[Latest] In-depth analysis of the development status of China's PV market

With the deepening of the concept of environmental protection and the fluctuation of fossil fuel prices, China has introduced a series of policies to support the development of the photovoltaic industry, providing a policy foundation for photovoltaic explosive growth. Under the strong support of the government, in 2015, China's photovoltaic industry was “revived in the downturn” and it rose against the market. In 2016, with the continuous expansion of the domestic and international PV market and the gradual improvement of the international trade environment, the development environment of China's PV industry continued to improve, and the fundamentals of the company continued to improve, but faced with problems such as weak corporate profits.

A market investment is growing strongly
With the limited availability of conventional energy sources and the increasing environmental problems, new energy sources with environmental protection and renewable characteristics are receiving more and more attention from all countries. However, in 2015, the global investment environment for new energy sources is facing unfavorable factors. First, the cost of photovoltaic power generation continues to decrease, and the amount of equipment that can be imported into the same capacity is reduced. Second, the US dollar exchange rate is high, and the investment outside the US dollar is relatively reduced after it is converted into US dollars. The third is the slowdown in the European economy, which had previously been booming. Fourth, the price of fossil fuels plummeted. Even so, global new energy market investment has increased, reaching $329 billion. Among them, due to the increased cost competitiveness of photovoltaic and wind power generation, even without adverse factors, investment has not stalled.
In 2015, the global PV market grew strongly. The new installed capacity in traditional markets such as Japan, the United States and Europe remained strong. The development of photovoltaic applications in emerging markets such as Southeast Asia and Latin America is in full swing. India, Thailand, Chile, Mexico and other countries The installed capacity has increased rapidly.
In 2015, China vigorously advocated the development of renewable energy, and continued to introduce policies to reduce the bottleneck of ventilation and photovoltaic development, and once again become the largest investor in the global clean energy industry, with new energy investment reaching 110.5 billion US dollars. Under the general environment of government support and technological progress, China's photovoltaic industry continues to pick up. Wang Bohua, secretary general of the China Photovoltaic Industry Association, said that in recent years, China's photovoltaic industry investment has increased enthusiasm, and many traditional enterprises have entered the field of photovoltaic investment. According to the statistics of the Ministry of Industry and Information Technology, from January to September 2015, China's PV-related industry investment was 80.79 billion yuan, a year-on-year increase of 35.8%.

B cumulative installed capacity is the largest
With the strengthening of policy support and the continuous start of the domestic market, China's photovoltaic industry has gradually stepped out of the trough, and accelerated in 2015. The newly installed PV capacity will reach 16.5GW, which will continue to rank first in the world. The cumulative installed capacity is expected to exceed 43GW, surpassing Germany to become The country with the largest installed capacity of photovoltaics in the world. In the first three quarters, the total output value of China's photovoltaic manufacturing industry exceeded 200 billion yuan, and the installed capacity of new photovoltaic power generation in the country was 9.9 million kilowatts, a year-on-year increase of 161%. Among them, the installed capacity of new photovoltaic power plants is 8.32 million kilowatts, and the newly added distributed photovoltaic installed capacity is 1.58 million kilowatts.
In 2015, China's polysilicon production was about 169,000 tons, a substantial increase of 25% year-on-year, about double the number in 2013. In the first quarter of 2015, the output was gradually increased. The output in the first quarter was 37,000 tons, the output in the second quarter was 41,000 tons, the output in the third quarter was 43,000 tons, and the output in the fourth quarter was 48,000 tons. In terms of total output and total capacity, the utilization rate of domestic polysilicon capacity reached 90.9% in 2015, and the capacity utilization rate in the fourth quarter exceeded 100%.
Zhao Jiasheng, vice president of China Nonferrous Metals Industry Association, said that by the end of 2015, China had more than 10,000 tons of polysilicon enterprises, namely Jiangsu Zhongneng (68,000 tons/year) and Xinjiang Special Transformer (22,000 tons/year). , Luoyang Zhongsi (15,000 tons / year), Sichuan Yongxiang (15,000 tons / year), big new energy (12,000 tons / year), Asian silicon (12,000 tons / year), the capacity of these six companies It is 144,000 tons, accounting for 75.8% of the total domestic production capacity, of which only Zhongneng has a total domestic production capacity of 42.6%.

C abandoned light problem
In 2015, China's solar photovoltaic power generation installed capacity of 15.28 million kilowatts, a record high, and added more than 10 million kilowatts of installed capacity for three consecutive years. Among them, centralized photovoltaics added 13.2 million kilowatts, distributed photovoltaics increased by 2.08 million kilowatts, and new photovoltaic installed capacity in Xinjiang, Hebei, Ningxia, Gansu, Jiangsu and Qinghai exceeded 1 million kilowatts.
In 2015, the cumulative power generation of solar photovoltaics in China was 38.3 billion kWh, a year-on-year increase of 64.4%. By the end of 2015, the cumulative grid-connected capacity of China's solar power generation reached 41.58 million kilowatts, a year-on-year increase of 67.3%, accounting for about one-fifth of the world's total, surpassing Germany to become the world's largest PV country.
Li Qionghui, director of the New Energy and Statistics Institute of the State Grid Energy Research Institute, introduced that in 2015, the State Grid has accepted a total of 23,360 PV-connected households, with a total acceptance capacity of 5.75 million kilowatts; the cumulative number of connected households is 20,312, and the cumulative network is connected. The capacity is 4.73 million kilowatts. Among them, the accumulated grid-connected capacity of East China's distributed photovoltaics is 302 kW, accounting for 64% of the total.
According to statistics, in 2015, the light-receiving rate in northwestern China reached 17.08%. Among them, the problem of light-abandonment in Gansu was outstanding. The cumulative amount of discarded light was 2.619 billion kWh, accounting for 56% of the total abandoned photoelectric output, and the light rejection rate reached 30.7%. Xinjiang has abandoned a total of 1.508 billion kWh of photovoltaics, accounting for about 32% of all discarded photovoltaics, and the light rejection rate reached 22.0%.

D trade has a low voice
Since 2005, driven by the development of the photovoltaic industry, China's polysilicon industry has been overcapacity, eliminated and merged, and the industry concentration has been continuously improved. According to statistics, in 2015, there were about 18 enterprises producing polysilicon in China, and the industry concentration was relatively high. Among them, the top ten products accounted for more than 90% of the total, and the top five accounted for more than 70%. Since solar crystal silicon manufacturing is located at the most upstream of the solar photovoltaic industry chain, the technical threshold of the link is high and has a certain monopoly. In the case of strong domestic demand for installation, the high-end production equipment required by China's PV manufacturers needs to be imported from abroad, and polycrystalline dependence is imported. The situation still exists. From January to October 2015, China's polysilicon imports were 96,400 tons, a significant increase year-on-year. Among them, South Korea, Germany and the United States accounted for 83% of the imported land. According to customs statistics, in the first three quarters of 2015, China imported 39,000 tons of polysilicon, an increase of 21.5% year-on-year; the value was 10.06 billion yuan, an increase of 2.4%; the average import price was 113.1 yuan per kilogram, down 15.7%. Among them, 45,000 tons of polysilicon was imported by general trade, an increase of 1.3 times, accounting for 50.4% of China's total polysilicon imports in the same period; 25,000 tons of imports by processing trade, a decrease of 41.5%, accounting for 27.9%; imported by special customs supervision 19,000 tons, an increase of 73.9%, accounting for 21.7%. Even if China's 16 polysilicon enterprises are in full production, the import volume will still exceed 100,000 tons.
Since more than 90% of the photovoltaic products produced in China are exported to foreign markets, the dependence on foreign countries is extremely great, resulting in the “double low” situation of low voice and low pricing power in China's photovoltaic trade. Any fluctuation in the international market will affect China's photovoltaic products. Export. According to Sun Guangbin, deputy secretary general of China Photovoltaic Industry Association, as of November 2015, China's PV products exports reached US$13.18 billion, and exports increased by 0.5% year-on-year. It is estimated that the annual export volume in 2015 will reach US$14.5 billion, and exports will increase by 0.6% year-on-year. %, the export volume increased by 5.6% year-on-year, and the export price decreased by 4.83%. From the analysis of the proportion of exports, the total exports from January to November 2015 were US$ 13.18 billion, of which Asia accounted for 58.9%, Europe accounted for 16%, North America accounted for 12.7%, Africa accounted for 3.1%, and Oceania accounted for 2.9. %.

E price is stable and there is a drop
In 2015, under the guidance of national policies, China's PV market rose against the market, and the industry continued to pick up. Compared with the price war in 2013~2014, PV prices have stabilized and declined. Among them, the average price of solar grade polysilicon was 124,000 yuan / ton, down 22.6% year-on-year. From the beginning of 2015 to the end of the year, the price fell more than 25%. At present, the price of polysilicon below 110,000 yuan / ton has fallen below the lowest point in the history of the "double opposition" at the end of 2010.
At the end of 2012, some PV companies in Europe strongly demanded to impose “double-reverse” tariffs on China's PV companies. Finally, the EU adopted the opinions of these PV companies and announced that they would impose punitive tariffs on China's PV products from 2013. Subsequently, after active negotiations between China and Europe, on August 6, 2014, the European Commission approved the China-EU PV trade dispute price commitment agreement, effective until the end of 2015.
On October 16, 2015, EUProSun, headed by Solar鄄World, asked the EU to consider excluding “China prices” from the Bloomberg index. If the EU finally agrees to exclude the "China price" request from the benchmark index, then the price of China's PV products will be redefined, and China's components will enter the EU market with the minimum import price limit, which has restored the photovoltaic products of China to some extent. price advantage.

F power generation cost drops
According to the “13th Five-Year Plan”, the scale of photovoltaic power generation in 2020 is 150 million kilowatts. The primary task is to promote the continuous reduction of costs through large-scale development, and realize the low-cost Internet access for photovoltaic power generation users as early as possible. The construction cost of photovoltaic power plants and the cost of power generation should be in 2015. The year-on-year decline is over 20%. In 2015, faced with the dual pressure of import dumping and weak demand and the falling prices, the production energy consumption of China's polysilicon production enterprises continued to decline, the overall cost has dropped to 90,000 yuan / ton, and the industry's average integrated power consumption has dropped. 100kWh/kg, industrialization process such as silane method fluidized bed method is accelerated. The technology of single crystal and polycrystalline cells continued to improve, and the industrialization efficiency reached 19.5% and 18.3%, respectively. The technical routes such as passivated emitter back contact (PERC), heterojunction (HIT), back electrode, and high-concentration light were accelerated. Photovoltaic module packaging and anti-photo-attenuation technology are continuously improved. The production cost of leading enterprise components is reduced to 2.8 yuan / watt, the investment cost of photovoltaic power generation system is reduced to 8 yuan / watt, and the cost of electricity is reduced to 0.6 ~ 0.9 yuan / kWh.
Wang Bohua, secretary-general of China Photovoltaic Industry Association, said that in 2015, China's PV module production exceeded 43GW, the average conversion efficiency of polycrystalline modules was 15.91%, monocrystalline modules were 16.53%, and the average utilization rate of enterprises was 86%. In terms of silicon wafer development, the average capacity utilization rate of 37 wafers was 94%, and the average capacity utilization rate of 26 companies was 7.6%. In terms of battery development, the industrialization efficiency of single crystal and polycrystalline cells reached 19.5% and 17.95%, respectively. The average capacity utilization rate of 50 companies was 85%, and the net profit margin of 13 pure cell companies was 5%.
The development of photovoltaic enterprises not only benefits from the support of the government, but also benefits from the decline in industry costs. Shi Lili, a researcher at the Energy Research Institute of the National Development and Reform Commission, said that the actual cost of photovoltaic power generation in China has dropped by more than 20% from 2013 to 2015, and the initial investment in photovoltaics has dropped significantly, from 10,000 yuan to 10 million yuan. Within the time. The cost of photovoltaic financing has dropped, that is, 6 interest rate cuts, affecting 0.05~0.07 yuan/kWh. It is reported that the manufacturing costs in Europe, the United States and Japan are more than 80 cents per watt, while the cost per watt in China is between 58 and 68 cents.

K PV needs policy support
The China Photovoltaic Industry Association recommends that the first is to strengthen publicity and exchange and innovate financial support means. Multi-channel publicity on the actual situation of the development of the photovoltaic industry, in order to deepen the understanding and understanding of the development stage of the photovoltaic industry and future development trends. Support financial institutions to ease the problem of excessive debt burden of enterprises through debt-to-equity swaps or non-performing asset securitization; encourage financial institutions to strengthen cooperation, establish closed financing funds, and provide order financing support for key enterprises; encourage financial institutions and overseas The listed companies cooperate to support enterprises to withdraw from the market to return to A shares; continue to promote the reduction of financing costs of photovoltaic enterprises, and implement differentiated low-cost financing policies through key business directories or order loans. The second is to set up investment funds to support technological innovation in enterprises. Guided by financial funds, it will attract social capital investment, encourage power generation groups, power grid companies, photovoltaic companies, financial institutions and social capital to participate in fund-funding, promote mergers and acquisitions, and standardize business operations. The fund invests in the construction and manufacturing of photovoltaic power plants in a certain proportion, and compensates the risks of the PV manufacturing industry through the stable income of the power station. The third is to guide the global layout and implement the subsidy policy. Properly resolve foreign trade barriers, solve the problem of PV subsidy fund issuance, improve PV subsidy policy, promote technological progress, and encourage the definition of high-efficiency component price range in the “Leader” program to ensure high-efficiency component market share and profit margin. The fourth is to strengthen overall coordination and ensure full collection of power generation. The energy management and power supervision departments of the State Council coordinate the provinces, districts and municipalities to supplement or amend the regional renewable energy development plan, incorporate national key projects into local development plans, and harmonize local planning with national planning; coordinate the national grid and China Southern Power Grid to improve grid development. Planning to coordinate power grid development planning with renewable energy development plans; recommending that state power regulators implement actual implementation of grid and acquisition of renewable energy power generation in accordance with the full guaranteed acquisition regulations for renewable energy power generation in the Renewable Energy Law Investigate and investigate the illegal act of failing to comply with the regulations to purchase renewable energy and cause economic losses of renewable energy power generation enterprises. The fifth is to clarify the nature of land use and regulate land tax policies. It is recommended to introduce a land use tax policy for photovoltaic power generation enterprises at the national level to regulate the land use tax standards of local photovoltaic power generation enterprises.

G enterprises turn losses into profits
In 2012, affected by the trade frictions between the two major markets of the United States and the European Union, the amount and volume of exports in the year dropped significantly. After 2013, due to the second "double-reverse" investigation by the United States and the EU price commitment restrictions, as well as the impact of market trade friction cases such as Australia, India and Canada, exports continued to be sluggish and companies suffered serious losses. In 2014, driven by the recovery of international markets such as the US and Europe and the rapid growth of Asian markets such as Japan, China's photovoltaic cell export volume rebounded, and most companies turned losses into profits.
Wang Bohua, secretary-general of the China Photovoltaic Industry Association, said that in 2015, from the operation of 33 PV module companies with standardized conditions, only four companies suffered losses, with an average profit of 4.7%, significantly higher than the 3% level of the electronics manufacturing industry. , 2~3 percentage points higher than the first half of 2015. Compared with 2014, the profit of these 33 component companies is about 3.6%, and the profitability in 2015 is over 30%. In the quarterly report released by 30 A-share solar power listed companies, 24 net profit growth, including Sunshine Energy, Tuo Energy, Weiwei, and Moso Power, more than 30% of the company's net profit increased by 100% year-on-year. Above, Dongfang Risheng has won the top prize with a growth rate of 499.36%.

H Implement the “going out” strategy
After the industry integration, in 2015, among the top nine leading solar module manufacturers in the world, Chinese companies occupy 7 seats, and the other two are American companies. Low-cost silicon materials, price wars, withdrawal of government funds, and stabilizing market demand continue to continue industry consolidation.
In fact, in the competition of China's PV module enterprises, the first-line component enterprises and second-line SMEs are more seriously divided. As of now, the profit of the top ten PV module companies in China has improved significantly, while the average capacity utilization rate of second-tier SMEs is below, and the profit level is in the balance line. nearby. Because PV power plant developers are suspicious of SMEs' continuous operation and product quality assurance level when purchasing components, they generally prefer products from first-line component companies. At the same time, a small number of small enterprises rely on third-party OEMs to survive in the first-line enterprises. With the expansion of the production capacity of first-line enterprises, these small enterprises will gradually be eliminated.
The merger and reorganization of the photovoltaic industry has accelerated, and market-oriented resource integration has continued to deepen. Many polysilicon enterprises in China have implemented the “going out” strategy and started to set up factories overseas. The global trend of production layout is obvious. According to statistics, in 2015, many PV companies in China announced plans to expand production, and will add 4.2GW of component capacity. Among them, Shunfeng International acquired the polysilicon enterprise Wannian Silicon Industry and the US battery component company Suniva to further optimize the industrial chain layout. Tongwei Group invested 850 million Taiwan dollars in Taiwan's Silicon Valley Energy to seek economies of scale. Xi'an Longji, Trina Solar and other companies cooperate with Yingli to maximize capacity utilization through entrusted processing.

I still have troubles in development
At present, the three major problems in China's photovoltaic industry are plaguing the development of the industry. The first is trade barriers. The "double-reverse" investigations in Europe and the United States against China have intensified. Among them, the successive “double-reverse” surveys of major exporting countries in the world have brought heavy losses to China's PV companies, which directly led to a decline in China's PV exports. Second, subsidies are in arrears. At present, the main reason for restricting the large-scale development of the photovoltaic industry is its high system cost. Photovoltaic power generation must rely on subsidies to ensure benefits. According to statistics from 15 PV power plant operators, China's PV subsidy arrears have exceeded 10 billion yuan. One of the reasons is that the renewable energy surcharge is insufficient, and the second is that the subsidy issuance process is too cumbersome. Take the fifth batch of the “Proclamation of the Supplementary Funds for Renewable Energy Prices”, for example, from the project organization to the actual inclusion, spanning nearly one year. The government's long-term arrears of power plant subsidies have seriously affected the government's credit, resulting in poor capital flow and increased financial costs for power generation companies. The industry chain has a triangular debt phenomenon among power generation companies, equipment companies and parts companies. The third is the land tax. The local taxation of photovoltaic land tax has caused the tax burden of power station development enterprises to be too heavy, and the revenue of power stations is difficult to guarantee. The land tax problem is becoming a new contradiction restricting the development of China's photovoltaic industry. At the same time, the land expropriation standards for photovoltaic power stations vary greatly, resulting in serious unfairness. The land use tax is 0.6~12 yuan/m2, and the land use tax for photovoltaic power plants in different regions is nearly 20 times different.

J China will remain the largest PV market
In June 2015, the Ministry of Industry and Information Technology and the National Energy Administration and the National Certification and Accreditation Administration jointly issued the "Opinions on Promoting the Application and Industrial Upgrade of Advanced Photovoltaic Technology Products", requiring polycrystalline modules to have an efficiency of not less than 15.5% and a single crystal of not less than 16%. And the components selected for the "Leader Plan", polycrystalline not less than 16.5%, single crystal not less than 17%. This plan is conducive to the technology upgrade of China's photovoltaic industry, eliminating outdated excess capacity. The competitive strategy of component manufacturers in the future can be divided into low-cost competition and high conversion efficiency. The advantage of low price comes from labor cost and land. Cost is equal to "soft" strength, and more important than low price is to improve the conversion efficiency of the technology "hard" strength.
With the development and changes of the international industry, especially in the fourth quarter of 2015, due to the spurt of domestic installed capacity, China's photovoltaic industry has experienced a leap-forward growth, forming a shock development curve, and the industry will maintain a deep adjustment trend. According to the latest PV feed-in tariff policy, the deadline for the reduction of approved PV capacity tariffs will be postponed from April 1, 2016 to June 30, that is, the PV projects approved before 2016 will be available on June 30, 2016. If you put it into production before the day, you can still enjoy the current electricity price.
Looking forward to 2016, although China's PV market faces problems such as local power cuts, subsidy arrears, and benchmarking tariffs, it is believed that the government will crack bottlenecks by increasing renewable energy addition and optimizing the scale of power station indicators, and product prices continue to decline. It will offset the impact of tariff cuts and power cuts. Under the guidance of the “Leader” program, China's PV industry upgrades and technological advancements will be further accelerated, and the market demand for high-efficiency components will undoubtedly become more urgent. High-efficiency monocrystalline silicon will become the protagonist of this market trend.
The photovoltaic industry is supported by national policy and continues to pick up in 2016. With the continuous expansion of the domestic and international PV market and the gradual improvement of the international trade environment, the development environment of China's PV industry continues to improve, and the fundamentals of the company continue to improve, but still face weak corporate profits. And so many questions.

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