Developing | Chinese solar power stocks plunge as government moves to contain industry size

Shares in Sungrow Power Supply and GCL-Poly Energy Holdings led Chinese solar power stocks lower in mainland China and Hong Kong on Monday, after the government moved to rein in the expansion of the industry, by suspending the allocation of more quotas for new farms and cutting subsidies in a surprising decision.

Sungrow Power, the country’s biggest maker of inverters for solar and wind power, tumbled by the 10 per cent daily limit to 12.56 yuan in Shenzhen, capping a decline of 23 per cent over the past seven days. LONGi Green Energy, a manufacturer of silicon wafers, also plunged by the same amount to 20.12 yuan in Shanghai.

GCL-Poly, the world’s largest producer of solar wafers used to make solar panels, slumped by 9.2 per cent to HK$0.79.

After the announcement, Dennis Ip, head of Hong Kong and China utilities, renewables and environment at Daiwa Capital Markets, slashed his forecast for solar power installation in China to 30 gigawatts from 45GW this year. Installation rose to a record 53GW in 2017.

Frank Haugwitz, the founder of Asia Europe Clean Energy (Solar) Advisor, slashed his forecast for this year’s solar installation in mainland China to between 30 and 35GW, from 40 to 45GW. He also cut his annual volume projection for next year and 2020 to between 20 and 25GW.