Photovoltaic industry supply and demand imbalance need to be deeply integrated

"In 2012, photovoltaic products suffered a serious imbalance between supply and demand, product prices fell sharply, while foreign polysilicon enterprises dumped large quantities of low-priced polysilicon products to China, resulting in a loss of the entire industry. At present, 90% of domestic polysilicon enterprises have been discontinued. The liabilities of the ten listed photovoltaic companies in the US are as high as 111 billion yuan and the average debt ratio is close to 70%, said Wang Bohua, secretary general of the China Photovoltaic Industry Alliance.

Meng Xianyi, vice chairman of the China Renewable Energy Society, said that “in 2013, the photovoltaic industry will enter a period of deep industrial adjustment.”

Policies to be tested at the end of the year December 19, 2012 are undoubtedly good news for the Chinese PV industry. On the one hand, the State Council emphasizes encouraging merger and reorganization of enterprises under the market forcing mechanism and eliminating backward production capacity. On the other hand, it strictly controls the new polysilicon, photovoltaic cell, and component projects that simply increase production capacity.

“These measures will inevitably accelerate the reshuffle of the industry to a certain extent. In 2013, the photovoltaic industry will enter a deep industrial adjustment period and phase out a batch of photovoltaic companies with inefficient, high-cost production capabilities. The overall production capacity level may be Cut.” said Meng Xianji, deputy director of the China Renewable Energy Society.

In fact, this year's support policy for the adjustment of the photovoltaic industry does not stop there. “The “12th Five-Year Plan for the Development of Solar Power Generation” will increase the installed target of solar power generation to over 21GW in 2015. According to the “Notification on the Application of Distributed Photovoltaic Generation Scale Application Demonstration Area,” the total planned distributed photovoltaic installation capacity is 15GW. State Grid [Weibo] has also published the "Working Opinions on Distribution Grid-connected Photovoltaic Power Generation Services", proposing that a voltage level of less than 10 kilovolts will be connected to the grid, and it only requires application, no cost, and full purchase of electricity generation. Gradually clear the barriers to grid integration.” Wang Bohua, the secretary general of the China Photovoltaic Industry Alliance, believes that “these policies have all contributed to the growth of China's photovoltaic market, but we still need to improve the implementation rules of the policy and the effectiveness of the policy is yet to be tested.”

The pressure of capacity imbalance is still "overcapacity, export obstruction, and the industry's overall loss. It can be said that 2012 is the darkest year for the photovoltaic industry. After nearly two years of hardship, 2013 may become a turning point in the photovoltaic industry." ChinaVenture vote China Group analyst Li Ling said. Li Ling believes that “the entire photovoltaic industry will usher in full integration, achieve survival of the fittest, low production capacity and efficiency, low management level, outdated business concepts will be eliminated or merged. It is expected that the situation of large losses in the entire industry in 2013 is expected to improve The photovoltaic industry will gradually return to the right track."

“Although efforts are made to control production capacity at the policy level and vigorously develop the domestic market, the imbalance of capacity in the short term will not be solved immediately. Adjustment of the production capacity imbalance will also need to go through this process in 2013.” Wei Qidong, former secretary general of Jiangsu Photovoltaic Industry Association Indicated.

“The components will still be subjected to the pressure of phase imbalance. Under the influence of “double reverse”, the demand for components in China is expected to be 10 GW in foreign countries, and the domestic related promotion policies will bring domestic demand to 10 GW, bringing about a total of about 20 GW of actual demand. China's PV module production capacity integration has not been effective, and it will continue to bear the pressure of production phase imbalance in 2013.” Wang Bohua, secretary general of China Photovoltaic Industry Alliance, said.

Wang Bohua believes that China's photovoltaic industry faces at least two challenges: First, the lack of technology and innovation, the follow-up development is facing challenges. In the early stage of development, China's photovoltaic industry mainly reduces the cost and earns processing and manufacturing costs through stacking wood-based expansion of industrial scale. However, there are still major gaps in key technologies. Some key equipment and electronic materials such as fully automatic screen printing machines and silver paste materials And so still rely on imports. The development of basic theory and core technology lags behind, and there is a shortage of new product and new technology storage for new laminated batteries. Follow-up development is not optimistic.

The other is that the international trade environment is deteriorating and the industry is in danger of hollowing out. The United States and the European Union have successively launched the “Double Counter” survey on photovoltaic products in China, which involves nearly 80% of China’s solar cell products.

On the one hand, trade barriers have aggravated the plight of China's photovoltaic industry. For example, if it is not possible to compensate for the loss of European and American markets through the development of other markets for a short period of time, China's photovoltaic companies will face a large number of extinctions. On the other hand, the deterioration of the international trade situation will force China's photovoltaic industry to accelerate the transfer, to avoid the risks of international trade and get closer to the terminal market, and eventually lead to the hollowing out of local industries.

In addition, Wang Bohua believes that "since the exit mechanism of enterprises is still not perfect, and the blind assistance of local governments, the pace of elimination of outdated production capacity of domestic photovoltaic companies has been slow. In addition, it is subject to production line support, layout, cost and energy consumption control issues. Affected, large polysilicon companies are unwilling to merge with smaller plants; component companies also have difficulties integrating due to brand, quality assurance, and after-sales reasons. The imbalance between industry supply and demand is difficult to alleviate in a short period of time."

The integration and reorganization is the theme “The downturn in the photovoltaic industry has affected the investment enthusiasm of PE institutions. This year, the investment of PE institutions in the photovoltaic industry has been greatly reduced. On the other hand, the IPO of many photovoltaic companies has made the IPO prospects of photovoltaic companies very uncertain. The obstruction of exit channels has also affected the PE institutions' investment in the photovoltaic industry to a certain extent, said Li Ling, an analyst at ChinaVenture Investment Group.

“With the dual effects of favorable policies and market adjustment this year, the photovoltaic industry will have a clear improvement in 2013. Large companies with a state-owned background will have an opportunity for improvement in 2013, but private small-scale photovoltaic companies will face pressure to restructure their mergers and acquisitions. Bigger, "said Wei Qidong, former secretary general of the Photovoltaic Industry Association of Jiangsu Province.

“The global PV market has shifted its focus. Affected by the European debt crisis, traditional large installed countries have generally lowered the subsidy rate, and the market has gradually shifted its focus to emerging PV countries. China, the United States and Japan are rapidly accelerating their growth. The market will reach around 10 GW, and its position in the global photovoltaic market will further increase,” said Wang Bohua, secretary general of the China Photovoltaic Industry Alliance.