• Solar PV rebounds as demand comes back with ‘a vengeance’

    Posted on April 1, 2014 by in Electric Cars, Environment, Grid Connect, News, Off Grid, Roof, Solar Energy, Solar Hot Water, Solar Panels, Solar PV, Sustainability

    Date: March 20, 2014     Sydney Morning Herald – Business

    Solar manufacturers are returning to profit as demand in China soaks up a supply glut that gutted margins for more than two years.

    The largest solar-panel maker Yingli Green Energy said it expects to be profitable in the third quarter. It joins peers including JinkoSolar, Trina Solar and JA Solar in guiding investors to expect both income and higher shipments in 2014.

    Climbing demand for solar panels is countering a global oversupply of production capacity that erased profits across the industry and bankrupted more than a dozen companies. Developers installed 37.5 gigawatts of panels worldwide last year, up 22 per cent from 2012, and that figure may increase as much as 39 per cent this year, according to data compiled by Bloomberg.

    That growth is starting to “sponge up” much of the glut, especially among Chinese manufacturers, that resulted from a buildup in the late 2000s, Pavel Molchanov, an analyst at Raymond James & Associates in Houston, said in an interview. “That has made a real dent in the overcapacity.”

    China, which surpassed Germany to become the biggest solar market last year, may install more than 14 gigawatts this year, aiding domestic producers. The Asian nation added a record 12 gigawatts of solar power in 2013, compared with 3.6 gigawatts a year ago, according to data from Bloomberg New Energy Finance.

    “Demand has moved up toward capacity,” Molchanov said. “The glut has gotten better.”

    Yingli’s shipments increased 41 per cent last year to 3.2 gigawatts, and the company said that may grow as much as 31 per cent in 2014. Its net loss narrowed 38 per cent in the fourth quarter to 776.2 million yuan ($141 million), and Chief Financial Officer Wang Yiyu said the company will break even in the second quarter and be profitable in the third.

    Market share

    The company chose to gain market share at the expense of profits, Patrick Dai, an analyst at Macquarie Group in Hong Kong, said in an interview. While that puts it behind smaller rivals, it will eventually catch up.

    “You can’t count on the elephant to run fast from step one,” Dai said. “I think the market has overestimated its profitability progress.”

    JA Solar posted net income of 142.3 million yuan in the fourth quarter, its first profit since the first quarter of 2011. Shipments for the year increased 22 per cent to 2.1 gigawatts, and may reach 2.9 gigawatts this year, the company said March 17.

    Becoming profitable

    JinkoSolar became the first Chinese solar manufacturer to shift back to profits, in the second quarter of last year. The company reported net income of 164.3 million yuan in the fourth quarter and is expanding production capacity. Shipments of 1.9 gigawatts beat its forecast by 10.5 per cent and were almost 63 per cent higher than in 2012. It expects 2014 deliveries of as much as 2.5 gigawatts.

    The largest solar manufacturers have cut expenses and are poised to take advantage of growth this year, said Nimal Vallipuram, an analyst at Gilford Securities Inc. in New York.

    “They continue to do very well at reducing the costs and their volume is going up very strongly,” he said. “Demand has come back with a vengeance.”

    Read more: http://www.smh.com.au/business/carbon-economy/solar-pv-rebounds-as-demand-comes-back–with-a-vengeance-20140320-353ir.html#ixzz2xalJEAps

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