Analysis: China's pioneers to drive recovery in solar equipment demand
By Swetha Gopinath
(Reuters) - As China's solar panel makers venture into uncharted markets, the handful of companies that supply equipment for their plants are dusting off their order books to meet a revival in demand.
GT Advanced Technologies Inc GTAT.O and Meyer Burger Technology AG (MBTN.S: Quote) expect a new wave of orders from next year, when worldwide spending by solar companies is forecast to rise for the first time since 2011.
"Demand is coming from many more countries than previously, and the emerging markets are waking up to the potential from solar," said Edward Guinness, co-portfolio manager at Guinness Atkinson Asset Management in London.
China is the world's largest solar panel maker. Its companies, stung by a slowdown in the once-lucrative European market, are moving into Latin America, Africa, the Middle East and southeast Asia, where demand for solar power is rising fast.
Attracted by local incentives to invest in these markets, companies such as JinkoSolar Holding Co Ltd (JKS.N: Quote) and Canadian Solar Inc (CSIQ.O: Quote) view overseas production as a way around U.S. and European Union tariffs on China-made solar products.
There is a considerable global capacity overhang to work through - some analysts say 10 gigawatts - before demand will exceed installed capacity, meaning a rise in equipment orders will not be felt until 2014 at the earliest.
But new plants will be built in new locations. JinkoSolar, the first Chinese solar panel maker to return to profitability, is building a plant in South Africa to meet local production requirements, company spokesman Sebastian Liu said.
Canadian Solar, which has most of its manufacturing operations in China, is planning to build a 60 megawatt (MW) plant in Indonesia in partnership with a local solar panel maker to take advantage of a new feed-in tariff scheme. Continued...