Rumors have it that the Ministry of Economy, Trade, and Industry of Japan (METI) is considering revising PV subsidy downward to JPN￥34/kWh in 2014 and JPN￥30/kWh in 2015. According to EnergyTrend, a research division of TrendForce, whether Japan’s subsidy cut will come true or not, it’s projected that Japan’s market demand in both 2014 and 2015 will remain strong. However, if the rumor turns out to be true, the amount of PV system installation is likely to increase substantially in Japan and in turn benefit Taiwanese manufacturers.
As indicated by EnergyTrend’s investigation, Japan may revise PV subsidy downward by around 10% in 2014 and 2015, which is within the range estimated by the industry. Thus, it will still bring a certain level of profit and Return-on-Investment (ROI) to the manufacturers. EnergyTrend projects that Japan’s ROI will be around 17% if calculating based on the subsidy rate in 2015 while taking relevant cost changes into consideration. In contrast to other countries, Japan remains a region with a lot of profit in the global PV market.
With the Heisei 25 fiscal year entering into the second half and the weather being increasingly less suitable for construction, EnergyTrend believes that the amount of PV system installation in Japan will increase significantly by the end of March 31st, 2014. Furthermore, although 19GW demand awaits Japan in 2014, the growth of grid can’t seem to catch up with that of PV system installation. Hence, PV demand is likely to grow steadily starting from 2015.
In terms of the industrial side, EnergyTrend believes that Taiwanese manufacturers will be in good shape due to the OEM demand from Japan. Because Japan puts most of their focus on systems, they normally choose to outsource modules and cells, which benefits Taiwanese and Chinese manufacturers. The Taiwanese manufacturers, in particular, tend to work closely with Japanese manufacturers on systems and outsourcing opportunities, as the partnership between Inventec and Toshiba shows. Meanwhile, the business model of using cells from Taiwan and modules from China is continuing to be implemented. By coming up with better value, they are hoping to create more demand. In 4Q13, Taiwanese manufacturers will be more aggressive towards module capacity expansion. Apart from obtaining outsourcing opportunities from Japanese manufacturers, they are also considering the options of producing cells and modules in Taiwan, and establishing a possible brand in China.
Judging from the spot market’s overall performance, Chinese polysilicon price remains high. Since there’s not much room for price negotiation, this week’s price remains steady. For wafers, recent shipments of major Chinese manufacturers are concentrated in the local market, which allows non-Chinese manufacturers to raise the price. Moreover, clients have shifted their needs toward high-efficiency products, thus this week’s price continues to go upward. For mono-si wafers, this week’s average price continue to fluctuate, a 0.75% drop. For cells, certain Chinese manufacturers successfully revised the price of high-efficiency products upward. Yet, the price of normal-grade products remains steady. This week’s average price increased with a 0.26% rise. For modules, Japan is likely to revise the subsidy downward. It’s estimated that the amount of PV system installation will increase substantially in the short run. Certain module manufacturers have started to stock up in case the demand will be too large. This week’s module price remains stable.