As an important appetizer of SNEC exhibition, the "SNECPV+ 17th (2024) International Solar PV and Smart Energy (Shanghai) Conference" was held in Shanghai from June 11th to 14th, with nearly 20 heads of photovoltaic head enterprises conducting multiple thematic speeches and roundtable dialogues. The intensification of industry internal friction is the key issue. Several entrepreneurs mentioned that encouraging technological innovation, but also upstream and downstream industry coordination development.

Another highlight of the conference was Dong Mingzhu, Chairman and President of Gree Electric Appliances (000651.SH), who appeared at SNEC for the first time and delivered a speech. As a household appliance industry leader in the photovoltaic industry，Dong frequently brought up Gree’s “light storage space” (photovoltaic + energy storage + air conditioning) products, and also expressed her feelings about the manufacturing industry: “The market does not believe in tears”. Collaborative development is inevitable, but competition is also needed. Through competition, continuous technological upgrading can maintain the market better.

In the industry ice age, everyone needs to "live and stay here." In the current situation of serious supply-demand mismatch, where is the direction of the second half of the photovoltaic industry?

Why has photovoltaics appeared super internal friction?

Currently, the photovoltaic industry is facing multiple challenges. Shi Yubo, Chairman of China Energy Association and former Director of the National Energy Administration, said in his speech that photovoltaics are facing technological challenges. Although photovoltaic technology has made significant progress, material science, manufacturing processes, system integration and other aspects need to be continuously innovated to further improve efficiency and reduce costs.

He also said that there are differences in policy support, market demand and competitive environment in different countries, and it is necessary to strengthen cooperation globally to jointly cope with them. At the same time, the photovoltaic industry also needs to pay attention to resource consumption, environmental protection and other issues in the process of rapid development to ensure sustainable development.

"Industry change has two different days, and the industry encounters the strongest internal friction in history, and the supply and demand are seriously mismatched." Zhu Gongshan, Chairman of Xinjin Group, said that currently the four major links of silicon material, silicon wafers, batteries, and components have basically fallen below the cash cost, and the entire industry chain is under pressure. In this round of turbulence in the photovoltaic industry, the overall production capacity has increased by about three times, but the profit margin has dropped by about 70%. European and American trade barriers have led to a contraction in external demand and export decline, and the global photovoltaic supply and demand imbalance has intensified.

Unordered expansion is an important reason for the industry's internal friction. Li Gang, Chairman of SerraFlower, said at the round table dialogue that the entry of cross-border companies has caused a phase of severe overcapacity, and all of China's existing capacity can complete the installation volume of the past 20 years in nine months.

Heavy pressure is a common feeling among many entrepreneurs. Homogenized competition, repetitive construction, cross-border squeezing, and only low-price bidding all bring traps to the industry.

Gao Jifan, Chairman of Trina Solar Co., Ltd. (688599.SH), believes that finding the root cause is the key to breaking the internal friction. He believes that the main root cause of the current situation is that companies fight separately and blindly invest. Local governments are excessively seeking investment, financial institutions are investing in disorder and capital markets are too profit-oriented.

Zhu Gongshan believes that the intensification of internal friction is related to the misjudgment of the entire industry's supply and demand relationship, and that the inherent technology of the industry seems to have touched the ceiling, causing the entry threshold to be insufficient. "The technological limit determines the industrial limit, and the premium of the existing technology and the marginal decline of power generation gains in the industry cannot resist the imbalance of the supply chain, which is the key to the industry's internal friction."

"The future is bright, and the reality is a bit tough." Yang Liyou, general manager of Jinneng Technology, said when summarizing the development of the industry, "Market, export, land, and absorption constraints are all working, and the market will not develop rapidly in a short period of time. How do we face the problem of overcapacity? This is a new challenge that the industry is facing."

It is worth noting that many entrepreneurs also talked about the impact of low-price bidding. Li Gang believes that in order to ensure the opening rate, to fulfill the commitments of investors, companies grab orders with no bottom line at a low price, and only lower, not the lowest. In his opinion, low-price bidding is an important factor leading to the increasingly serious internal friction in the industry.

Low-price bidding has indeed become a "headache" for many photovoltaic companies. Zhao Zhenyuan, Chairman of Shiyi Technology, said that bidding should not be awarded at the lowest price, which is extremely detrimental to the development of the industry. If the chaos is not rectified, the damage to the industry will be more serious.

Breaking through the supply side and the demand side

Although the industry is currently in an "Ice Age", Zhang Huixue, chairman of China Energy Saving Solar Energy Co., Ltd., believes that this cannot change the fact that photovoltaics represent the future of energy. With technological progress, cost reduction, and economic advantages, photovoltaics have gone from subsidies to parity and will certainly have a very good future with the mutual supplementation and combination with other energy sources, and the further enhancement of grid intelligence.

The optimistic expectation is that the photovoltaic industry will continue to reshape a new pattern in the midst of change. Zhu Gongshan summarized that in terms of materials and manufacturing, large bases will replace small ones, low energy consumption will replace high energy consumption, and high-end intelligent manufacturing "smart-change-number conversion-web link" will replace conventional manufacturing, and the technology route that used to be diverse will change to the N-type technology.

But the immediate priority is how to change the current predicament. Zhong Baoshen, chairman of Longi Green Energy (601012.SH), stated in the communication that promoting high-quality development of the photovoltaic industry requires dealing with the supply side and demand side respectively.

On the supply side, Zhong Baoshen suggested that photovoltaic practitioners should adhere to innovation-driven development. The industry should increase the protection of intellectual property rights and promote the standardization of various products to adapt to different scenarios. For example, the standard for distributed photovoltaics used in the construction industry is not yet systematic, and the development of relevant standards lags behind the industry, thereby increasing industry entry barriers. On the demand side, the demand for photovoltaics in the future will be huge, and it is necessary to increase consumption capacity and develop "source-grid-load-storage".

Several participating entrepreneurs also believe that in addition to supply-side adjustments caused by short-term rapid capacity expansion, further increasing consumption capacity and demand is the only way for the industry to further open up incremental ceilings. In addition to the "invisible hand" of the market, government regulation is also crucial.

Zhao Zhenyuan suggested that macroeconomic regulation should be strengthened, and major new energy projects should be filed by the National Development and Reform Commission. New capacity must be registered, and those that have not been approved cannot be put into operation.

Yang Liyou also called for accelerating the construction of a new type of power system, including a stronger and more intelligent power system. At the national level, some mischaracterized land should be released to promote healthier and more redundant development of new energy projects. Incentive policies should be introduced to encourage the merger and reorganization of the industry, which may help the industry emerge from the cold winter.

Gao Jifan suggested that a new development concept should be established, and governments at all levels should improve the quality of investment promotion. The industry, academia, and research should work together to innovate, upstream and downstream should develop together, and a new ecology of collaborative development in the industry should be built. He advocated that industry leaders and industry chain enterprises should develop together and promote collaborative innovation and cooperation in the global photovoltaic industry.