ReneSola not discouraged by China policy changes, ups Q1 guidance

Chinese solar projects developer ReneSola Ltd (NYSE:SOL) is not too worried about the policy changes in China because of expected equipment price declines.

China’s central government said on Friday that it plans to limit state support for solar power projects in 2018, and announced a cut to feed-in tariffs (FiTs).

Commenting on the news, ReneSola CEO Xianshou Li pointed out that the company’s existing projects will continue to get the subsidies they are already entitled to, while new ones should benefit from “a likely significant” drop in equipment prices in the second half of the year, and the fact that commercial and industrial electricity prices are higher in the eastern provinces of China. That is where the company’s distributed generation (DG) projects are mainly located.

“We believe the lower equipment cost and stable electrical rates will enable us to find unsubsidized net-metered and self-consumption projects at grid parity with reasonable rates of return,” the CEO said, adding that the company forecasts tremendous growth for net metering and self-consumption projects in the second half of the year. Moreover, ReneSola is also relying on its overseas projects.

The company increased its revenue guidance for the first quarter of 2018 to a range of USD 40 million (EUR 34.3m) to USD 45 million from USD 30 million-35 million. It said that the move reflects the growing business momentum since the sale of its manufacturing business.

ReneSola will announce its first-quarter results on June 20, 2018.

(USD 1.0 = EUR 0.857)

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