Global solar forecasts lowered as China cuts support policies

China said it would not build any more solar power stations in 2018 and cut its feed-in tariff subsidy. (AFP)
Updated 07 June 2018
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Global solar forecasts lowered as China cuts support policies

  • China is the world’s largest producer of solar panels
  • Lower solar subsidies for producers will impact global installations

China’s unexpected move to slash incentives for solar power has sent stocks into a free fall and prompted analysts to lower forecasts for global installations this year amid expectations that a glut of excess panels would send prices tumbling.

China announced on June 1 changes to the subsidies that has underpinned its rise to become the world’s largest solar market in recent years.

IHS Markit, a market research firm, was preparing to lower its global solar installation forecast for this year by between 5 and 10 gigawatts, or up to 9 percent, analyst Camron Barati said. The impact in China, which accounts for half the global market, could be up to 17 GW, the firm said.

Another market research firm, Wood Mackenzie, said on Wednesday that China’s capacity additions would likely be about 20 GW lower than it had expected.

An oversupply of cheap Chinese-made panels that had been destined for domestic projects will help boost demand for solar in other countries and sop up some of the demand lost in China, IHS said.
But a drop in prices will leave manufacturers with razor-thin margins as they seek to unload their products.

“There will be a stressful environment for pricing in the near term,” Barati said. “Something like this certainly has global ripples.”

In April, IHS Markit forecast 2018 global installations would hit a record 113 GW, with 53 GW coming from China alone. China is also the world’s largest producer of solar panels.

But the Asian nation last week said it would not build any more solar power stations in 2018 and cut its feed-in tariff subsidy, which guarantees a certain price for power.


Solar investors reacted by selling off stocks. The MAC Global Solar index is down 7 percent this week. Chinese panel makers Canadian Solar Inc, JinkoSolar Holding and Yingli Green Energy Holding have been hit, as well as US panel makers SunPower and First Solar.

JMP Securities analyst Joe Osha slashed his rating on First Solar shares to “underperform” on Wednesday and cut his price target to $46 from $87.

The Trump administration’s 30 percent tariffs on solar imports will help support prices in the US, Osha said, but added that First Solar is seeking to do more business overseas and pricing everywhere could get very competitive.

“No business is insulated from market reality,” he said.


Huawei first-quarter revenue grows 39% to $27 billion amid heightened US pressure

Updated 7 min 4 sec ago
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Huawei first-quarter revenue grows 39% to $27 billion amid heightened US pressure

  • The world’s biggest telecoms equipment maker also said its net profit margin was around 8 percent for the quarter
  • Washington has intensified a campaign against Huawei, alleging its equipment could be used for espionage

HONG KONG: Huawei Technologies said on Monday its first-quarter revenue jumped 39 percent to 179.7 billion yuan ($26.81 billion), in the Chinese technology firm’s first-ever quarterly results.
The Shenzhen-based firm, the world’s biggest telecoms equipment maker, also said its net profit margin was around 8 percent for the quarter, which it added was slightly higher than the same period last year. Huawei did not disclose its actual net profit.
The limited results announcement comes at a time when Washington has intensified a campaign against unlisted Huawei, alleging its equipment could be used for espionage and urging US allies to ban it from building next-generation 5G mobile networks.
Huawei has repeatedly denied the allegations and launched an unprecedented media blitz by opening up its campus to journalists and making its typically low-key founder, Ren Zhengfei, available for media interviews.
The Chinese firm, which is also the world’s No. 3 smartphone maker, said last week the number of contracts it has won to provide 5G telecoms gear increased further despite the US campaign.
By the end of March, Huawei said it had signed 40 commercial 5G contracts with carriers, shipped more than 70,000 5G base stations to markets around the world and expects to have shipped 100,000 by May.
Huawei’s network business saw its first drop in revenue in two years in 2018. But Ren Zhengfei said in an interview with CNBC earlier this month that network equipment sales rose 15 percent while sales of the consumer business increased by more than 70 percent in the first quarter.
“These figures show that we are still growing, not declining,” Ren said.
Guo Ping, rotating chairman of the company, has said he expects all three business groups — consumer, carrier and enterprise — to post double-digit growth this year.
Huawei also said on Monday it had shipped 59 million smartphones in the first quarter. It did not disclose year-ago comparable figures, but according to market research firm Strategy Analytics, Huawei shipped 39.3 million smartphones in the first quarter of 2018.