Solardirekt: What about the German-Chinese business relationships in the PV-sector?
Daniel Eckmann: With a trade volume of almost 164 billion Euro (2015) Germany is by far China’s most important European trade partner, with a share of almost 30%. Vice versa, China is the number two country of origin of German imports (EU countries are at No. 1). In 2001, China joined the World Trade Organization (WTO). Since then, the commercial customs fell from 43.3% in 1992 to less than 10% in 2005. Compared to other industries, many products from the renewable energy sector benefit from significant global trade advantages. For example, wind turbines are declared toll-free and the sales tax is significantly lower – 8.5% instead of 17%. On the other hand, the import of heat pumps is taxed at 10%. Also, you must pay the complete value-added tax of 17%. Since May 1, 2014, European exporters of polysilicon, a component of PV-plants, have to pay toll on their products. Thanks to China’s integration into the WTO, the import quota for Chinese companies, joint-ventures and wholly foreign owned enterprises have been expiring. In addition to this, the Chinese government cancelled the regulations for the sourcing of utilities and raw materials from China.
The Chinese economy is developing from an export-driven economy to a sustainable, innovation-driven growth system which supports the domestic consumption. This change offers great chances for the German economy and German companies. In January 2014, the first Chinese trade chamber was opened in Europe. It was established to foster business relationships and investments between China and the EU. In May 2016, Germany and China agreed on a bilateral reinsurance framework for national export loan warranties. This agreement means a significant improvement for German exporters. There is a great chance for the players from the renewable energy, water and waste treatment and e-mobiliy sectors to achieve good profits with green technologies and German know-how in China. In these fields, China needs specialists.
Solardirekt: What is the current situation of the Chinese PV-market?
Daniel Eckmann: Due to trade disputes and dumping accusations, the export of PV-modules to Europe and to the USA fell in 2012 at 35% compared to the previous year. Against the background of the globally difficult sales situation and excess capacities, China consistently supports the domestic market. Yet, despite the decrease of the export rates to the USA and to Europe, China still holds the biggest market share in the shipping of PV-modules. Until 2014, over 50% of all PV-modules world-wide are supposed to come from China. Therefore, the decline of the US and European markets was balanced by the growth of the Asian market. In 2015, around 30,000 people used to work in the German PV-industry and the export rate was around 70%. Today, around 80% of all PV-modules which are installed in Germany come from Asia, mostly from China.
Solardirekt: In which sectors of the renewable energy market do you see the most promising perspectives for German companies for the coming years? Why?
Daniel Eckmann: Against the background of the prevailing excess capacities in the Chinese solar industry, the decentralised electrical power supply bears enormous potential. In the last years, the module prices fell continuously and PV-projects were consistently supported by the government. In 2016, China had 77.4 GW at its disposal, an increase of around 80% compared to the previous years and was able to double its new installations up to 34.5 GW. As a result, the share of solar energy in the national electricity power supply grew up to 4.7% (2016: 1,645.8 GW). Globally, China was/is leading in overall PV-capacities and in new installations. Still, the major share of solar energy is produced on open field plants. In 2016, the share was around 87%. In the same year, approximately 10.3 GW were generated by decentralised plants. In the coming years, almost 60% of the annual new installations will fall to decentralised PV-plants. Furthermore, China expands will expand its capacities in the field of high-power PV-plants (1.5kw). Also, solar energy plants will be sponsored with 1.18 RMB/kwh (0.16 EU/kwH). Until 2020, China aims to grow its installed capacity up to 5 GW.
To be continued!