Best stock to invest in – What Just Happened: Chinese Solar-Boom or Bubble?

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2016 was a wild year and not just for solar and after decades of
reliance on government incentives, subsidies and mandates the
global solar industry may be inured to unpredictability but the
industry as a whole should be wary of global trends.  Solar
PV expert Paula Mints looked at a number of the developments for
solar companies in the December edition of  SPV Market Research’s Solar
Flare.  Adapted for, this series of
articles is reprinted with permission.

China’s 2016 market for solar deployment soars to near 30-GWp: Solar
PV deployment in China ballooned in 2016 to double the goals of its
government and make no mistake, globally solar deployment in 2016
would be 15-GWp lower if developers in China had not continued
installing systems.

China serves as a perfect example of how the solar industry has
behaved for decades. Developers in China have not been paid the FiT
regularly, curtailment is high and yet developers (while complaining
of unprofitability) continued installing systems. This is, again, a
perfect example of solar industry behavior for decades. It is
illogical and trying to understand why an entire industry would
continue to act against its own self-interest could make a logical
person’s head explode.

Solar industry participants – globally – should pay close attention
to China’s economy. Recently the country’s bond market popped, debt
is high leaving banks and companies vulnerable and the country’s
shadow (grey) banking is close to out-of-control.
What it means for solar: The solar industry once again finds itself
vulnerable to one big market much as in the mid to late 2000s when
Europe consumed over 80% of module product. The excess of activity
in China could come to an abrupt halt leaving the in-dustry
overcapacity and desperate for a new multi-gigawatt market.

It is not too late for the solar industry to change. Growth for
unprofitable growth’s sake is not healthy. Some business is not
worth doing.

Previous article: SunEdison,

First Solar, and SolarCity

Paula Mints is founder of SPV Market Research, a
classic solar market research practice focused on gathering data
through primary research and providing analyses of the global
solar industry.  You can find her on T
witter @PaulaMints1
and read
her blog here.

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