Keywords such as “large capacity expansion”, “price war” and “industry reshuffle” have become the focus of recent market attention in the photovoltaic industry.
A number of industry insiders interviewed by the “Securities Daily” reporter said that with a large influx of funds to promote the expansion of production capacity, the photovoltaic industry has a situation of oversupply, is facing a new round of reshuffle “pain period”, some enterprises may be eliminated. Especially recently, the prices of silicon wafers and components have fallen to the cost line, and even there has been a “malicious price war” phenomenon, and the industry competition is more intense.
However, in the view of many industry insiders, the growth logic of the long-term development of the photovoltaic industry remains unchanged. It is inevitable that some backward technologies and production capacity will be accelerated through market competition, and it is also more conducive to the overall progress of the industry.
In the face of the current industry situation, the relevant person in charge of a leading photovoltaic industry enterprise told the Securities Daily reporter that in the industry competition reshuffle period, enterprises should invest in research and development, and use technology layout to cross the cycle. “Price competition without technology competition is an unsustainable behavior that undermines the development of the industry.”
Large-scale construction of photovoltaic power stations began
“Last year, the price of modules was too high, and many photovoltaic power plant projects did not start, but this year the price continues to fall, and the projects are moving.” Li Cheng, the relevant person in charge of a power station construction company, told the Securities Daily reporter that because all links of the photovoltaic industry chain are cutting prices this year, tthe overall construction period this year is very tight.
This is just a microcosm of photovoltaic installations this year. Data from the National Energy Administration’s press conference on October 30 show that in the first three quarters of 2023, the country’s new installed photovoltaic capacity of 128.94 million kilowatts, an increase of 145%.
However, in the context of the rapid growth of photovoltaic installed capacity, the price of photovoltaic products is falling. The silicon price released by the China Nonferrous Metals Industry Association on the evening of November 8 shows that the N-type silicon trading price range this week is 70,000 yuan/ton -78,000 yuan/ton, and the average transaction price is 73,900 yuan/ton, down 1.73% from the previous month. It is still down, but it has narrowed compared to the previous two weeks.
“There is clearly less customer demand.” The relevant person in charge of a silicon material company told the Securities Daily reporter that the entire downstream construction was insufficient, and the wait-and-see sentiment was more serious.
“From silicon wafers to modules, all links of the photovoltaic industry chain are already under construction.” A vertically integrated photovoltaic company told the Securities Daily reporter.
The insufficient construction of the photovoltaic industry chain has also made some auxiliary enterprises feel the “chill”. “There is a clear sense of customer demand coming down.” The relevant person in charge of a photovoltaic auxiliary material company told the Securities Daily reporter.
Industry competition intensifies
“At present, the photovoltaic industry in the industrial chain in the middle and lower reaches of the overall oversupply phenomenon, enterprises hope to rely on the ‘price war’ to occupy the market share of the idea will only intensify the vicious competition in the market.” Wanlian Securities investment adviser Qu Fang said in an interview with the “Securities Daily” reporter that the recent bidding component prices reported a record low of less than 1 yuan per watt is a microcosm.
In the face of the industry chain price problem of common concern, the relevant person in charge of the above-mentioned photovoltaic leading enterprises said that there has been an irrational price in the recent component link, which will make the whole industry chain difficult to make a profit and have a negative impact on the sustainable development of the industry.
Li Cheng said that in the past two years, the production capacity of all links of the photovoltaic industry chain is expanding on a large scale, and will be released in the next two years, but at the same time, the land problem of photovoltaic power plants has become prominent. At present, there are some centralized photovoltaic projects that have been approved by the company, but they have not been able to start as scheduled due to the failure to match the grid access conditions or the adjustment of land use policies. “This means that the rate of centralized PV installation is bound to slow down, and once the rate of installation slows down, the capacity problem may be more prominent.”
Technological cost reduction is the main theme
The relevant person in charge of Lixin Energy told the Securities Daily reporter: “The price of the components currently purchased by the company plus freight is about 1.2 yuan per watt. Low component prices are certainly a good thing for power plant operators, but low prices do not equal low quality.”
Overall, the rapid development trend of the photovoltaic industry remains unchanged, and cost reduction will always be the main theme. “The long-term growth logic of the development of the photovoltaic industry remains unchanged, but short-term adjustments are inevitable,” Qu Fang said.
“We think in two or three years, there could even be an extreme phenomenon where 60 to 70 percent of companies will be eliminated.” The relevant person in charge of the above-mentioned photovoltaic leading enterprises also said that at present, the photovoltaic industry is in the technology iteration period, like a new generation of battery technology, the domestic market is blooming, you catch me, which is beneficial to the development of the industry, which is also an important means to promote the technological progress of the industry. However, if caught in a malicious “price war”, some companies will be more willing to prioritize the funds for survival, rather than research and development, which is unfavorable to the development of the photovoltaic industry.
“For the highly competitive industry, technological breakthrough is the only path, but also the guarantee of corporate profits and market position, and technological breakthrough is also an important driving force for the healthy development of the industry.” Said Qu Fang.