China to install excess solar panel production, says CEOs

China may double its installations of solar panels this year, according to CEOs from two of the industry’s top five manufacturers.

In effect, the country wil absorbing excess production that depressed prices and margins in 2011.

Suntech Power Holdings Co. CEO Zhengrong Shi estimated the nation may add 4 gigawatts or more of panels, and Trina Solar Ltd. CEO Jifan Gao expects 5 gigawatts. That compares with about 2.2 gigawatts installed in the country in 2011, more than double the capacity of the average nuclear reactor in the U.S.

The cost of solar panels fell 47 percent last year as Chinese manufacturers led by Suntech boosted production, winning market share from Western rivals such as Q-Cells SE and First Solar Inc. With China’s government pushing to consolidate the industry, the remarks from

Shi and Gao suggest rising demand may support the biggest panel manufacturers.

“It’s a huge market,” Gao said through an interpreter in an interview at the World Economic

Forum’s annual meeting in Davos, Switzerland. “Excellent companies with good technology,

balance sheets and also brands will win out. A lot of companies without those advantages

will be taken away.”

Suntech’s view shows that growing demand in China may also drive a solar recovery this year.

Jenny Chase, head of solar analysis at New Energy Finance, said the forecasts assume China will meet and not surpass the government’s target to have 15 gigawatts of solar capacity by 2015. The estimates from Suntech and Trina suggest that China, like Germany, Spain and Italy, may have trouble keeping a lid on installations once developers start understanding how subsidies will apply to their projects.

China, the manufacturing hub for seven of the eight biggest solar panel makers, until 2010 accounted for less than 3 percent of the market for photovoltaics, with 490 megawatts installed. Installations more than quadrupled last year.

Shi of Suntech said China’s market was “exciting” and the market there this year could be “4 gigawatts or more.” Suntech is the biggest supplier of solar photovoltaic panels, and Trina is the fifth largest.