Market Research Report : Solar Energy in China 2012

Solar Energy in China
March 2012

Executive Summary
 China accounted for X% of the global PV installed capacity in 20‐‐
Market  Chinese solar PV installation base is expected to reach X MW growing with a CAGR of Z%
during 20‐‐ ‐ ‐‐

Drivers: Challenges:
• Growing Energy Demand • Oversupply Condition
Drivers & • Geographical Advantages • High Price of Electricity Generation
Challenges • Solar Subsidies • Low Per Capita Income
• Focus on Renewable Energy
• Reduction in CO2 Emission

 China National Solar Policy  Feed –in Tariff Program
Government  Distributed / Rooftop Solar PV  National Renewable Energy Law
Initiatives  Large Scale Solar PV  Incentives and Regional Subsidy

 Vertical Integration
 Focus on Thin Film Technology
Trends  Focus on the Export Market
 Solar Power Plant Construction

Major Players

Competition Company 1 Company 2 Company 3 Company 4

SOLAR ENERGY IN CHINA 2012.PPT 2

•Introduction
•Market Overview
• Global
• China
•Drivers & Challenges
•Government Initiatives
•Trends
•Mergers & Acquisitions
•Competition
•Key Takeaway


Global solar energy market has been growing dynamically
with Y dominating z% to the solar PV market
Global Market Overview (1/2) Solar Installed Capacity and Growth
• Global PV installed capacity is expected to reach X GW
GW growing with a CAGR of Z% during 20‐‐ ‐ ‐‐
200 a2
• In 20‐‐, Y dominated the global solar photovoltaic Z%
150
market
100
 Y had a y% share of the global PV market in 20‐‐
50 a1
• China accounted for x% of the global solar heating
capacity in 20‐‐ 0
20‐‐ 20‐‐e

Solar Heating Capacity (20‐‐) Solar PV Capacity ( 20‐‐ )

D% H% Country 1
Country 2
Country 1 G%
C% F% Country 3
Country 2 A% Country 4
B% Country 3 E%
Country 5
Others
D% Country 6
A%
Country 7
C%
B% Others

Source:


Investment in Solar energy with a magnitude of USD y bn is
set to transform the energy mix of the world by 20‐‐
Global Market Overview (2/2) Global Investment in Solar Technology
• Global investments in solar technology is expected to USD bn
be x that of 20‐‐ reaching USD y bn by 20‐‐ Z%
x2
100
• Top 5 solar companies accounted for y% of the global 80
solar PV cell market in 20‐‐ 60 x1
 Chinese companies accounted for y% share 40
• Global solar panel prices have declined to USD 20
x/Watt with a CAGR of z% during 20‐‐‐‐‐ 0
20‐‐ 20‐‐e

Global Solar Panel Prices Solar PV Cell Market – Top 5 Companies
USD/watt %
x1 x2
4 x1 Z% 6 x3 x4
3 x5
4
x2
2
2
1
0 0
20‐‐ 20‐‐ Company Company Company Company Company
1 2 3 4 5

Source:


Major global initiatives towards developing the solar energy
market
Point 1 Point 2

19‐‐ 19‐‐ 20‐‐ 20‐‐ 20‐‐

• Point 4 • Point 5 • Point 6 • Point 7 • Point 8

Point 3

Source:


Aided by government support the Chinese solar energy
market is expected to witness dynamic growth
Overview Solar Installed Capacity
• Solar PV is expected to drive the Chinese solar energy
market with dynamic growth MW
x7
• Solar PV installed capacity is expected to reach xMW 3,000
x6
growing with a CAGR of y% during 20‐‐ ‐ ‐‐ 2,500 Z% x5
 Chinese government has undertaken several measures to 2,000
promote solar energy utilization in China x4
1,500
• In 20‐‐, large scale solar applications and Building
Integrated Photo Voltaic accounted for z% of the 1,000 x3
x2
solar installations in China 500 x1
 Grid connected PV system in buildings is expected to have 0
a y% share of solar energy distribution by 20‐‐
20‐‐ 20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e 20‐‐e

Expected Market Distribution (20‐‐) Solar Installation by Application (20‐‐)

C%

B% D%
A C E
a3 A C
B D
E% B
a1

a2
A%
Source:


Drivers and Challenges ‐ Summary

Drivers
Challenges
Growing Energy Demand
Oversupply Condition
Geographical Advantages
High Price of Electricity Generation
Solar Subsidies
Low Per Capita Income
Focus on Renewable Energy

Reduction in CO2 Emission


Energy demand growing with a x% CAGR during 20‐ ‐20‐‐ is
poised to drive solar energy growth in China
Growing Energy Demand Impact
• Finding 1 Energy Demand
• Finding 2
Mtoe
• Finding 3 X%
4,000
z3
z2
3,000
z1
2,000
1,000
0
20‐‐ 20‐‐e 20‐‐e
Electricity Demand Solar Power Generation
Twh Twh
8,000 Z% 500
x3
y3
x2 400
6,000
X%
x1 300
4,000
200
2,000 y2
100
y1
0 0
20‐‐ 20‐‐e 20‐‐e 20‐‐ 20‐‐e 20‐‐e
Source: Note: Mtoe – Mn tonnes of oil equivalent; TWh – Tera Watt Hours


Government subsidies play a key role in the development of
solar energy market in China
Solar Subsidies Impact
• Finding 1
• Finding 2
• Finding 3
• Finding 4

Solar Subsidy Program
Category A B
Applications
System Size
Subsidy

Other Terms

Source:


Growing emphasis on renewable energy to act as a major
growth driver for the solar energy market in China
Focus on Renewable Energy Impact
• Finding 1
• Finding 2
• Finding 3
• Finding 4

Renewable Energy Share Investment Potential
A C B D
Category 20‐‐ ‐‐ 20—e ‐ 20‐‐e
GW A
X Y
100% X1% X3% Y2% Y1% B
X2% Y3%
80% C
60% D
40% X4% Y4%
E
20%
F
0%
20‐‐ 20‐‐e
Source:


CO2 emission reduction mandate of x%‐y% by 20‐‐ to act as
a major growth driver for Chinese solar energy market
Reduction in CO2 Emission Impact
• Finding 1
• Finding 2
• Finding 3
• Finding 4
• Finding 5

Per Capita CO2 Emission Rise in Non Fossil Fuel Usage
tons %
8 x3 15
Z%
Z% x2
6
10 x1
4 x2
x1 5
2

0 0
19‐‐ 20‐‐ 20‐‐ Nov 20‐‐ 20‐‐e

Source:


Excess production leading to decline in module prices to act
as a major challenge to the solar energy market in China
Oversupply Condition Impact
• Finding 1
• Finding 2
• Finding 3
• Finding 4

Overcapacity in Production Solar Module Price
GW USD/Watt
x2
30 2.0
x1 X%
25
x1 1.5
20
x2
15 1.0
10
0.5
5
0 0.0
A B 20‐‐ 20‐‐
Source:


Government Initiatives ‐ Summary

China National Solar Policy

Distributed / Rooftop Solar PV

Large Scale Solar PV
Key Initiatives
`

Feed –in Tariff Program

National Renewable Energy Law

Incentives and Regional Subsidy


Solar Energy Development in China

Point 1 Point 2 Point 3

2009 2010 2011

• Point 6
Point 4 • Point 7
Point 5

Source:


Chinese government launched the X program to develop
the domestic solar market
X

• Finding 1
• Finding 2
• Finding 3

Major Solar Power Projects (20‐‐)
MW X Y Z
100 x1 x2 x3

80 E% x4
A% C%
60 x5
H% x6
40 F% J% x7 x8
L% x9 x10
20 B% D% K%
I%
G% M%
0
Province 1 Province 2 Province 3 Province 4 Province Province Province 7 Province Province 9 Province
5 6 8 10

Source:


Trends ‐ Summary

Solar Power Plant
Vertical Integration
Construction

Key
Trends

Focus on the Export Focus on Thin Film
Market Technology


Players in the market have been focusing on vertical
integration of the solar PV development
Vertical integration
• Finding 1
Players
• Finding 2
expanding
• Finding 3 vertically to
• Finding 4 reduce costs

Company A B C D E
Company 1 ‐ ‐ ‐ ‐ ‐

Company 2 ‐ ‐ ‐ ‐ ‐

Company 3 ‐ ‐ ‐ ‐ ‐

Company 4 ‐ ‐ ‐ ‐ ‐

Company 5 ‐ ‐ ‐ ‐ ‐

Source: China Solar Policy


Owing to its low cost, thin film solar cells are gaining
immense popularity in China
Focus on Thin Film Technology
• Finding 1
• Finding 2 Players are
focusing on thin
• Finding 3
film technology

Energy Output of Roof Top Solar Cells Solar Cell Production Split (20‐‐)

mn kw X%

30 x2
Z% A B
20

10
x1
0
Y%
20‐‐ 20‐‐e
Source:


Chinese share of global solar components exports reached
x% in 20‐‐ from y% in 20‐‐
Focus on Export Market
• Finding 1 China solar
• Finding 2 energy sector is
primarily driven
• Finding 3 by exports
• Finding 4

Growth in Export Share Production Share (20‐‐)
USD bn MW
x3 Country 1
30 12,000
x2 x1 Country 2
25 10,000 x2
+79% a n Country 3
20 8,000 b h
c Country 4
j
15 6,000 d i o Country 5
e k
10 4,000 f p Country 6
l
q
5 x1 2,000 g m Country 7
r
0 0 Country 8
20‐‐ 20‐‐ A B C
Source:


China is focusing on the construction of solar power plants
with a view to…
Solar Power Plant Construction (1/2)
• Finding 1
New plants to
• Finding 2 develop
• Finding 3 domestic solar
market

Solar Power Plant Construction

Type Region Value Capacity Companies Timeframe Status

‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐

Source:


Domestic Competition – Summary (1/2)
Net Income
400
Size of the Bubble Represents Market Capitalization in USD mn
380
360
340
320
x4
300
280
x3
260
240 x6
220
x5
200
180
160
140 x1
120 x2
100
80 Total Income
600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 3,000 3,200 3,400

Company 1 Company 5 Company 4
Company 3 Company 2 Company 6

Source:


Domestic Competition – Summary (2/2)

Total Income and Profit for Major Domestic Companies

0 500 1,000 1,500 2,000 2,500 3,000 3,500
USD
x1
Company 1
y1

x2
Company 2
y2

x3
Company 3
y3

x4
Company 4
y4

x5
Company 5
y5

x6
Company 6
y6

A B

Source:


Domestic Company –Company 1
Company Information Locations – China
‐‐,
Corporate Address
‐ Province‐ ‐ , China
Tel No. ‐
Fax No. ‐
Website ‐
Year of Incorporation 20‐‐
Ticker Symbol ‐
Stock Exchange ‐

Products and Services
Category Products/Services Headquarters

Cells Product 1, Product 2 Key People
Name Designation
PV module Service 1
Person 1 Designation
Others Product 1, Product 2 and Product 3

Source: Company Websites; Press Articles; Databases


Financial Snapshot Key Ratios
y‐o‐y
Total Income Profit Particulars change 2010 2009 2008 2007
Total Income
(2010‐09)
USD mn USD mn
Profit / Loss Profitability Ratios
1,500 x4 150 Operating Margin ‐ ‐ ‐ ‐ ‐
100 Net Margin ‐ ‐ ‐ ‐ ‐
1,000 x2
x1 x3 50 Profit Before Tax Margin ‐ ‐ ‐ ‐ ‐
500 Return on Equity ‐ ‐ ‐ ‐ ‐‐
0
Return on Capital Employed ‐ ‐ ‐ ‐ ‐
0 ‐50 Return on Working Capital ‐ ‐ ‐ ‐ ‐
20‐‐ 20‐‐ 20‐‐ 20‐‐ Return on Assets ‐ ‐ ‐ ‐ ‐
Financial Summary Return on Fixed Assets ‐ ‐ ‐ ‐ ‐
Cost Ratios
• The company earned a net profit of USD xmn in FY 20‐‐, as Operating costs (% of Sales) ‐‐ ‐‐ ‐‐ ‐‐ ‐‐
compared to net loss of USD y mn in FY 20‐‐
Administration costs (% of Sales) ‐‐ ‐ ‐ ‐ ‐
• The company reported total Income of USD x mn in FY 20‐‐,
registering an increase of y per cent over FY 20‐‐ Interest costs (% of Sales) ‐ ‐ ‐ ‐‐ ‐
• The company reported an operating margin of z per cent in FY 20‐‐ Liquidity Ratios ‐ ‐ ‐ ‐ ‐
an increase of z percentage points over FY 20‐‐ Current Ratio ‐ ‐ ‐ ‐ ‐

• The company reported debt to equity ratio of x in FY 20‐‐, a Cash Ratio ‐ ‐ ‐ ‐‐ ‐
decrease of y per cent over FY 20‐‐ Leverage Ratios ‐ ‐ ‐ ‐ ‐
Debt to Equity Ratio ‐ ‐ ‐ ‐ ‐
Financial Summary Debt to Capital Ratio ‐ ‐ ‐ ‐ ‐
Interest Coverage Ratio ‐‐ ‐ ‐ ‐ ‐
Indicators (dd/mm/yy) Efficiency Ratios ‐
Market Capitalization (USD) ‐ Fixed Asset Turnover ‐ ‐ ‐ ‐
Total Enterprise Value (USD) ‐ Asset Turnover ‐ ‐ ‐ ‐‐ ‐
Current Asset Turnover ‐ ‐ ‐ ‐ ‐
EPS (USD) ‐
Working Capital Turnover ‐ ‐ ‐ ‐‐ ‐
PE Ratio (Absolute) ‐ Capital Employed Turnover ‐ ‐ ‐ ‐
Source: Company Websites; Press Articles; Databases Improved Decline


Key Business Segments Key Geographic Segments
x1 Country 1 Country 6 Country 5 Country 3
100% Country 4 Country 2 Country 7
80%
60% y1 z2
100% y2 z1
40% x1 x2 y5 z4
y6 y3 z3 z5
20% x4 x5 x3 z6
y4
50% x6
0%
y7 z7
x7
20‐‐
0%
A 20‐‐ 20‐‐ 20‐‐

Key Recent Developments
Description News
• Company is one of the leading renewable energy players in the world and was earlier
Overview known as Y
• In 20‐‐, the company was renamed X after acquisition by the Z Group

• In 20‐‐ company announced the signing of MOU for the installation of roof‐top PV
New Business systems for Z
 PV modules having a total capacity of x MW will be supplied by the company for the project

Source:


Solar PV installation is expected to grow at a CAGR of x% to
reach Y MW during 20‐‐‐20‐‐
Led by supportive government policies the solar energy market in China is poised to witness rapid growth

Opportunities in the Government
Market Size
Market Initiatives
MW
Growing demand for x7 China adopted the
3,000 Z% x6
energy is expected to x5
national solar policy
emerge as a major
2,000 x4 and the renewable
growth driver for the 1,000 x2 x3 energy law to
x1
solar energy market promote the solar
0
20‐‐ 20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e 20‐‐e energy market

Geographical advantages Chinese government
coupled with solar announced the feed‐
subsidies by the in tariff to develop
government is expected the domestic solar
to boost the solar energy Challenges energy market
market in China
Chinese government
Target to reduce carbon • Oversupply Condition provided various
emission along with incentives and
• High Price of Electricity Generation
renewable energy regional subsidies to
utilization is expected to • Low Per Capita Income develop the solar
drive the solar energy energy market in
market growth China


Thank you for the attention
The Solar Energy Market – China report is a part of Netscribes’ Power Industry Series.
For more detailed information or customized research requirements please contact:

Jitendra Punjabi
Phone: +91 33 4064 6215
E‐Mail: jitendra.punjabi@netscribes.com

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