HOW THE SOLAR TRADE WAR WILL AFFECT THE PV BIZ

PV: Europe holds the upside wildcard, but trade war impact should not be underestimated

Michael Barker, 21 March 2013 (PV Magazine)

“…[Europe’s market share PV lead is quickly being] overtaken by the Asian market which, as a region, is being driven by the major Asia-Pacific markets of China, Japan, India, and Australia…as European policy-makers have been rapidly and aggressively cutting PV incentive programs…If these policy-reductions continue, the European market is anticipated to contract by another 26% in 2013…[I]n Asia, strong government support has led to…Y/Y growth of approximately 50% in 2012 and growth of over 50% is anticipated in 2013…

“…[F]orecasts for end-market demand can quickly change as policy adjustments have immediate and dramatic impacts…[G]iven the European market’s maturity, it would be easy for the region to rapidly process any positive policy movement into a strong uptick in demand…Growth in the European market would help push 2013 end-market volumes past the 40 GW mark, thus getting closer to the 45 GW supply levels currently in play…[but]a European rebound is difficult to imagine…”

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“…[Demand from China is projected to account for more than 50% of total Asian end-market volumes…However, given the ongoing trade disputes, many of which directly target Chinese-produced components, the China/Europe balance can be examined another way…[I]f no Chinese produced modules can enter the European market…European demand is set to exceed 12 GW in 2013…Global non-Chinese PV module capacity – both c-Si and thin-film – is approximately twice that level…

“While this may give some hope that the industry could achieve rationalization and increase prices if it weren’t for China…incentive policies are not going to be reinstated to previous levels and the PV industry has reached a point where future growth is dependent on current or lower pricing levels…[E]ven if supply/demand rationalization was achieved in the near term, the market would need to maintain current pricing levels in order to maintain demand…[T]he impact of the trade wars cannot be underestimated. With Europe effectively being the ‘swing state’ in 2013 PV demand, the timing of the EU trade investigation could not have come at a more critical junction…”

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