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As the China government will lower PV feed-in tariffs for PV power-generating stations and distributed PV systems to be established after June 2017, there is expected to be a rush for PV installation in the first half of 2017 and thus demand for crystalline silicon solar cells and PV modules in the China market will be robust in the first half of the year, but will drastically drop in the second half, according to industry sources.
Due to cuts in PV feed-in tariff rates, demand for PV installation in the Europe and Japan markets has significantly decreased. Consequently, China-based PV module makers and Taiwan-based crystalline silicon solar cell makers have relied more on demand in the China market, the largest PV market accounting for 30% of global demand, the sources said.
In order to reduce PV overcapacity in China, the China government has taken measures to implicitly eliminate less qualified PV makers through setting financial and technological qualification barriers for participation in open-bid competition for state-run enterprises’ PV installation projects, the sources noted. As a result, larger PV makers will stand better chances of winning such projects and some of second- and third-tier ones are expected to be forced out of the market beginning the third quarter of 2017 when demand begins to drop, the sources indicated.
Since Taiwan-based solar cell makers have a large portion of orders coming from China-based PV module makers, the latter are expected to increase in-house production of solar cells and decrease procurement from the former when demand in China slips, the sources noted. Thus, Taiwan-based solar cell makers are likely to be under pressure of merger in the second half of 2017, the sources indicated.
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