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August 19, 2014Effect of US sanction on Taiwanese Solar
Taiwanese solar cell companies were having a gala time in the last couple of years, thanks to the US sanctions on imports of Chinese solar cells and a giant boom in Japan. The large Chinese solar module makers were forced to buy Taiwan made PV solar cells to escape the US duties. Taiwanese also benefited from their close relationship with Japanese solar cells companies such as Sharp and Kyocera. They got large OEM orders from the Japanese companies which were stretched in meeting Japan’s 6 GW of solar demand in 2013.
However the honeymoon for Taiwan solar companies is getting over, with a new anti-dumping case by the US government also targeting Taiwan made solar cells and panels. Taiwan has been hit hard as most Chinese companies have almost stopped buying expensive Taiwan solar cells. This means a large captive source of demand has evaporated for Taiwan. This has made the companies sharply drop the ASP of their solar cells from about 40c/watt to just 33c/watt. This is a sharp 20% reduction in price in just one month. Though this price drop will help generate demand for Taiwan from other countries, they will have a hard going in USA because the Chinese will still prefer buying their own domestic solar cells which are cheaper by 10%.
The solar panel and cell industry still faces vicious price pressures despite the large demand. This is because the large capacity created during 2011 has still not been absorbed. Most of the large companies that went bankrupt such as LDK and Suntech, still have their capacities running. Other Chinese companies have taken over these capacities which means that any short term demand deficit leads to renewed price pressure for the companies. The companies which are doing well are those which have diversified into solar development of projects such as SunEdision (SUNE), Canadian Solar (CSIQ) etc. The margins are higher and the sales are bigger in this segment. The field is also less crowded compared to the pure play selling of solar modules and cells.
Taiwan-based makers have lowered quotes for polycrystalline silicon solar cells with a prevailing energy conversion rate of 17.8% from US$0.40-41/W in early June to US$0.33/W currently, slightly higher than the US$0.3/W quoted by China-based makers, according to industry sources.The price reduction is because orders from China-based PV module makers have drastically decreased due to preliminary US anti-dumping tariffs determined in late July, the sources said.