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Solar China Exports Analysis

2H20 module trends from a perspective of China exports

October 8, 2020 PV InfoLink

CN TW EN

 

1H20 Review

China accumulated 33.8 GW in module exports during the first half of 2020. The Netherlands, the major transit hub, topped the ranking in terms of export markets, with export volume amounting to 7.1 GW over the period. Japan was the second largest export market, having imported 3 GW of modules, followed by Australia, which imported 2.2 GW of modules from China. Exports to India, Brazil, Spain, Germany, and Vietnam each exceeded 1.5 GW, while the volume surpassed 1 GW in Chile and the U.S. respectively.

Reviewing the second quarter, the COVID-19 pandemic had little impact on the Netherlands. The country saw a continued import of modules, which totaled 4.4 GW in the April-June period, a 60% growth compared with the same period last year. Thus, the Netherlands had contributed largely to European market demand amid the pandemic in that quarter. Europe’s strong demand might be ascribed to inventory draw taking place ahead of time, and this may lead to weakened demand in the second half.

In Japan, where remaining projects were rushing to connect to the grid by the end of the third quarter, saw stable module inventory draw during the first half of the year. Vietnam, which introduced a new feed-in tariff program in April, imported as high as 1.1 GW of modules in the three months ending June, although the figure had been higher last year.

Analysis of top 10 export markets

analysis of top 10 export markets

Overall, the share of the top ten export markets for Chinese modules showed little difference in the first half compared with the corresponding period last year. Separately, China’s module exports to the Netherlands grew from 13% last year to 21% this year, which suggested strong demand in Europe.

Japan’s module demand was more stable than last year. In contrast, India, which usually helped drive a great share of module exports in the first quarter, witnessed a shrink from 9% last year to 6% in the first half due to COVID-19 pandemic and border dispute with China. However, export volume is expected to grow in the second half as India started to reopen in July.

Vietnam, which implemented a new FIT policy in the second quarter, saw growing demand each month in the first half, having climbed to the third largest export market in the Asia Pacific with 1.5 GW of cumulative exports over the period.

Meanwhile, although the U.S. government implemented policy decisions on bifacial modules in a haphazard manner, bifacials exported to the United States remained excluded from the Section 201 tariffs in the first half. And thanks to the rapid decline in module cost in China in the first half, bifacials were fairly profitable with the exemption in place. This explains why the U.S. was on the list of top ten export markets for Chinese modules over that period.

Jinko, JA Solar, Canadian Solar, Trina, and Longi dominated the top 10 largest export markets, with each of them taking up more than half of demand in these markets. This suggested a growing monopolization of Tier-1 manufacturers amid the pandemic.

Analysis of top 10 export Company

analysis of top 10 export company

Jinko retained the top spot with 5 GW in cumulative module exports in the first half, followed sequentially by JA Solar with 3.4 GW, Canadian Solar and Trina respectively with 3.4 GW, and Longi with 2.9 GW. 

Company-wide, this year saw noticeable drops in cumulative module exports because the COVID-19 outbreak in China and abroad disrupted logistics. Module suppliers that focused on India and Latin America witnessed their exports plummet. By contrast, Tier-1 producers with abundant financial, logistic, and labor resources delivered their shipments with fewer hitches.

Among the top ten largest module suppliers in the first half, the top five spots were held by Jinko, JA Solar, Canadian Solar, Trina, and Longi—which together comprised 53% of Chinese module exports. Longi made the top five list for the first half of the year and Seraphim did the top ten, compared to last year’s rankings. Moreover, Tier-1 makers held a growing share of Chinese module exports, with top five suppliers having accounted for over half of the exports in cumulative terms.

The top five suppliers overlapped when it came to their target markets. They all diversified their business risk by shipping modules to Europe, the Asia-Pacific, and Latin America. Exports to foreign markets comprised more than half of each of the top five suppliers’ total module exports. Canadian Solar focused on the Netherlands, a transfer hub in Europe; it also held comparable shares of module exports across different markets, compared to other suppliers.

Module Product and Technology Trend

2020 monthly market share by product

Mono PERC and conventional multi-Si modules respectively accounted for 73% and 17% of Chinese module exports in the first half. The share of mono PERC in Chinese module exports grew markedly every month in the first quarter. Since the start of the second quarter, mono PERC and multi-Si modules respectively hovered at around 80% and 20% in Chinese module exports.

As mono PERC become increasingly dominant in the module market, there is also a growing shift in module demand in India, where multi products are dominant. The ratio of mono PERC to multi-Si modules shipped to India was 5% to 92% in 2019; in  the first six months of the year, it was 27% to 67%. This suggests a growing global trend toward the adoption of mono products. So, how the proportion of mono/multi module shipped to India will change deserves attention.

In the first six months of the year, utility-scale projects in emerging markets contributed to the majority of demand for China’s n-type modules. The export destinations were highly concentrated, with Brazil, Japan, and Oman being the main export markets. 72-cell, TOPCon modules accounted for a preponderance of the module exports, with power output mostly ranging from 405W-420W for 72-cell layout and 325W–340W for 60-cell layout.

Compared with p-type modules featuring large cells and assembly techniques, n-type modules did not have much competitive advantage in power rating and technology. And as the number of long-term contracts signed with customers in Brazil was falling, only 200 MW of n-type modules were exported in the first half.

quarterly changes to the composition of modules by technology

Half-cut remains the most commonly adopted technology at present, and such technique is usually applied to conventional multi-Si or mono PERC cells. Since the beginning of April, some of the top-five showed growing exports of half-cut + MBB modules. Such modules accounted for more than half of modules exported by Trina and nearly 50% of the modules exported by JA Solar and Canadian Solar, respectively.

In terms of high-density modules, Jinko started to ship modules with tilling ribbons. Longi and Canadian Solar continued to ship shingled modules in small volumes. As demand for large format modules continue to rise, it’s expected that high-density assembly techniques of tiling ribbon and shingling will gradually replace half-cut and MBB + half-cut to become mainstream for modules exported by industry leaders.

Conclusion

The COVID-19 pandemic has had little impact on China’s export of modules in the first half. European market alone occupied nearly 50% of total exports in the second quarter. Since some European countries have extended grid-connection deadlines until the first half of 2021, demand from Europe may slow in the second half. In Asia Pacific, module demand from Japan remained stable at 500-600 MW every month in the first half. However, export volume to the country is expected to decline in the final quarter as most of the remaining utility-scale projects will commission by the deadline in the third quarter. Exports to Vietnam rose significantly in the second quarter after the government introduced a new FIT scheme this year, and the volume is expected to peak in the third quarter. InfoLink projected that global module demand this year is 124.7 GW, of which Europe and Asia will constitute 22.1 GW and 29.4GW, respectively. The share of foreign markets will decline from last year’s 75% to 67% this year.

The first half of the year saw increasing monopolization as industry leaders have maintained stable shipments due to better control over their business operations amid the pandemic. The consolidation also facilitates withdrawal of smaller manufacturers.  

On the product side, mono-Si products accounted for 80% of the share. India, a major multi-Si market, also witnessed a slump in multi-Si share in the first half, from 90% to 60%. It’s expected that the market will see growing share of mono-Si products at the end of the year and it is likely that the share will exceed 50% next year.

The second quarter saw a shift of modules exported by Tier-1 manufacturers from half-cut modules to half-cut + MBB modules, with the mainstream power output of 72-cell mono PERC modules ranging from 390W to 405W. On the other hand, export volume of 163mm-high density modules with tiling ribbon grew significantly in the second quarter and the figure is forecast to exceed 250 MW for the first half. These high-density modules feature a power rating of 455-460W, and their FOB prices were similar with that of mainstream modules. 166mm-modules are mostly rated at 430-440W; the export volume of these modules is estimated to amount to 4 GW for the January-June period. 210-mm modules assembled with MBB + 1/3 cut cells, on the other hand, featured a power output of 485-500W. Although export volume of these modules was less than 1 MW as they are still in the sample stage, p-PERC modules enjoyed advantages over n-type modules for high power output achieved by large wafers. Overall, modules based on wafers larger than 166mm will continue to grow in export volumes in the second half. 

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