China’s decision last week to end its subsidies program for solar panel manufacturers has caused global solar stocks to plummet, as the world’s largest producer looks set to wipe up to 20 gigawatts from the world’s annual supply.
One market forecast, made by HIS Markit in April, put 2018’s global solar installations at 113GW with 53GW coming from China. However, on June 1st the Chinese government announced it will not be building more solar power stations this year and will cut off its domestic firms from generous state subsidies which kept prices at a steady low.
According to calculations made by Bloomberg, the hit to global demand will reduce prices by 35% to 24 cents per watt.
US firms, which had been looking forward to more favourable market conditions after President Trump imposed tariffs on the import of Chinese solar panels earlier this year, took a dive on the stock market. First Solar Inc. had its rating changed from buy to sell by one major market analyst and has lost almost a quarter of its market value in the last week. The US’s second largest solar company, SunPower, fell 12% in the same period.
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