. The feeling is that Germany is subsidising the PV industry and, furthermore, that panel manufacturers (predominantly in China) are having a free ride.
The incontrovertible truth is that most solar panels are made in China and most are installed in Germany and Spain. However, it is equally true to say that much of the equipment used to manufacture cells is designed and built in Europe and exported to China. Politicians need to tread very carefully before taking steps to limit imports – a decision that is likely to have a serious, detrimental effect on equipment exports. I for one am certainly lobbying the UK politicians against such a move.
In Shanghai recently, Dr. Wang from China’s National Development and Reform Commission gave a very informative presentation on the country’s plans for internal solar consumption, offering some hope that this will begin to increase before too long. Currently, grid distribution represents the biggest obstacle to growth, together with an agreement on tariff. Dr. Wang indicated that this might be settled in the next three years, anticipating 100GW by 2020.
Of course, the real future for PV does lie with China and the US. Both have been slow to embrace the incentives necessary to drive high levels of PV installations. China especially needs to accelerate its published plans for local use, which will increase overall efficiency and begin to redress the balance with Europe - thus removing ammunition from those who would seek to implement import controls.
“The real future for PV does lie with China and the US. Both have been slow to embrace the incentives necessary to drive high levels of PV installations.”
And now we have the volcanic ash cloud to further complicate our lives! We have already experienced delays for parts coming into the UK, while shipments to Asia and the US are beginning to become a serious concern. Since travellers have had their flights cancelled, missed shipments are inevitably forced to join the back of the queue. With the backlog building steadily, some flights are not available for weeks. So, it’s a tall order to guarantee customer delivery dates. But, as I suggested earlier, there’s never a dull moment in solar! The next few months will be no exception. However, from imports to tariffs and even, through to volcanic ash, the future remains bright for photovoltaics.
Editor's Note: For a "local" perspective on the Chinese photovoltaic market, see "Photovoltaics in China: Turning Point, Bright Future".
About The Author
John Knowles is Chairman of DEK Solar, a leader in advanced PV cell manufacturing. John was recently presented with an Honorary Doctor of Business Administration Award from Bournemouth University. Outside of work, he is likely found trudging around a golf course or at home on the Yorkshire Moors. You can also follow @deksolar on twitter or become a fan on facebook.