Chinese PV manufacturer Hanergy has been in the news lately for the wrong reasons, such as a dropping stock and recently canceled $585 million order (see this Financial Times article for many of the details). GlobalData analyst Amit Sharma says that these problems are largely because of an “overly optimistic approach regarding its thin-film modules.”
“China’s solar PV industry has been severely affected by huge production capacity additions since 2010, and the subsequent overcapacity has had a much bigger impact on the thin-film industry than on the crystalline silicon (c-Si) industry,” he says. “Thin-film contributes around 10% of the solar PV installation in China as of 2015 and the technology, in comparison to C-Si, has not achieved its economies of scale. However, Hanergy has been aggressively promoting and increasing its manufacturing capacity for thin-film, based on optimism for the technology, rather than aligning it to upcoming project pipelines. While c-Si manufacturers, such as Yingli Green Energy and Trinity Solar, have the flexibility to outsource production and meet demand when required, thin-film manufacturers lack this ability.
Despite the problems and whatever the reason may be, Sharma says Hanergy’s share price downfall is not expected to make a difference to the fast and steadily growing solar PV industry in China and the rest of the world.
“China’s solar industry is set to expand rapidly due to the government’s renewable plans and encouraging initiatives,” he says. “Presently, the country offers a feed-in tariff for both utility-scale and distributed generation installations. The National Energy Administration has increased the solar power installation goal by 20% and is aggressively working to increase solar capacity beyond 100 GW by 2020, a more than threefold increase from 30 GW in 2014.
“However, recent events raise questions over the future market shares of thin-film and c-Si. The solar PV industry still has no definite roadmap to follow, which means the market will be shaped by whatever route its leaders decide to take. As a result, it is perhaps more important for players to have project pipelines, whether in-house or third party, to produce against. Companies must hit customer-required metrics on cost, price, and efficiency, as well as have a business model that makes long-term sense.”
— Solar Builder magazine