In the first half of the year, domestic photovoltaic installed capacity increased by 30%, but the overabundance of low-priced goods caused pressure on manufacturing companies. It is advisable to adjust the industry quickly and heavily. Experts suggest encouraging the clearance of outdated production capacity and promoting enterprise mergers and acquisitions. In terms of product structure, the operating income of 10-30 billion yuan products is 401/1288/60 million yuan, respectively.
On July 25, Caijing News (Reporter Liu Mengran) released the mid-term report card of the photovoltaic industry. In the face of severe supply and demand imbalance, the industry suggested that it is advisable to adjust the industry quickly and heavily. It is urgent to promote the clearance of backward production capacity and encourage enterprise mergers and acquisitions. In today's photovoltaic industry development review in the first half of 2024 and prospect seminar in the second half of the year, Li Ting, Director of the Electronic and Information Department of the Ministry of Industry and Information Technology, said that the Electronic Department will carry out work around standardized industry development, accelerated industrial innovation, and promotion of industrial integration.
At present, the photovoltaic industry is experiencing a situation of "two extremes": in the first half of the year, the domestic photovoltaic installed capacity increased by 102.48 GW, a year-on-year increase of 30.68%, and the scale expanded in both the solar manufacturing and application segments, and the export volume continued to grow; However, prices have dropped, output value has decreased, and export volume has decreased, and other problems are still severe. Incomplete statistics show that more than 20 newly built projects have been announced to be terminated, suspended or delayed in the same period.
Wang Bohua, Honorary Chairman of the China Photovoltaic Industry Association, mentioned in his speech that the photovoltaic industry has accumulated multiple risks under the current situation, and new and old players are facing challenges: when the industry is in a downturn, integrated enterprises have many points of "hemorrhage," old production capacity (PERC) is seriously depreciated, upgrading and transformation is difficult, which is the "burden" of old players; The main problem faced by new players is the lack of continuous technological innovation ability.
In the first half of the year, the trend of "increased quantities and reduced prices" continued.
According to data released by the China Photovoltaic Industry Association, in the application segment, newly installed capacity continues to grow, but the growth rate has slowed down. According to the national energy administration's statistics on China's electric power industry from January to June, domestic photovoltaic added capacity reached 102.48 GW, a year-on-year increase of 30.68%.
However, looking at the monthly figures, there was a year-on-year decline in March and April this year, with a decrease of 4.27 GW and 0.28 GW respectively. Wang Bohua believes that this is mainly due to the off-season for installations and the high base of last year.
In the manufacturing segment, the production of polysilicon, silicon wafers, cells, and modules increased by more than 32% year-on-year in the first half of the year. Among them, polysilicon production is about 1.06 million tons, a year-on-year increase of about 60.6%; silicon wafer production is about 402 GW, a year-on-year increase of about 58.9%; cell production is about 310 GW, a year-on-year increase of about 37.8%; module production is about 271 GW, a year-on-year increase of about 32.2%.
In addition to achieving a "production and sales prosperous" development trend, there has also been significant progress in technology. LECO/LIF is gradually replacing laser SE and becoming the standard for TOPCon production capacity. Efficiency-enhancing technologies such as less silverization and non-silverization, SMBB/0BB are being further promoted, and many companies are launching BC products. Calcium titanium and stacked calcium titanium laboratory efficiency have also been improved.
The industry is "hot," but most of the manufacturing companies are in a state of loss. According to recent forecasts of interim results, many links in the industrial chain are generally losing money, putting great pressure on business production and operation.
This is mainly due to the sharp decline in product prices.
According to Wang Bohua, in the first half of the year, the prices of polysilicon and silicon wafers fell by more than 40%, and the prices of cell and module fell by more than 15%. In terms of output value, the domestic photovoltaic manufacturing (excluding inverters) had an output value of approximately 538.6 billion yuan in the first half of 2024, a year-on-year decrease of 36.5%. In terms of exports, China's total export of photovoltaic products (silicon wafers, solar cell, and modules) was about US $18.67 billion, a year-on-year decrease of 35.4%.
In this round of industry turbulence, the industry is facing many challenges in its development.
In most of the main industrial chain companies that have disclosed their semi-annual report forecasts, most of them are in a state of net loss. Compared with the first quarter, most of the main industrial chain companies expect the loss to intensify in the second quarter. Under the pressure of extremely low prices in the industrial chain, the old "players" face the dilemma of difficult transformation.
It is advisable to adjust the industry quickly and heavily. Wang Bohua said that from a realistic perspective, competition inside and outside the industry is fierce, and the industry needs to "go into battle lightly." The time for integration should not be too long; from a historical perspective, the time and depth of industry adjustment are inversely proportional.
Industry insiders suggest that the clearance of photovoltaic production capacity should be handed over to the market.
During the meeting, how to achieve the clearance of production capacity faster was a hot topic among participating entrepreneurs. Although the number of new capacity additions in the first half of the year has decreased significantly, many risks are still impacting the industry. However, the phenomenon of "losing money in production" cannot become the norm, and the industry must pay close attention to product quality under the current price pressure. From the perspective of enterprises, the expected return on investment in the industry is likely to be less than expected, so companies need to strengthen cash flow reserves.
Nan Cunhui, Chairman of CHINT Group, also said in his speech that the prices of silicon materials, silicon wafers, cells, and modules have fallen below cash costs, and the international market is experiencing a situation of "increased quantities and reduced prices." The export amount of major photovoltaic materials in China has declined, and the total export volume in the first half of the year is less than 20 billion US dollars, a decrease of more than 30% compared with the same period last year. The entire photovoltaic industry chain is facing severe challenges, and the industry has entered a deep shuffle phase.
In terms of new capacity, the growth rate has significantly slowed down in the first half of this year.
According to incomplete statistics from the photovoltaic industry association, the number of projects put into operation, started and planned in the first half of 2024 decreased by more than 75% compared with the same period last year, and more than 20 projects were announced to be terminated, suspended or postponed. At the same time, the industry's starting rate is low, and some enterprises are in a state of shutdown. The starting rates of polysilicon segment, silicon wafer, solar cells and component segments are at 60%, 50% to 60%, respectively.
Therefore, the market is more concerned about the issue of the survival of existing capacity. Some corporate insiders believe that the clearing of photovoltaic capacity should be left to the market. Wang Bohua proposed suggestions in the report to promote the clearing of backward capacity, encourage enterprise mergers and acquisitions, specific measures include strengthening the guidance of management departments on the construction of advanced capacity, local governments strictly controlling unreasonable rescue actions, enterprises cautiously launching new investments, and encouraging targeted acquisition of new capacity left by cross-border enterprises exiting the industry; financial institutions should avoid providing financial support to the to-be-cleared capacity.