The world s largest solar-panel makers are boosting production this year on expectations thatdemand in China will double, a surprise shift as the $36 billionmarket migrates from Europe toAsia. The five biggest producers of polysilicon solar modules, led byChina s Suntech Power Holdings and Yingli Green EnergyHoldings, will increase shipments 27 percent to 37 percent from2011 levels, according to the average of estimates compiled byBloomberg. Chinese demand will partially offset declines in Europethat are driving the industry toward its first global sales declinesince at least 1999. China s efforts to stimulate its photovoltaic industry at home anda 48 percent drop in panel prices in 2011 are boosting sales.The nation, which trails only Germany and Italy for newinstallations, will dominate growth this year and become the topsolar market in 2013, after European nations cut subsidies for newprojects, according to Bloomberg New Energy Finance. Europe is going down and Asia is going up, said Matt Feinstein,an analyst at Lux Research in New York. While the global demand shift eastward helps soak up excess factoryoutput that is depressing worldwide prices, it may leave Westernmanufacturers with little hope to improve their profit outlooks andshare prices this year. The Chinese boom will drive big shipment numbers from Chinesemanufacturers, which are the only ones selling there, said SeanMcLoughlin, vice president for clean technology analysis at HSBCBank Plc in London. Germany s Q-Cells SE has dropped 74 percent this year,leading the Bloomberg Large Solar index s 30 percent decline,followed by Tempe, Arizona-based First Solar, which has slumped62 percent. Unprofitable companies The 17 members on the benchmark on average lost money at theoperating level last year equal to 7.6 percent of revenue,according to data compiled by Bloomberg. The Chinese companies are in a better position, due to their costcompetitiveness, so they might gain market share, said MartinSimonek, a solar analyst at New Energy Finance. Weaker playerswill leave and stronger ones will stay. Suntech CEO Shi Zhengrong expects solar sales in China to exceed 4gigawatts this year, and Trina Solar CEO Gao Jifan expects 5gigawatts of installations. China s market totaled 2.57 gigawattsin 2011, almost 9 percent of what was sold worldwide, according toNew Energy Finance. China s surge China may install as much as 5.5 gigawatts this year and the sameamount in 2013 while Germany may slide to 2.5 gigawatts next year,the London research group estimates. A gigawatt of capacity isenough to power about 800,000 US homes. The five top companies by shipments of silicon panels last yearwere Suntech, Yingli, Trina, Canadian Solar, and HanwhaSolarOne. They expect combined sales of solar modules this year torange from 9.3 gigawatts to 10.1 gigawatts compared with 7.4gigawatts in 2011, according projections made in company statementsand compiled by Bloomberg. The ranking excludes First Solar, whichmakes thin-film cells and expects a decline in shipments this year. As panel prices fall, PV developments are becoming more economical.That s increasing the chance that installation rates this yearwill be surprisingly strong, said Stefan Heck, a director atMcKinsey & Co s clean tech practice. Exceeding targets Good news will come on the deployment and demand side, Hecksaid in a phone interview from his officein Stamford, Connecticut. Many places will exceed targets.We ll see more installs than expected. He said he s still pessimistic about the profit outlook for panelmakers, since lower prices have slimmed margins for the biggestmanufacturers. At least 10 companies worldwide including USTreasury-backed Solyndra LLC have gone bankrupt in the past year,and Heck expects more insolvencies to follow. Some of the zombies will turn into dead bodies, said Heck. The winners half a decade from now are the players with bigbalance sheets or who have a big brother. China isn t the only market headed for a boom. Japan, thesixth-largest market in 2011, starts a new solar incentive programin July and may install more than 4.6 gigawatts of solar panelsnext year, second after China, according to New EnergyFinance. Saudi Arabia is seeking investors for a $109 billionplan to create its own solar industry. Conservative estimates These programs may not be reflected in forecasts for global demand,said Daniel Guttmann, head of renewable strategy atPricewaterhouseCoopers LLP, a consulting company. In almost everyyear you look, forecasters cost-reduction assumptions and demandforecasts are too conservative. China could be a 5- to 6-gigawatt market this year, maybe evenlarger, said Terry Wang, Trina s chief financial officer. Wecould scale quickly, he said, adding that analysts, might beunderestimating our abilities. Not all solar companies are projecting a surge in 2012. JinkoSolar,which ranked eighth in silicon-panel shipments last year, expectssales between 800 megawatts and 1 gigawatt, which is about the sameas 2011 s level of 950.5 megawatts. Its CEO Chen Kangping stillsaid he expects China to be a very, very important market in2012. Suntech, the world s largest panel maker, has the mostconservative growth forecast of the top five. It expects shipmentsof 2.1 gigawatts to 2.5 gigawatts, compared with 2.1 gigawatts lastyear. Solar failures Suntech Chief Commercial Director Andrew Beebe said he thinksanalyst forecasts for demand are almost always tooconservative. Other PV manufacturers are failing. Germany s Q-Cells, once theworld s biggest solar-cell maker, filed for protection fromcreditors on April 3, the fourth casualty in the country sinceDecember. Solon SE, Solar Millennium AG and SolarhybridAG have all filed for insolvency as Germany cut incentives andChina s suppliers reduced prices. Yingli Chairman Miao Liansheng said on May 30 that while firstquarter shipments to China were soft, they will graduallypick up in the second and third quarter and account for 30percent of revenue this year. Germany and the US currently makeabout 80 percent of Yingli revenue. Solar always surprises, usually on the upside, said Aaron Chew,an analyst at Maxim Group LLC in New York. It s the usual balladof optimism versus pessimism in the market. The e-commerce company in China offers quality products such as China PVC White Card , China Mifare Smart Card, and more. For more , please visit Wet Inlay today!
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