Even though China is limited subsidies for new solar power, Asia still
leads the global market, consultant group Wood Mackenzie found.
While a Chinese decision to limit subsidies on new solar project curbs
global growth, some sectors will benefit from the subsequent oversupply,
analysis finds.
The National Energy Administration in China in June scrapped new
subsidies for utility-scale solar power stations. Analysis compiled by
consultant group Wood Mackenzie found that Chinese demand for solar
power this year declines 40 percent as a result.
China's decision to cut tariffs was designed to slow the accelerated
growth in the country's solar power capacity. The country last year
accounted for about 60 percent of new solar installations and the new
measure imposed strict quotes on new capacity, eliminating generous
subsidies for projects outside that quota.
Nevertheless, Wood Mackenzie found that three countries - China, India
and Japan - will account for the bulk of the new installations over the
next two years.
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"Despite the slowdown in the Chinese market, as well as China's and
Japan's declines year-over-year, Asia will continue to account for at
least 50 percent of the global annual install through 2020," the
consultant group's emailed report read.
Because Chinese installation of new solar power capacity declines 30
percent from initial expectations through 2022, global demand cools off
as well. Global demand for solar projects in 2018 declined 17 percent
compared with Wood Mackenzie's forecast before the Chinese subsidy
announcement.
In June, the International Energy Agency found total global energy
investments declined 2 percent from 2016 to reach $1.8 trillion last
year. Financial support for renewable energy, which accounted for about
60 percent of the total spending for power generation, declined 7
percent.
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IEA Executive Director Fatih Birol said the decline threatens the
expansion of low-carbon alternatives as well as climate goals set by
nations and blocs.
Wood Mackenzie found, however, that the price for solar modules drops
because of market saturation resulting from the slowdown in the Chinese
market.
"Some markets will see increased installation, particularly Europe,
though the benefits will not be realized until 2019 and beyond," the
report read.
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China, the second-largest economy in the world behind the United States,
saw record spending in solar power, accounting for about 45 percent of
the total last year. For all energy investments, China took in about 20
percent of the world total.
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Aug 8, 2018

China cooling has mixed solar power impact
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