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.


Saudi Aramco discussing investments in India’s Reliance Industries

Updated 20 February 2019
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Saudi Aramco discussing investments in India’s Reliance Industries

  • World's biggest oil company targets petrochemicals
  • India is a top investment priority for Saudi Arabia

NEW DELHI: Saudi Aramco’s CEO Amin Nassar said on Wednesday that the company is in talks with India’s Reliance Industries for possible investments and is seeking other opportunities in the country.
Saudi Aramco signed an agreement in April with a consortium of state-owned Indian refiners to participate in a $44 billion refinery project on the country’s west coast.
“We are looking at additional investment in India so we are in discussions with other companies as well, including Reliance and others,” Nasser said in a panel discussion in New Delhi.
“We are looking at it. We are not limited to that investment which is the mega refinery,” Nasser said, referring to the west coast project, which would process 1.2 million bpd of crude and produce 18 million tons per year of petrochemicals.
Nasser is part of the entourage traveling with Saudi Arabia’s Crown Prince Mohammed bin Salman, who is in India for a one-day visit.
Reliance Industries, controlled by Asia’s richest man Mukesh Ambani, is India’s biggest refining and petrochemicals company and runs a 1.4 million barrels per day (bpd) refinery in western India. It plans to expand the capacity to 2 million bpd by 2030, according to plans shared with the Indian government.
Saudi Arabia, the world’s biggest crude oil exporter, is keen to expand further into oil refining and petrochemicals.
India would provide a fast growing market for oil and fuels and is already a steady buyer of Saudi oil.
“India is an investment priority for Saudi Aramco. India takes from us almost 800,000 barrels a day and by 2040 India’s total consumption will be around 8.2 million barrels per day,” Nasser said.
India is currently world’s third-biggest crude oil consumer with demand of 4.7 million bpd, according to government figures.
However, Aramco is already facing delays for the refinery project, planned for the western state of Maharashtra, as thousands of farmers have refused to surrender land for it.
Reuters reported on Tuesday the Maharashtra government is looking to move the refinery location.
Yousef Al-Benyan, the chief executive officer for SABIC, the Saudi Arabia-based petrochemical company that is the fourth largest in the world, was also on the panel. He said SABIC wants to expand its business and presence in India.