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Market Insight

Strong demand in China in Q4'16 stabilizes pricing and depletes inventories but uncertainty remains for 2017

November 24, 2016  | Subscribers Only

Edurne Zoco, PhD Edurne Zoco, PhD Research Director, Solar & Energy Storage

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Strong demand in China in Q4'16 stabilizes pricing and depletes inventories but uncertainty remains for 2017


The solar industry has always been a remarkably dynamic industry but, throughout the second half of 2016, is undergoing one of its most frantic phases. If Q3'16 was marked by an oversupply scenario with slow demand, strong price decline, and high inventories throughout the module supply-chain, Q4 presents a more balanced supply-demand scenario with higher shipments, stabilized pricing, and lower inventory levels. The key explanation for this radical change across the solar industry environment is the 29 September announcement, by China's National Energy Administration (NEA), of the new 2017 FIT proposal. There is no final announcement yet but it is widely anticipated that FiT rates will be cut by 13% to 25%, with a grace period allowing projects approved before the end of 2016 to complete in 2017.

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Power & Energy Technology
Category
Solar
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