China installs 18.6 GW of systems in 2015, but part of that may never be able to connect

By Frank Xie, senior research analyst, IHS Technology

Bottom Line

• China installed 18.6 gigawatts (GW) of photovoltaic (PV) systems in 2015, while over 4.5 GW of systems have been carried-over to 2016 for grid connection.
• Chinese inverter shipments reached an historic record of 22.8 GW in 2015, out of which 7.5 GW were write-down and channel inventory. All of these excessive inverters will be finally installed in the PV systems, but will not necessarily be allowed to connect to the grid.
• The change in the product mix is happening more quickly than expected: In 2015, three-phase low power inverters of less than 99 kilowatts (kW) have become the second-largest inverter product type, with significant increase in utility-scale projects.
• Market consolidation deepened in 2015: The top six suppliers -- Huawei, Sungrow, TBEA, Sineng, Chint and KStar -- contributed to 95 percent of the total shipment market share.

Outlook and Analysis
China's National Energy Administration (NEA) reported that 15.1 GW of PV systems were connected to the grid in 2015; however, because of long grid-connection delays, IHS believes that there were many completed projects that were not connected to the grid during the year, and that the information from the NEA does not correspond to the actual amount of completed installations.
The number of installed systems in China that have not been connected increased greatly in 2015, due to time constraints of the grid-connection testing process. In fact, potential power curtailment and a high probability of missing grid connections forced gigawatt-scale projects to relocate from Ningxia to nearby provinces in 2016.

Since China is trying to shift its PV market structure from purely ground-mount to a mix of ground mount, commercial (Distributed PV) and residential (poverty relief PV projects), IHS expects the PV inverter product mix will change to accommodate more three-phase low-power inverters and string inverters.

About the IHS China PV Inverter Report
For the 2016 report the analyst team collected data from the top 20 inverter suppliers, three component suppliers and five EPC/integrators. Key supplier validations have been conducted for an entire month to ensure the key data are reliable and reflect the actual level of market presence for the company involved. To reflect the actual supply chain metrics in the forecast period, IHS builds its forecast based on a modelling of inventory for the previous year, carry-over to the next year and inverter write-downs into the model.

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