New | China to erect fewer farms, generate less solar power in 2017

China, home to the world’s largest installations of solar farms, will install fewer panels in 2017, taking a breather for the first time in five years, amid arrears in government subsidies and bottleneck problems with the country’s power grids, analysts said.

Chinese solar farms will add between 26 and 28 gigawatts (GW) of power generating capacity this year, with their share of the global market shrinking to 33 per cent from 44 per cent in 2016, according to forecasts by IHS Markit. Worldwide installations would grow by a mere 1.3 per cent to between 79 and 85GW this year, a far cry from last year’s 35 per cent surge, owing mostly to reduced volume from China, IHS said.

“Global demand in the second half, like in last year, will be highly affected by Chinese policy,” IHS principal analyst Edurne Zoco said at the annual SNEC solar power industry conference in Shanghai.

Chinese companies erected 34.5GW of solar farms last year, of which two-thirds, or 22GW, were done in the first half as developers rushed to complete their projects ahead of a June 30 government deadline to reduce subsidies on clean energy. A further cut to tariffs is on schedule for projects that are not completed by June 30 this year.

Still, a steep decline in prices for solar panels and components means developers are incentivised to build new projects.

Owing to problems in transporting electricity from remote areas around China, the emphasis recently has been on the less sunny central and southern regions close to consumers as well as on rooftops of industrial buildings in urban areas.

But these industrial projects have only been able to sell 60 per cent of their output to building occupants, compared with 80 per cent expected earlier amid slower industrial power demand growth, according to Asia Europe Clean Energy (Solar) Advisory’s founder Frank Haugwitz.