In the context of severe product homogenization, differentiated products with notable cost-effectiveness advantages are almost the only way to break the cycle of internal competition. By 2024, HJT and xBC processes have made rapid progress towards industrialization, and are expected to lead the next cycle of battery technology iteration.
Zhongtong Finance and Economics APP learned that Sinolink Securities believes that cost-effectiveness neutrality is the core of whether a product can successfully iterate in the photovoltaic industry. From BSF to PERC, technological progress is not limited by business cycles, and the dual cost-effectiveness advantages accelerate PERC iteration. From TOPCon iteration to PERC, the long-term high premium level attracts the industry's expansion scale to increase rapidly. At present, disruptive innovation is the only way to break the internal competition in the homogeneous and integrated components and batteries segments. In the context of severe product homogenization, differentiated products with notable cost-effectiveness advantages are almost the only way to break the cycle of internal competition. By 2024, HJT and xBC processes have made rapid progress towards industrialization, and are expected to lead the next cycle of battery technology iteration.
Please use your Futubull account to access the feature.
In each link of the industrial chain, the battery link is often the core link for photovoltaic technology iteration due to its fast technological progress and diversified routes. From the perspective of battery and component manufacturers, since the battery technology iteration is fast, the construction and planning of production capacity are often in a state of surplus far beyond market demand, which requires high-intensity R&D investment to maintain product cost-effectiveness advantage before making profit. From the perspective of the terminal, the gain of component-end power brought by the improvement of battery efficiency is the most intuitive and easiest way to determine cost-effectiveness, so the photovoltaic battery link is a relatively typical cost-effectiveness-driven technology iteration link.
Reviewing the iteration from BSF to PERC, technological progress is not limited by business cycles, and the dual cost-effectiveness advantages accelerate PERC iteration: According to CPIA statistics, the newly added domestic photovoltaic installed capacity in 2018 and 2019 decreased by 17% and 32% respectively, However, PERC's market share increased from 15% in 2017 to 33.5% in 2018, and exceeded 65% in 2019. Considering the decision-making cycle of production expansion, the expansion of PERC battery capacity has not been excessively impacted by the 531 policy. The core reason is that since 2017, under the joint action of the rapid maturation of the RCZ and diamond wire cutting process in the monocrystalline silicon wafer link, the cost of monocrystalline silicon wafers has dropped rapidly compared to polycrystalline silicon wafers, and monocrystalline silicon wafers have significant cost-effectiveness advantage over polycrystalline silicon wafers. At the same time, in the process of upgrading from BSF to PERC, the efficiency improvement of monocrystalline PERC is significantly greater than that of monocrystalline BSF, which accelerates the replacement of PERC by BSF.
Reviewing the iteration from TOPCon to PERC, the long-term high premium level attracts the expansion of the industry's scale: At the end of 2021, Jinko Solar took the lead in large-scale expansion of N-type TOPCon capacity in the industry, marking the beginning of the industry's shift to TOPCon battery technology. As TOPCon expands production, resources in all links of the industrial chain are tilted towards TOPCon, and the scale effect will basically level the manufacturing cost of TOPCon and PERC at the component end. However, TOPCon still enjoys reasonable premiums downstream compared to PERC, so it has better profit-making ability than PERC, leading to rapid expansion of TOPCon. According to CPIA statistics, the market share of TOPCon will increase from less than 3% in 2021 to over 23% in 2023, and it is expected to exceed 60% in 2024.
During the period of full-scale overcapacity, disruptive innovation is the only way to break the internal competition of homogeneous integrated components and batteries. According to the statistics of Sinolink Securities, the main industry chain at the moment is in a state of comprehensive overcapacity, and many links are in a state of cash deficit, even TOPCon battery chips are in a state of negative gross margin. Until 2024H1, the total planned capacity of TOPCon batteries exceeds 1,100 GW, and cumulative landing exceeds 650 GW. In the context of severe product homogenization, differentiated products with notable cost-effectiveness advantages are almost the only way to break the cycle of internal competition. By 2024, HJT and xBC processes have made rapid progress towards industrialization, and are expected to lead the next cycle of battery technology iteration.
Risk warning
New technology penetration is less than expected, R&D progress is less than expected, industry chain price downside risk, and enterprise profit turnaround is less than expected.