GERMAN VIRTUES ARE MOST WELCOME IN CHINA, BUT THE RED CARPET IS NOT ROLLED OUT ANY MORE

Experts predict tremendous growth rates for the global photovoltaic market for the coming years. In October, the International Energy Agency (IEA) presented its latest report which confirms the positive outlook. Once again, China is rocketing the figures. We talked to ACEA (Asia Clean Energy Association) Consultant Frank Haugwitz who is also Head of Solarpromotion’s Intersolar Conference Development team about the challenges of the Chinese market, chances for German PV Companies in China and about future growth drivers of the renewable energy sector in China.

Solardirekt: „Mr. Haugwitz, currently China shows record figures in new photovoltaic installations. How long will this boom last?”

Frank Haugwitz: „Indeed, China has been reporting record figures for a while now. In 2016, the country impressed the global PV market with 34,54 GW. This year, the figures will reach 50 GW. Yet, I believe that the boom might be a thing of the past soon, perhaps in 2018 already. I expect another expansion of 35 to 40 GW which will mean a decrease of 10 to 15 GW. So far, the Chinese Energy Authority has not published any figures about the expected market development for 2018. Therefore, experts predict a slight fall. We will know more when the feed-in tariff for 2018 will be announced by the end of the year. Only recently, the Chinese National Renewable Energy Center (CNREC) recommended a development goal of 200 GW for the year 2020.”

Solardirekt: „In what state is the Chinese market currently?”

Frank Haugwitz: „Currently, the country boasts installations of around 120 GW to which the open field plants contribute approximately 95 GW. Yet, industrial and commercial roof plats are becoming more popular. In the first nine month of 2017, we saw roof installations of over 15 GW. In 2016, we only had roof installations of 4 GW, altogether adding up to 10 GW.”

Solardirekt: „In which sectors of the photovoltaic industry do you see the most promising growth perspectives?”

Frank Haugwitz: „I see growth potential for industrial and commercial roof plants. Also, the combination of agriculture and photovoltaic is promising as well as floating photovoltaic plants on lakes and reservoirs.”

Solardirekt: „What are challenges and peculiarities of the local market?”

Frank Haugwitz: „Firstly, the exotic culture and language are challenges. Often, new regulations are only announced at short notice. Furthermore, projects are realised much quicker than for example in Germany. In some regions of the country you have close off the photovoltaic plants. Finally, the feed-in tariff can be paid with two years delay.”

Solardirekt: „Where do you see the most promising perspectives for German companies from the photovoltaic sector, in which market sectors and regions of the country?”

Frank Haugwitz: „Thanks to their extensive experience in technical concepts for roof plants, German companies are in an advantageous position. They should offer their services to German companies with production facilities in China. Here are many international companies which are eager to get a foothold in the Chinese market, either because they believe in the power of the market or due to the economic advantages. They will be open to roof installations.”

Solardirekt: „What are the competitive advantages of German photovoltaic companies in China?”

Frank Haugwitz: „In Chinese Germany means „Country of virtues”. Going along with this translation is the general appreciation of the distinct German quality consciousness, respectively quality work. However: German companies need to be persistent when trying to gain ground in China. Fast deals are not sustainable, and the red carpet is not rolled anymore.”

Solardirekt: „What are do’s and don’t’s when entering the Chinese market?”

Frank Haugwitz: „I highly recommend cooperating with a local partner. This partner must be familiar with the local administrations and have a contact network in the respective province. Yet, it takes time to find a reliable partner.”

Solardirekt: „How can ACEA help German companies to gain ground in China?”

Frank Haugwitz: „In the beginning, ACEA can support and evaluate the analysis of the market potential. The result should be the basis for all further plans. If there is sufficient market potential, we can evaluate the different possibilities, for example which market sector or region is most promising, or which local partners could support you. ACEA also helps companies from abroad, to find and participate in events and to establish local contacts. In fact, we are able to cover the complete value-added chain of the market entry.”

Solardirekt: „What will be the next big issue in the renewable energy sector in China?”

Frank Haugwitz: „The storage of electric energy will be a major issue. The storage issue is high on the industrial policy agenda of the Chinese government. Only recently, the government presented several five-year plans for e-mobility and stationary applications. I believe that the storage issue has the potential to become Solar PV 2.0.”

Solardirekt: “Mr. Haugwitz, thank you very much for the interview.”