HONG KONG, Oct 9 (Reuters) - China has only completed a quarter of its rooftop solar installation target for this year, industry sources say, raising further concerns about the growth potential of domestic solar panel manufacturers in the world’s largest solar market.
Early this year, China set a goal of building about 14 gigawatts (GW) of solar generating projects in 2014 - close to Finland’s entire power capacity. Of that, it expects 8 GWs to be so-called distributed solar, which includes rooftop panels and other small installations.
In the first nine months of the year, however, China has built less than two GWs of distributed solar, industry executives and analysts say. At best, that number may rise to five GWs by year-end, they added.
“It will definitely miss the distributed solar target, which is way too ambitious,” said Glenn Gu, former solar analyst with IHS in Shanghai and now an independent consultant.
The aim of distributed solar is to redress an imbalance caused by a glut of large solar farms in China’s vast western region, where there is plenty of sunshine but not enough infrastructure to harness and transmit the power to the densely populated south and east. Over 80 percent of China’s some 26 GWs of existing solar projects are solar farms.
Beijing has pinned high hopes on distributed generation, which turns power users into producers, to drive more sustainable demand for solar. But analysts have said distributed solar faces a series of challenges from insufficient subsidies and bank support to difficulties in acquiring rooftop rights as well as a lack of creditworthiness among industrial users.
Unless Beijing takes concrete measures to address these concerns, industry analysts say the growth potential for Chinese solar panel manufacturers at home will be limited, forcing them to focus more on overseas markets.
Competition is stiff in China’s solar panel market, which is expected to account for a quarter of global demand this year. This is due to oversupply, partly caused by the reluctance of local governments to allow inefficient plants to fail.
Major Chinese solar panel makers like Trina Solar, JinkoSolar and ReneSola have already been boosting exports. They have set up plants overseas to circumvent U.S. and EU anti-dumping tariffs or quotas on Chinese solar products, and where they can get higher margins than at home.
Shanghai-based ReneSola has lined up one GW of contract manufacturing capacity overseas, which accounts for half of its overall annual supply, to sell to the U.S. and EU markets.
“We don’t want to be a pure China manufacturer. If you enter a cost-price war with other Chinese factories, you are heading for a dead end,” said an official at ReneSola, who declined to be identified as she was not authorised to speak to the media. (Editing by Miral Fahmy)