Annual Decline for Feed-in Tariff Should be Set at 4% to Meet 2025 PV Goals
August 20, 2019 | TrendForceEstimated reading time: 2 minutes
According to the latest “Solar Powering Taiwan: Special Report” by EnergyTrend, a division of TrendForce, Taiwan's PV installations made it past the 1GW mark for the first time in 2018, attracting many investors to set up PV power plants in Taiwan. The Bureau of Energy has therefore increased their installation goal for 2019 to 1.5GW. In order to reach this goal, they will be focusing on four big areas: Taiwan Sugar demonstration projects; industrial factory roofing promotion projects; large developer promotion projects; and projects applied for approval in 2018.
TrendForce Analyst Sharon Chen points out that, in order to deal with the very first stages of energy liberalization, Taiwan requires the use of FiTs (Feed-in Tariffs) to widen citizen participation. Thus, in order to reach 20GW in total accumulated installations by 2025, it is suggested that the decline rate of the average FiT be set at around 4%. Given the average FiT in 2019, 5.4258 NTD/kWh, it is estimated that the average FiT for 2025 will come to around 4.2472 NTD/kWh, and power plant investors may still receive the most basic IRR (internal rate of return).
Lowering FiTs by the year has become a global trend. Since power plant investors will necessarily seek to lower the LCOE (Levelized cost of electricity), it has become the investors' top concern to find ways on how to use power gain modules and inverters that increase electricity generation while keeping the CAPEX and OPEX low. Naturally, this forms the key to gaining a foothold in the market for module and inverter suppliers.
URE Safely Sits the Shipment Throne for 1H19, while AUO's Shipments Grow
Analyzing Taiwan's module market, URE still takes the throne in 1H19, with AUO taking second, and CSI taking third, which is the first time it has done so. Compared to last year, the Taiwan market took up 10% less in share of all URE shipments in 1H19. Thus we see that companies have gradually adjusted their global strategies and lowered participation in the Taiwan market. AUO followed closely behind, and grew significantly in shipments compared to 2018 after adjusting sales strategies.
TSEC's shipments for 1H19 were mainly the contributions of supplying large-scale projects located in Chiayi, whereas shipments for the indicative ground-mounted 150MW PV system project in Qigu, Tainan this March will begin in 2H19. TSEC is therefore predicted to jump forward again in shipment rankings in 2019. Notably, TSMMC (Motech + Giga Solar) jumped all the way to sixth place after winning a project from a large EPC developer.
VPC Certifications are Here, with Taiwan's Inverters Shipment Rankings to Reshuffle Yet Again
Taiwan has been enforcing VPCs (Voluntary Product Certifications) for inverters since May 20, 2019, with most Taiwanese inverter suppliers beginning to take up VPCs since 2018. Hence, when looking at Taiwan's inverter shipments from 1H19 onwards, we see Taiwanese suppliers standing out from the rest. In Taiwan markets, Delta still reigns as the champion in inverter shipments, while other suppliers went through another reshuffling. Among them, Goodwe, being an early entrant in the Taiwan market and one of the earlier suppliers to test for VPC compliance, reached fourth place in shipments for 1H19.
German inverter giant SMA saw a noticeable fall in shipments in 1H19, which may be attributed to unclear strategies for the Taiwan market following its exit from China's market. Satcon, who won second place in 2018 but has yet to acquire a VPC and has made adjustments to its agent strategies, saw fewer sales in 1H19.
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