Slumping solar development in China is hobbling growth worldwide.
While worldwide installations are still forecast to rise this year, BloombergNEF lowered its global outlook 6% from its previous forecast as an anticipated building boom hasn’t materialized in China, the world’s biggest clean-energy market, according to a report Monday. BNEF now expects 121 gigawatts of solar to be installed globally.
“China, the big gorilla, is slowing down,” Jenny Chase, an analyst at BNEF, said in an interview Monday. “It was never healthy for the solar market to be dependent on one or two countries.”
Efforts to streamline China’s solar sector have whipsawed the global industry. After an abrupt cut to subsidies and halt to some approvals last year, which sent new installations tumbling, regulators reversed course this year to again support construction with subsidies. However, a final decision on the issue announced in July has been seen as coming too late to avoid a second year of declining installations.
China will install about 28 gigawatts of capacity this year, a drop of almost 37% from the previous year, according to the new BNEF estimate. The revised 2019 forecast is down from 39 gigawatts last quarter, which would have implied a year-on-year drop of only 11%.
Weak demand has added downward pressure on solar-panel prices in the fourth quarter, BNEF said. Almost all components, especially cells and panels, are facing a supply glut this year and next, according to the report, titled “A Market Wobble.”
Polysilicon, the raw material to make solar cells, “has never been so cheap,” BNEF said. Panel prices, currently at about 23 U.S. cents per watt for monocrystalline products, will fall by several more cents, it said.
Brazil, Vietnam and some European countries are among bright spots elsewhere in the world, BNEF said. Solar exports from Chinese firms were $13.2 billion from January to August, compared with $13.6 billion for the whole of 2018, according to the report.