Party is over for dirt-cheap solar panels, says China executive
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Re: Party is over for dirt-cheap solar panels, says China executive
#2Translation: Foreign competition has now been driven out of business by subsidies, time to raise prices.
Re: Party is over for dirt-cheap solar panels, says China executive
#3Always over until it starts again. Note that the party is over (in this case) because it is threatening smaller businesses, not because there is a lack of capacity or that the "big guys" couldn't still make money at the reduced rate. In every industry where I have been aware of this this situation coming up (voluntary reduction in production in order to shore up prices), it works for a while and then people "cheat" and ramp up their production to make a bit more money with their now dormant capacity. And then more people cheat, and the party is back on again. The Chinese are notoriously fierce in their desire to make a buck and so I give this one about a 5% chance of lasting through the end of 2019.
Re: Party is over for dirt-cheap solar panels, says China executive
#4[deleted]
Re: Party is over for dirt-cheap solar panels, says China executive
#5Translation: Foreign competition has now been driven out of business by subsidies, time to raise prices.
While there is certainly some truth to your statement, the subsidies being referred to in the article are on installed panels. Prices on panels were held high by subsidies, and their removal resulted in a market supply glut. This 10-15% raise is just the correction from the previous ~30% fall.
Re: Party is over for dirt-cheap solar panels, says China executive
#6Translation: Foreign competition has now been driven out of business by subsidies, time to raise prices.
The article says Chinese solar is 30% of the world production, not sure if that’s enough to jack prices.
Re: Party is over for dirt-cheap solar panels, says China executive
#7no shit, this is what everybody with a brain has warned about
China's MO is to subsidize Chinese businesses, restrict foreign competition internally, and steal foreign companies IP until they are bankrupt, while simultaneously being allowed to export their goods to those same countries with no penalty. Then they jack up the prices when all the competition is gone
Everybody criticized Trump for the steel and solar tariffs because they don't think beyond next quarter earnings report. What happens in 20 years when China has a monopoly on steel, solar, and other key industries and they decide to jack up prices? The rest of the world won't be able to do anything about it because they are junkies and China is the supplier
Re: Party is over for dirt-cheap solar panels, says China executive
#8Translation: Foreign competition has now been driven out of business by subsidies, time to raise prices.
... or drop the quality of the current products.
aka "The Walmart Playbook".
Re: Party is over for dirt-cheap solar panels, says China executive
#9Until the next cost-reduction tech scales up, and so on, and so on...
Re: Party is over for dirt-cheap solar panels, says China executive
#10Always over until it starts again. Note that the party is over (in this case) because it is threatening smaller businesses, not because there is a lack of capacity or that the "big guys" couldn't still make money at the reduced rate. In every industry where I have been aware of this this situation coming up (voluntary reduction in production in order to shore up prices), it works for a while and then people "cheat" a…
The solar industry is evolving fast enough that most dormant capacity left behind by bankrupt smaller producers probably isn't worth reactivating even if module prices rebound. These producers don't just have smaller annual capacities. They also have less sophisticated quality control, less automation, and older, slower generations of the automated tools they do have.
Module assembly is simple enough that some of those lines could be reactivated in response to demand, but module assembly has always been the easiest part. Smaller wafer and cell manufacturers that go bust probably won't see their equipment resurrected anywhere. Newer capacity from the likes of JinkoSolar, LONGi, and GCL yields more wafers per ingot and more efficient cells from wafers, more consistently, at lower costs.