China's shipments of solar power-related products to the EU have been strong despite reduced subsidies. Although makers are exploring alternative destinations, the EU remains the key export market.
Despite subsidy cuts, China PV manufacturers will continue to focus on the EU market for the next few years. Some of the larger enterprises, however, will be expanding their reach to other destinations, including the US and Southeast Asia.
One of the reasons the EU will remain the primary market is that buyers there place large-volume orders. Michael Guo, manager at Yuhuan Sinosola Science & Technology Co. Ltd, said its EU customers typically requisition more than 1MW of solar panels. Orders from other markets such as Singapore are smaller in terms of volume. Suppliers are generally unwilling to accept such transactions because the average unit manufacturing costs are higher and likely to eat into their profit margins.
Zhejiang Hengji PV-Tech Energy Co. Ltd exports 80 percent of solar cells and modules output to the EU, including Italy, Spain and Germany. Manager Susan Xu said orders have not decreased since the subsidy cuts were announced, and have actually continued to go up. The company is even planning to boost capacity 50 percent this year.
Xu said that while the reduction may give some buyers reason for pause, the large customer base in the EU means China makers may not feel the impact at all. Apart from power generating plants, there is demand from residential communities that employ solar energy.
Guo said the subsidy cuts have not affected Yuhuan Sinosola's business.
China's highly export-oriented solar power industry has been accelerating in recent years. Only 10 percent of PV output is sold to the domestic market. Of those earmarked for overseas sales, 90 percent go to the EU.
But larger makers have now started to branch out into other regions. Yuhuan Sinosola, for instance, is taking to steps to be UL-listed so that it can export to the US and Canada.
One of the country's major PV makers, Yingli Green Energy Holding Co. Ltd built a 100MW solar cell plant in Hainan last year. The factory was constructed in China's southernmost province because it is the closest to Southeast Asia. Since output from the facility will be exported mainly to countries in that region, transportation costs will be minimized.
Zhejiang Hengji is looking at cultivating sales at Japan, South Korea, the US and Africa. The company is in the process of obtaining required certification, including having its products carry the CE mark and be UL-listed.
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