Chinese solar panel maker JA Solar Holdings Co Ltd will slow spending and cut output as the industry grapples with falling solar prices and subsidy cuts, the company’s chief executive said on Tuesday.
The solar industry has suffered through a dismal 2011 as a glut of inventory sent prices of solar panels sharply lower, squeezing profit margins.
Britain for instance on Monday disclosed plans to halve subsidies for small-scale rooftop generation of solar power, joining Germany and Italy in rolling back support to the sector.
“We’re lowering spending and capacity in accordance with market environment,” JA Solar’s Peng Fang told Reuters on the sidelines of an industry conference.
Fang said the company is taking a prudent approach in managing its finances, keeping its cashflow healthy and debts low amid an uncertain market environment.
JA Solar, the world’s largest maker of solar cells, reported last month a quarterly loss due to plunging prices on solar equipment and lowered its full-year sales forecast.
Subsidy cuts in Germany and Italy, the world’s top markets for the photovoltaic solar modules, and massive capacity expansion have sent prices of solar products down more than 40 percent this year.
For now, however, the industry is benefiting from a mild rise in demand from these markets, as consumers try to install systems before subsidy cuts take effect, said Fang.
He noted however that demand for the rest of the quarter remained uncertain. “We see (demand in) October is coming up, to some degree helping sales, but we still have November and December,” said Fang.
He forecast demand would remain weak in the first quarter due to seasonal factors.
JA Solar is however pinning its hopes on growth markets including China helping boost sales. “We hope there will be demand out of China. China for sure is growing fast,” said Fang.
