Policy and Industry Dynamics

Policy and Industry Dynamics

Policy and industry dynamics

Assisted by the Top Runner Program, the Mono-crystalline Market Share in China Rising to 25%

Date/Time2016-09-01 Print Font Size:TT

In the first half of this year, the domestic demand of China achieved a spectacular amount of more than 20GW of grid-connected power generation in the first two quarters, and the supply fell short of the demand throughout the supply chain. During the upsurge of installation, besides the battle between mono-crystalline and polycrystalline products in the market, the 1GW "Top Runner Program", which set high threshold for module conversion efficiency and encouraged the popularization and spreading of technically leading products, also gained the attention of all circles.
After the installation tide by June 30, the domestic demand goal newly published by the government of China even raised the Top Runner Program to the scale of 5.5GW. Along with the recent tendering of the module demands of "Top Runner Program" in succession, major manufacturers were all eager to get into action without exception and prepared to have a fight with high-quality efficient products.
Mono-crystalline Market Share in China Rising to 25% in H1 2016
In the current market, where the efficiency of mainstream mono-crystalline cells is 19.5% -- 19.8% and that of polycrystalline cells is 18.15% -- 18.4%, it is easier to reach the level-II threshold of Top Runner by using mono-crystalline technology. However, because the subsidies of Top Runner Program were not superior to those of other power stations and the procurement price of modules was relatively modest, mono-crystalline and polycrystalline bidding manufacturers were more inclined to meet standards without adopting PERC technology; as a result, conventional mono-crystalline modules ranked first in the Phase-I 1GW Datong Top Runner Program relying on a high proportion of 47%.
The hot atmosphere of mono-crystalline products in the first half of this year attracted not a few large power stations to turn to mono-crystalline products, and mono-crystalline wafer manufacturers LONGi and Zhonghuan Solar in rapid production expansion found their supplies were not adequate to the demand, driving the fast increase of mono-crystalline market share in the domestic demand of China. According to the statistics of EnergyTrend, about 3.8GW installed capacity selected mono-crystalline products in China in H1 2016; based on the estimate of actual demand of 15.5GW, the mono-crystalline market share in China was as high as 25% in the first half; as the largest three suppliers of mono-crystalline products, LERRI Solar, JA Solar, and Trina Solar occupied over 50% in the domestic mono-crystalline demand of China in H1 2016.


Top Runner Program Further Upgraded, Making the Demand Change from Conventional Mono-crystalline Products to Mono-crystalline PERC

However, the Top Runner Program didn't not have more preferential electricity price than other conventional power stations so that power stations couldn't give a module procurement price much higher than that of conventional modules, although they required module suppliers to provide a high conversion efficiency. That was also why PERC, N-type module, and black silicon technology merely took up 12% in the 1GW Top Runner Program of 2015.
This year, the Top Runner Program has been upgraded again due to the newly published rating criteria. In the rating criteria for the Top Runner Program newly unveiled by the National Energy Administration this year, technology advancement amounted to 20%, meaning that in a bid to stand out in the fierce bidding for the Top Runner Program, power stations should not only select modules just reaching the thresholds of the program but the modules they selected should also be produced with special technologies different from those of conventional modules. Then, PERC, an efficient technology realizing mass production with low cost, finally made a figure in the domestic market of China, enabling manufacturers having PERC production capacity in Taiwan and mainland to maintain a certain operation ratio in face of the quick-frozen demand in the third quarter.
New Wave of Low Price but High Efficiency
Although "technology advancement" is important, "tendering electricity price" is the item taking up the highest proportion in the rating criteria for the Top Runner Program this year. It can be found from recent tendering price of modules in China that the price of efficient modules was falling at a shocking speed, and for mono-crystalline products of 285 -- 295W that could be only achieved by PERC technology, the lowest price was surprisingly down to RMB 3.18/W, forcing the required price of PERC cells to drop straightly despite the extremely high inquiry degree.
It is predicted that in the future, polycrystalline silicon wafer in a larger size (156.75 mm * 156.75 mm) will be integrated to increase cell area by nearly 1%; with the addition of the technology changing cells from 4-busbar type to 5-busbar type, modules will be able to continuously improve the mainstream level, which will be the trend catching the attention of the public this year.
Although most manufacturers have significantly lowered the operation ratio to cope with the weak market demand in the third quarter, vendors around China still look forward to the rebound in the domestic demand of China and hope the huge demand of China will rebound as soon as possible to temporarily stop the predicament of spot price collapse. Judged from the present situation, poverty alleviation programs and distributed systems carried out vigorously also become the driftwood for vendors in the ocean of market, but the Top Runner Program, which has started tendering in succession, is most likely to become the pioneer of demand rebound.

It is anticipated that though the serious over-supply this year will give rise to the continuous drop in module price later, the wave of efficient modules will continue improving the power generation benefit of solar power stations and lead solar energy industry a bigger step towards power connection to the grid at a fair price. The market share of mono-crystalline products will also increase year by year along with the improvement in efficiency and cost performance.

Source: http://www.energytrend.cn/research/20160912-14678.html