Representing 35 percent of global module capacity, IHS forecasts a 5.7 GW total effective capacity of Chinese tier-1 module suppliers in Q1 2015
SHANGHAI, China (January 22, 2015) – Most Chinese tier-1 solar PV module suppliers have sold out, until the second quarter (Q2) of 2015, according to the latest analysis from information and analytics provider IHS (NYSE: IHS). Along with the consolidation of the PV module industry, Chinese tier-1 suppliers increased their market share from 34 percent in the first quarter (Q1) of 2014 to 45 percent in the fourth quarter (Q4). IHS forecasts these Chinese suppliers will maintain their combined market share in the first quarter of 2015. Representing 35 percent of global module capacity, the total effective capacity of Chinese tier-1 module suppliers in the first quarter is expected to reach 5.7 GW, while total global demand is expected to reach 10.8 GW.
“We have heard from both suppliers and buyers about the expected shortage of Chinese tier-1 modules in the first quarter,” said Jessica Jin, analyst for solar at IHS. “After a demand surge in the fourth quarter of 2014, Chinese tier-1 module suppliers decreased their inventory significantly. Considering the Chinese New Year occurs in the first quarter, companies won’t run their capacity in full production, either; so they won’t have enough products for all quotations. Most of them have already sold out for the first quarter.”
The chart below shows Chinese tier-1 suppliers’ capacity, shipment levels and market share through the first quarter of 2015.
Source: IHS Inc., January 2015
As they are well positioned in the global market, Chinese tier-1 module suppliers will benefit from demand surges in Japan, U.K., South America and Central America. Because some projects in China have been postponed and are not expected to be completed until the first quarter of 2015, the Chinese domestic-market demand is also substantial.
Early global solar PV preparation for 2015
IHS forecasts total global solar PV installations will reach 52.8 GW in 2015, although most installations will occur in the second half of the year. Chinese tier-1 suppliers will again build up inventory, beginning in Q2 2015, to prepare for the expected demand surge in the second half of 2015. Acquisition among manufacturers, and expansion in the module industry, is expected to speed up, since the current capacity of Chinese tier-1 suppliers cannot meet market demand.
JA Solar has announced a 20 percent increase in module capacity in China in 2015. Trina Solar will add 1 GW of module capacity in 2015. More expansions are expected among Chinese tier-1 module suppliers.
Demand surge expected in other regions in Q1
Overall global demand is expected to be unusually weak in Q1 2015; however, the typical seasonal setback will be mitigated by strong demand in Japan, U.K. and other countries. The first quarter (January through March) is the last quarter of the financial year in Japan, where IHS forecasts a 12 percent quarterly increase. In the U.K., the Renewable Obligations Certificates (ROC) scheme for ground-mount systems larger than 5 MW will end at the end of Q1, so there has been a rush of installations in this market; IHS forecasts that 1.6 GW will be installed there in Q1. A demand surge is also expected in Central and South America, including Brazil, Chile and Mexico, where a quarterly increase of 80 percent has been modeled.
