Will Chinese solar industry survive the new challenges?

SOLAR PANELS

Greentech Lead Asia: The fall of the main subsidiary of Suntech did not come as a surprise to industry analysts.  It was the inevitable outcome of the “unfair trade practices” followed by Chinese administration and the entire industry, as many feel.

Last year GTM Research predicted that another 180 Solar panel makers will likely go out of business or be bought by 2015. The industry already saw many solar companies going off the business in Europe and the U.S in 2012.  The reason for their failure was their inability to compete with Chinese players.

However, the solar industry landscape is changing now. The change started with the implementation of anti-dumping and countervailing duties on imported Chinese solar products, making many of the Chinese manufacturers, including the top rated (as per 2011 records) Suntech to opt out of the U.S market.

Read: Suntech to close Arizona factory forcing 43 employees to quit

The trouble facing the Chinese manufacturers is aggravated by the EU’s decision to impose a similar curb on Chinese products. The EU has started registering Chinese solar products in anticipation of possible anti-dumping and countervailing duties that could be implemented in June with retro effect.

What could this mean to the industry?

Experts believe that the ban of Chinese products in major markets like the U.S and Europe will result in sharp increase in solar price. As more countries are likely to join the fray to ban or control Chinese products to safeguard the interests of domestic solar makers, upward price correction is imminent. This will impact the bottom line of energy companies and solar installers.

There will be stiff competition to offer the products and services at a reduced price. Only stable players are likely to survive this competition. The market will see consolidation making the market open only for strong players.

Meanwhile Chinese manufacturers are shifting their focus to other emerging markets like Japan, Malaysia and South Africa that have not curtailed the entry of Chinese providers. Many solar panel makers like Rene Sola are busy setting up manufacturing subsidiaries in these countries to avoid import duties. Their future will be decided by the policies adopted by respective governments.

Suntech’s fall should provide a learning experience to other Chinese solar providers.

editor@greentechlead.com