Solar photovoltaic installations in China are set to surpass 4 GW in the second half of the year, as the National Development and Reform Commission – the country's regulatory and planning body – has raised its solar energy target from 15 GW to 21 GW by 2015, according to a new report from IMS Research.
This guideline will further stimulate the rapid growth of China's PV market from this year through 2015, the market research firms predicts.
With European demand set to shrink, China's domestic solar market will become increasingly important. China's latest move will help to support the huge amount of production capacity added by Chinese suppliers in the last two years by expanding domestic demand, IMS Research says.
In addition to the large pipeline of ground-mounted utility-scale PV installations located in China's desert regions, commercial installations are forecast to increase their market share by 13% this year, IMS Research predicts.
"A more diverse range of system types will emerge in 2012, largely driven by China approving 1.7 GW of projects under the Golden Sun Scheme," explains Frank Xie, senior PV market analyst and author of the report." IMS Research predicts that 1 GW of Golden Sun projects will be completed by year end, and that medium and large commercial rooftop installations will reach 850 MW in 2012."
This has created huge opportunities for PV suppliers in China.
"Although the Chinese government has implemented tighter project-approval regulations in 2012, system integrators have submitted a huge amount of applications," Xie continues." With the prospect for 5 GW to 7 GW of PV installations in 2012, PV module shipments to installations in China in 2012 are predicted to be more than double that of [those seen in] 2011.
"Inverter companies will have similar opportunities, and the base of domestic suppliers has grown rapidly in recent years, with China now home to over 200 inverter suppliers," he adds.
Although the outlook for PV demand in China is positive, price erosion is set to continue this year, as overcapacity still exists in the polysilicon, wafer, cell and module supply chain.
According to the report, in the first quarter of this year, both the average price of wafers and the average price of polysilicon fell by 11% compared to the fourth quarter of last year and are forecast to continue falling in the second quarter of this year.