PETALING JAYA: There are expectations that the oversupply situation in the solar panel manufacturing industry could ease in the months ahead, analysts say.
This follows reports that leading solar panel manufacturers from China including LONGi Green Energy Technology Co Ltd, Tongwei Co Ltd and JA Solar Holdings Co Ltd continued to report losses on capacity over-expansion.
Kenanga Research said a meaningful recovery could take place next year, while at the same time it is also expected the manufacturers to lay the groundwork for adjusting their manufacturing capcity.
“We anticipate that industry consolidation and upcoming factory closures will contribute to rebalancing the market.
“Moreover, China-based solar manufacturers are halting production in their South-East Asian plants due to the weak export outlook following a US tariff increase on solar panels imported from China that rose to 50% from 25% as of Aug 1,” the research house said.
Notably, Longi has halted all five production lines at its plant in Vietnam and is also winding down its operations in Malaysia while Trina Solar Co Ltd is shutting down its plants in Thailand and Vietnam.
However, the overcapacity still remains and despite recent efforts by manufacturers, Kenanga Research said the global supply of solar panels remains excessive.
The research house maintained its forecast for average solar module prices in the 2024 to remain relatively unchanged at 10 US cents per watt, compared with 18 US cents per watt in 2023.
The research house added that developments in the domestic renewable energy scene are forecast to sustain the sector until around 2028.
