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China's solar market is expected to heat up this year, but the question is when

China's solar market, the world's largest, is expected to enter a construction boom in the second half of 2019, Daqo New Energy Corp. CEO Longgen Zhang said May 21, which could affect equipment prices globally.

Solar project development has been sluggish in China as developers wait for Beijing to release new policies following the government's efforts in 2018 to limit construction. The move drove down solar panel prices, which spurred demand elsewhere.

A slow Chinese market could decelerate further in the second quarter, but installations "should significantly pick up as China's solar ... policy is gradually rolled out this year," Zhang, whose company produces the raw material polysilicon, said on an earnings conference call.

"Since May, the market conditions for polysilicon have shown signs of improvement as prices appear to have bottomed out," Zhang added.

Consensus estimates are for between 35,000 MW and 40,000 MW of solar installations in China this year, according to Zhang. The country installed only about 5,200 MW in the first quarter, and the second-quarter total could be even lower, he said.

"[Which] means solar project volumes during the second half of this year could potentially double or even triple," Zhang said.

China installed 44,000 MW of new solar capacity in 2018, down 17% from 53,000 MW in 2017, according to the International Energy Agency.

Philip Shen, a senior research analyst at ROTH Capital Partners, said the timing of any recovery will largely depend on when China's National Energy Administration announces and awards subsidies. Zhang said he expects more policy details by mid-June at the latest.

China is also setting quotas for renewable power consumption, which should benefit clean-energy companies by increasing demand and reducing curtailments of wind and solar farms on the electric grid, Moody's said.

China-headquartered Daqo reported first-quarter net income attributable to shareholders of $6.6 million, or 50 cents per American depositary share, compared to $31.6 million, or $2.91 per share, a year earlier. Revenues fell by 15% year over year to $81.2 million from $95.6 million.