market research report : solar energy in china 2012

Solar Energy in China

March 2012

2SOLAR ENERGY IN CHINA 2012.PPT

Executive Summary

Market

Drivers & Challenges

Competition

China accounted for X% of the global PV installed capacity in 20‐‐Chinese solar PV installation base is expected to reach X MW growing with a CAGR of Z% during 20‐‐ ‐ ‐‐

Company 4Company 2 Company 3Company 1

Major Players

Government Initiatives

China National Solar PolicyDistributed / Rooftop Solar PV Large Scale Solar PV

Drivers: Challenges:

Vertical IntegrationFocus on Thin Film TechnologyFocus on the Export MarketSolar Power Plant Construction

Trends

• Growing Energy Demand• Geographical Advantages• Solar Subsidies• Focus on Renewable Energy• Reduction in CO2 Emission

• Oversupply Condition• High Price of Electricity Generation• Low Per Capita Income

Feed –in Tariff ProgramNational Renewable Energy Law Incentives and Regional Subsidy


•Introduction

•Market Overview• Global

• China

•Drivers & Challenges

•Government Initiatives

•Trends

•Mergers & Acquisitions

•Competition

•Key Takeaway


Global solar energy market has been growing dynamically with Y dominating z% to the solar PV market

•Global PV installed capacity is expected to reach X GW growing with a CAGR of Z% during 20‐‐ ‐ ‐‐

• In 20‐‐, Y dominated the global solar photovoltaic market

Y had a y% share of the global PV market in 20‐‐

• China accounted for x% of the global solar heating capacity in 20‐‐

Global Market Overview (1/2) Solar Installed Capacity and Growth

Solar Heating Capacity (20‐‐) Solar PV Capacity ( 20‐‐ )

Source:

0

50

100

150

200

GW

Z%

20‐‐e

a2

20‐‐

a1

H%

G%F%

E%

D%

C%B%

A%

Others

Country 7

Country 6

Country 5

Country 4

Country 3

Country 2

Country 1D%

C%

B%

A%

Others

Country 3

Country 2

Country 1


Investment in Solar energy with a magnitude of USD y bn is set to transform the energy mix of the world by 20‐‐

•Global investments in solar technology is expected to be x that of 20‐‐ reaching USD y bn by 20‐‐

• Top 5 solar companies accounted for y% of the global solar PV cell market in 20‐‐

Chinese companies accounted for y% share

•Global solar panel prices have declined to USD x/Watt with a CAGR of z% during 20‐‐‐‐‐

Global Market Overview (2/2) Global Investment in Solar Technology

Global Solar Panel Prices Solar PV Cell Market – Top 5 Companies

Source:

0

1

2

3

4

USD/watt

Z%

20‐‐

x2

20‐‐

x1

0

2

4

6

%

Company 5

x5

Company 4

x4

Company 3

x3

Company 2

x2

Company 1

x1

0

20

40

60

80

100

USD bn

Z%

20‐‐e

x2

20‐‐

x1


Major global initiatives towards developing the solar energy market

19‐‐ 20‐‐

• Point 4

20‐‐19‐‐

• Point 5

20‐‐

• Point 6 • Point 7 • Point 8

Point 1 Point 2

Point 3

Source:


Aided by government support the Chinese solar energy market is expected to witness dynamic growth

•Solar PV is expected to drive the Chinese solar energy market with dynamic growth

• Solar PV installed capacity is expected to reach xMWgrowing with a CAGR of y% during 20‐‐ ‐ ‐‐ Chinese government has undertaken several measures to promote solar energy utilization in China

• In 20‐‐, large scale solar applications and Building Integrated Photo Voltaic accounted for z% of the solar installations in China Grid connected PV system in buildings is expected to have a y% share of solar energy distribution by 20‐‐

Overview Solar Installed Capacity

Solar Installation by Application (20‐‐)

Source:

Expected Market Distribution (20‐‐)

B%

A%

E%

D%

C%

E

D

C

B

A

0

500

1,000

1,500

2,000

2,500

3,000

MW

Z%

20‐‐e

x7

20‐‐e

x6

20‐‐e

x5

20‐‐e

x4

20‐‐e

x3

20‐‐

x2

20‐‐

x1

a1

a2

a3 C

B

A


Drivers and Challenges ‐ Summary

Growing Energy Demand

Focus on Renewable Energy

Drivers

Geographical Advantages

Solar Subsidies

Reduction in CO2 Emission

High Price of Electricity Generation

Low Per Capita Income

Oversupply Condition

Challenges


Energy demand growing with a x% CAGR during 20‐ ‐20‐‐ is poised to drive solar energy growth in China

Growing Energy Demand Impact

Source:

• Finding 1

• Finding 2

• Finding 3

Solar Power GenerationElectricity Demand

Energy Demand

0

1,000

2,000

3,000

4,000z3

20‐‐e

z2

20‐‐

z1

MtoeX%

20‐‐e

0

2,000

4,000

6,000

8,000

x2

20‐‐

Twh

20‐‐e

Z%

20‐‐e

x3

x1

Note: Mtoe – Mn tonnes of oil equivalent; TWh – Tera Watt Hours

0

100

200

300

400

500

Twh

y2

X%

20‐‐e

y3

20‐‐e20‐‐

y1


Government subsidies play a key role in the development of solar energy market in China

A

Other Terms

Subsidy

System Size

Applications

BCategory

Solar Subsidies Impact

Source:

Solar Subsidy Program

• Finding 1

• Finding 2

• Finding 3

• Finding 4


Growing emphasis on renewable energy to act as a major growth driver for the solar energy market in China

•Finding 1• Finding 2• Finding 3• Finding 4

Focus on Renewable Energy Impact

Source:

D

C

B

A

20‐‐ ‐‐

F

E

20—e ‐ 20‐‐eCategory

Investment PotentialRenewable Energy Share

GW

100%

80%

60%

40%

20%

0%20‐‐e

Y

Y4%

Y3%Y2% Y1%

20‐‐

X

X4%

X2% X1% X3%

DBCA


CO2 emission reduction mandate of x%‐y% by 20‐‐ to act as a major growth driver for Chinese solar energy market

Reduction in CO2 Emission Impact

Source:

• Finding 1• Finding 2• Finding 3• Finding 4• Finding 5

Per Capita CO2 Emission

0

2

4

6

8

tons

Z%

20‐‐

x3

20‐‐

x2

19‐‐

x1

0

5

10

15

%

Z%

20‐‐e

x2

Nov 20‐‐

x1

Rise in Non Fossil Fuel Usage


Excess production leading to decline in module prices to act as a major challenge to the solar energy market in China

•Finding 1• Finding 2• Finding 3• Finding 4

Oversupply Condition Impact

Source:

Overcapacity in Production Solar Module Price

0

5

10

15

20

25

30

GW

B

x2

A

x1

0.0

0.5

1.0

1.5

2.0

USD/Watt

X%

20‐‐

x2

20‐‐

x1


Government Initiatives ‐ Summary

`

China National Solar Policy

Incentives and Regional Subsidy

National Renewable Energy Law

Large Scale Solar PV

Key Initiatives

Feed –in Tariff Program

Distributed / Rooftop Solar PV


Solar Energy Development in China

20112009

• Point 6

2010

• Point 7

Point 1 Point 2

Source:

Point 3

Point 4 Point 5


Chinese government launched the X program to develop the domestic solar market

Source:

X

•Finding 1

•Finding 2

•Finding 3

0

20

40

60

80

100 x3

G%

F%

E%

Province 2

x2

D%

C%

Province 1

x1

B%

A%

Province 10

x10

Province 9

x9

Province8

x8

Province 7

x7

Province6

x6

M%

L%

Province5

x5

K%

J%

Province 4

x4

I%

H%

Province 3

MW X ZY

Major Solar Power Projects (20‐‐)


Trends ‐ Summary

Focus on Thin Film Technology

Focus on the ExportMarket

Vertical IntegrationSolar Power Plant

Construction

Key Trends


Players in the market have been focusing on vertical integration of the solar PV development

•Finding 1

• Finding 2

• Finding 3

• Finding 4

Vertical integration

Players expanding vertically to reduce costs

Source: China Solar Policy

‐

‐

‐

‐

‐

D

‐

‐

‐

‐

‐

E

‐

‐

‐

‐

‐

B

‐

‐

‐

‐

‐

A

‐Company 2

‐Company 1

‐Company 5

‐Company 4

‐Company 3

CCompany


Owing to its low cost, thin film solar cells are gaining immense popularity in China

•Finding 1

• Finding 2

• Finding 3

Focus on Thin Film Technology

Players are focusing on thin film technology

Source:

Energy Output of Roof Top Solar Cells Solar Cell Production Split (20‐‐)

0

10

20

30

mn kw

Z%

20‐‐e

x2

20‐‐

x1

X%

Y%

BA


Chinese share of global solar components exports reached x% in 20‐‐ from y% in 20‐‐

• Finding 1

• Finding 2

• Finding 3

• Finding 4

Focus on Export Market

China solar energy sector is primarily driven

by exports

Source:

Growth in Export Share

0

5

10

15

20

25

30

USD bn

+79%

20‐‐

x2

20‐‐

x1

0

2,000

4,000

6,000

8,000

10,000

12,000

C

x3

rq

p

o

n

B

x2

m

lk

ij

h

A

x1

g

MW

f ed

cba

Country 8

Country 7

Country 6

Country 5

Country 4

Country 3

Country 2

Country 1

Production Share (20‐‐)


China is focusing on the construction of solar power plants with a view to…

•Finding 1

• Finding 2

• Finding 3

Solar Power Plant Construction (1/2)

Source:

Solar Power Plant Construction

‐‐‐‐‐‐‐

‐

‐

‐

Timeframe

‐

‐

‐

Companies

‐

‐

‐

Status

‐

‐

‐

Value

‐

‐

‐

Region

‐‐

‐‐

‐‐

CapacityType

New plants to develop

domestic solar market


80

100

120

140

160

180

200

220

240

260

280

300

320

340

360

380

400

600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 3,000 3,200 3,400

x1

x2

x5

x4

x3

Net Income

Total Income

x6

Domestic Competition – Summary (1/2)

Source:

Size of the Bubble Represents Market Capitalization in USD mn

Company 6

Company 4

Company 2

Company 5

Company 3

Company 1


Domestic Competition – Summary (2/2)

Source:

Total Income and Profit for Major Domestic Companies

0 500 1,000 1,500 2,000 2,500 3,000 3,500

x4

Company 3y3

x3

Company 2y2

x2

Company 1y1

x1USD

Company 6y6

x6

Company 5y5

x5

Company 4y4

BA


Domestic Company –Company 1

Key People

Source: Company Websites; Press Articles; Databases

Products and Services

Company Information Locations – China

‐Stock Exchange

Corporate Address‐‐,

‐ Province‐ ‐ , China

Tel No. ‐

Fax No. ‐

Website ‐

Year of Incorporation 20‐‐

Ticker Symbol ‐

Product 1, Product 2 and Product 3Others

Service 1PV module

Category Products/Services

Cells Product 1, Product 2

Name Designation

Person 1 Designation




Headquarters


Source: Company Websites; Press Articles; Databases

Financial Snapshot Key Ratios

Financial Summary


• The company earned a net profit of USD xmn in FY 20‐‐, as compared to net loss of USD y mn in FY 20‐‐

• The company reported total Income of USD x mn in FY 20‐‐, registering an increase of y per cent over FY 20‐‐

• The company reported an operating margin of z per cent in FY 20‐‐an increase of z percentage points over FY 20‐‐

• The company reported debt to equity ratio of x in FY 20‐‐, a decrease of y per cent over FY 20‐‐

Financial Summary

Profit / Loss

Total Income

0

500

1,000

1,500

‐50

0

50

100

150

ProfitUSD mn

Total IncomeUSD mn

20‐‐

x4

20‐‐

x3

20‐‐

x2

20‐‐

x1

Indicators (dd/mm/yy)

Market Capitalization (USD) ‐

Total Enterprise Value (USD) ‐

EPS (USD) ‐

PE Ratio (Absolute) ‐

Particulars y‐o‐ychange (2010‐09)

2010 2009 2008 2007

Profitability Ratios

Operating Margin ‐ ‐ ‐ ‐ ‐

Net Margin ‐ ‐ ‐ ‐ ‐

Profit Before Tax Margin ‐ ‐ ‐ ‐ ‐Return on Equity ‐ ‐ ‐ ‐ ‐‐Return on Capital Employed ‐ ‐ ‐ ‐ ‐Return on Working Capital ‐ ‐ ‐ ‐ ‐

Return on Assets ‐ ‐ ‐ ‐ ‐

Return on Fixed Assets ‐ ‐ ‐ ‐ ‐

Cost Ratios

Operating costs (% of Sales) ‐‐ ‐‐ ‐‐ ‐‐ ‐‐

Administration costs (% of Sales) ‐‐ ‐ ‐ ‐ ‐

Interest costs (% of Sales) ‐ ‐ ‐ ‐‐ ‐

Liquidity Ratios ‐ ‐ ‐ ‐ ‐

Current Ratio ‐ ‐ ‐ ‐ ‐

Cash Ratio ‐ ‐ ‐ ‐‐ ‐

Leverage Ratios ‐ ‐ ‐ ‐ ‐

Debt to Equity Ratio ‐ ‐ ‐ ‐ ‐

Debt to Capital Ratio ‐ ‐ ‐ ‐ ‐

Interest Coverage Ratio ‐‐ ‐ ‐ ‐ ‐

Efficiency Ratios ‐

Fixed Asset Turnover ‐ ‐ ‐ ‐

Asset Turnover ‐ ‐ ‐ ‐‐ ‐

Current Asset Turnover ‐ ‐ ‐ ‐ ‐

Working Capital Turnover ‐ ‐ ‐ ‐‐ ‐Capital Employed Turnover ‐ ‐ ‐ ‐

Improved Decline


Source:

Key Business Segments Key Geographic Segments


Key Recent Developments

Description News

Overview

• Company is one of the leading renewable energy players in the world and was earlier known as Y

• In 20‐‐, the company was renamed X after acquisition by the Z Group

New Business• In 20‐‐ company announced the signing of MOU for the installation of roof‐top PV systems for Z PV modules having a total capacity of x MW will be supplied by the company for the project

0%

20%

40%

60%

80%

100%

20‐‐

x1

A0%

50%

100%

20‐‐

z7

z6 z3 z5z4z1

20‐‐

y7

y6y4

y5y3y2y1

20‐‐

x7x6

x4 x5 x3x2x1

z2

Country 2

Country 5

Country 7

Country 3Country 6

Country 4

Country 1


Solar PV installation is expected to grow at a CAGR of x% to reach Y MW during 20‐‐‐20‐‐

Led by supportive government policies the solar energy market in China is poised to witness rapid growth

Growing demand for energy is expected to emerge as a major growth driver for the solar energy market

Opportunities in the Market Market Size

Government Initiatives

Challenges

Geographical advantages coupled with solar subsidies by the government is expected to boost the solar energy market in China

Target to reduce carbon emission along with renewable energy utilization is expected to drive the solar energy market growth

• Oversupply Condition

• High Price of Electricity Generation

• Low Per Capita Income

China adopted the national solar policy and the renewable energy law to promote the solar energy market

Chinese government announced the feed‐in tariff to develop the domestic solar energy market

Chinese government provided various incentives and regional subsidies to develop the solar energy market in China

0

1,000

2,000

3,000

MW

Z%

20‐‐e

x7

20‐‐e

x6

20‐‐e

x5

20‐‐e

x4

20‐‐e

x3

20‐‐

x2

20‐‐

x1


Thank you for the attention

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