For leading Chinese solar panel companies such as Daqo New Energy Corp (NYSE: DQ) ; which has also gained the favour of China’s government, the nation’s solar uptake push will assist in further strengthening their position.
According to the NPD Solarbuzz Quarterly report, the Chinese end-market was less than 10% of global PV demand just two years ago. During the final quarter of last year, a third of all global PV panel shipments ended up (or stayed) in China.
With China planning to more than double its installed solar PV capacity this year; local manufacturers that survive consolidation efforts can look forward to prosperity.
Chinese solar panel manufacturers have been doing it tough in recent years. Cut-throat competition, plummeting panel prices and associated wafer-thin margins have seen weaker companies going to the wall. Even with the domestic love for solar growing; many more will follow as there are still too many players.
China’s government has recognised the challenges within its PV sector and is taking steps to thin the herd. The strong will not only survive, but flourish.
China’s government is smiling upon a chosen few; for example, Daqo New Energy Corp is one of only a dozen companies that will receive priority funding support from China Development Bank Corp.
“This is important to the industry that only 12 selected companies can receive state support, indicating the government’s intention to speed up industry consolidation,” said Jessica Ng, an industry analyst at Bloomberg New Energy Finance in Beijing when the situation came to light last year.
At the time the Bloomberg article was published, not all the beneficiary company names were known; but Daqo New Energy Corp confirmed yesterday it made the list.
Daqo has been rapidly expanding and began making itself known in Australia when local solar provider Energy Matters introduced Daqo solar panels to the Australian residential solar market last year.
The modules use Daqo’s sought-after 9N polysilicon and offer excellent performance in Australia’s often harsh conditions, plus a positive power tolerance – meaning all modules are guaranteed to achieve at least their nameplate rating.
Daqo New Energy Corp is one of China’s largest polysilicon manufacturers; with an estimated total production capacity of 4,300 metric tons in 2011.The company has established a 200MW solar panel manufacturing plant in Nanjing, China.