June 8 (Renewables Now) - China’s move to limit support for new solar capacity this year has led to a roughly 20-GW cut in GTM Research’s forecast for 2018 installations in the country.
The market research firm is cutting its capacity additions forecast for China to 28.8 GW from 48 GW previously. In 2017 China added around 53 GW of solar, or more than half of the global total.
GTM Research said reduced demand from China is to result in a new wave of oversupply globally. According to senior solar analyst Jade Jones, this could lead to a drop in prices of 32% to 36%. He notes that suppliers may be forced to slow down photovoltaics (PV) manufacturing capacity investments.
On June 1, China put a halt to approvals for new subsidised utility-scale PV projects in 2018 and a 10-GW annual cap on distributed generation (DG), while also cutting feed-in tariffs (FiTs) and announcing that new utility-scale projects would have to compete in auctions. The move came in a drive to control subsidy costs, which, according to Wood Mackenzie, may hit CNY 250 billion (USD 39bn/EUR 33bn) by 2020. In 2017 such costs stood at CNY 100 billion.
GTM Research solar analyst Benjamin Attia expects record-low solar bids in upcoming solar auctions, going below USD 20 (EUR 17) per MWh in the next 12 months.
(CNY 10 = USD 1.56/EUR 1.32)