China raises solar power capacity target to 21GW by 2015

Following the overcapacity and subsidy cuts in Europe, China moves to boost domestic installations, says Nomura.

In a release, China plans to increase its solar target to 21GW by 2015 (earlier plan: 15GW) which includes 1GW of solar-thermal. With the solar industry continuing to suffer from overcapacity and subsidy cuts in Europe, China has taken a number of steps to boost domestic installations including: 1) Golden Sun Program which has sanctioned 1.7GW of domestic projects in FY12F; 2) BIPV program which provides capital subsidies of RMB7.5/W for solar projects; and 3) National FIT of RMB1.0/kWh.

Here's more from Nomura:

With macroeconomic concerns remaining and project financing in Europe remaining a concern, we believe the government plans to both aid domestic manufacturers and increase domestic installations through this higher target.

While this is positive for sentiment, we believe the installation targets by China-based solar companies of ~5GW in 2012F were already imputing previous installation targets to be easily met. In our numbers we impute 21.8GW over FY12~14F, and as such see minimal impact to our estimates. In FY12F, we have seen most Chinese manufacturers
increasing their focus on China with: 1) Yingli expecting the domestic market to account for 30% of its revenue in FY12F; and 2) Jinko Solar,which expects 12% of its revenues to come from China, has said that China could see 5GW of installations in FY12F.

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