At the "3rd China Photovoltaic + Innovation and Development Forum" held recently, Yi Yuechun, vice president of the Hydropower & Water Conservancy Planning and Design Institute, said that after the rapid development of the photovoltaic industry in the past few years, the macroscopic goals of the current industrial development have been met. Adjustments, development priorities should shift from improving the scale to improving quality and promoting technological progress.
In this regard, relevant industry experts said in an interview with reporters that China's newly installed capacity for photovoltaics has been ranked first in the world for five consecutive years. Under the buoyant market demand, many photovoltaic companies have expanded production, coupled with factors such as price cuts. Affected, China's photovoltaic product prices have been declining year by year. It can be said that the photovoltaic industry has ushered in the era of cheaper profits. It is a general trend that development priorities have shifted to improving quality and efficiency and promoting technological progress.
The lowest price of polysilicon in the first quarter fell to 115 yuan/kg
In recent years, China's photovoltaic industry has been moving at full speed. In 2017, the photovoltaic industry has achieved unprecedented development. According to data released by the National Energy Administration, the installed capacity of China's PV increased by 53.06 million kilowatts last year, exceeding the total installed capacity of PV in Germany for 20 years. Among them, distributed PV increased 19.44 million kilowatts, an increase of 3.7 times year-on-year.
Driven by a series of favorable policies, domestic photovoltaic companies have increased the construction of distributed photovoltaic projects since last year. This trend continues into the first quarter of this year. The data released by the National Energy Administration shows that from January to March, China's photovoltaic installed capacity was 9.65 million kilowatts, an increase of 22% year-on-year. Among them, distributed photovoltaic power was 7.685 million kilowatts, a year-on-year increase of 217%.
According to report, since the beginning of this year, due to the direct effect of the scale effect, the price of photovoltaic products in China has been low.
The data shows that as of the end of March, the lowest price of polysilicon has dropped to 115 yuan/kg. Polycrystalline silicon wafers have dropped to 3.6~3.7 yuan/piece, single crystal silicon wafers have dropped to 4.3~4.5 yuan/piece, and module prices are around 2.5~2.6 yuan/watt.
In addition, it should be pointed out that the decline in PV product prices in the first quarter was also affected by some market factors. For example, in January-February, polysilicon production enterprises were all fully productive or even over-production operations, but most of the component output was driven by overseas orders, and the statistics of the domestic orders of the four leading component companies accounted for only 20% of the total shipments. Most SMEs have low capacity utilization due to poor domestic market, and industry average capacity utilization rate is about 65%.
According to the estimation of the relevant agencies, the overall price of photovoltaic products will remain relatively stable in the first half of the year. However, due to the slowdown in market demand and the release of new production capacity in the second half of the year, the prices of the products will further decline. In the fourth quarter, the price of polysilicon products will fall below 110 yuan/kg, and module prices will likely drop to about 2~2.1 yuan/watt.
Photovoltaic companies are gradually reducing their profitability
Industry experts told reporters that the profitability of domestic PV module companies was relatively poor last year, and that good companies also had a net profit margin of only about 1%. Under the multiple factors such as the expansion of photovoltaic taps, subsidies for retreats, and the reduction of on-grid electricity prices, the operating pressure of PV companies this year is even greater than last year.
Photovoltaic industry enters the era of "technology is king"
A photovoltaic module company official admitted to reporters that since last year, due to the overall demand for the photovoltaic market, manufacturers in the industry have expanded production, competition is fiercer, and the market price of photovoltaic module products continues to decline, from the beginning of 2017 3 yuan / watt With the decline of about 2.5 yuan per watt, the operating pressure of component companies is increasing.
Affected by the drop in module shipments and prices, Hairun Solar's operating revenue fell sharply in the first quarter of 2018. According to the financial report, Hairun Solar achieved revenue of RMB 292 million, a decrease of 61.5% year-on-year.
The reporter found that by sorting out the quarterly earnings of 51 A-listed PV companies, if the net profit after deducting non-recurring gains and losses was used as a reference, only 38 profit makers were achieved, and there were 13 companies with a net loss in the first quarter.
From the perspective of the profit generated by photovoltaic business for listed companies, Longji shares continued to maintain its position as the "net profit king" of A-share PV in the first quarter. Its net profit for the first quarter was 543 million yuan, an increase of 24% year-on-year. However, the reporter found through comparison that Longji’s net profit growth in the first quarter of this year was declining compared with the growth rate of the same period last year. This is related to the fact that the company has cut wafer prices several times this year in exchange for market share, which has caused the decline in the gross profit margin of the wafer business.
The reporter also learned from the analysis of the first quarter photovoltaic company financial report also learned that from January to March, from the overall increase in net profit point of view, the difference between the increase in net profit between companies is greater, but the relative increase in the relative proportion of leading companies in the industry chain stable. However, some enterprises with weak technological innovation have suffered substantial losses. For example, the largest drop in net profit in the first quarter was Maoshuo Power, which was a 374.01% year-on-year decrease.
Industry experts told reporters that with the continuous decline in the prices of photovoltaic modules, silicon wafers and other products, in the future some companies can only maintain financial balance. With the current increase in the prices of raw materials such as glass and aluminum frames and the continuous decline in terminal prices, the profitability of photovoltaic companies will be smaller and smaller.
Advanced technology is the "magic weapon" for photovoltaic companies to win in the era of Boli
With the gradual decline in the profitability of components and wafers, leading PV companies represented by Longji, GCL Integration and Tongwei are now increasing their investment in the R&D and construction of high-efficiency photovoltaic modules and battery business. We hope to rely on technological progress to reduce costs and increase efficiency and win market competition.
Take Longji shares as an example. According to report, as of the end of last year, Longji’s R&D investment totaled 2.38 billion yuan in the past five years, making it the largest PV manufacturing company in the world. Today, Longji’s achievements in the field of technology have made the industry frightened.
Recently, Longji Leye officially announced that its 60-type single-crystal PERC half-chip module has exceeded 360 watts in power consumption, breaking the world record, as tested by an authoritative testing organization T?HV-S?HD. One stone provoked thousands of layers of waves, which is already the second time that Longji Leye broke the world record in PERC module technology in 2018. The conversion efficiency of its single crystal PERC battery has been tested and certified by China National Center for Photovoltaic Product Quality Supervision and Inspection (CPVT). The maximum has reached 23.6%, once again becoming a new world record holder.
The reporter also noted that GCL’s integration last year was able to turn losses into profits, which was closely related to the company's generous investment in R&D last year. For example, in order to enhance the competitiveness of the enterprise market, since the beginning of last year, GCL has continued to increase its investment in R&D. In the first half of the year, GCL's integrated R&D investment totaled 4,070,100 yuan, representing a year-on-year increase of 13.28%.
One minute, one harvest. In the past year, GCL's integrated photovoltaic diamond wire cutting and black silicon polycrystalline cell technology, PERC high-efficiency battery technology, and shim technology have been industrially applied. Among them, black silicon combined with PERC polycrystalline high-efficiency technology, 60 plate-type components for the production of the main stall power exceeds 285 watts, to meet the photovoltaic leader project requirements.
In addition, as part of the earliest companies engaged in the research and production of solar grade polysilicon technology, Yongxiang shares under Tongwei have invested heavily in technology research and development in the past two years. Polysilicon's gross profit margin increased significantly in 2017. Data show that last year, Tongwei shares Yongxiang shares polysilicon business gross margin reached 46.83%, an increase of 5.8%.
Industry experts told reporters that large companies such as Longji, GCL, and Tongwei continue to increase investment in R&D, not only promoting technological innovation, but also driving the growth of their main business, and finding a sustainable and stable growth pole for their development. A revolutionary technological breakthrough may lay a firm's future competitive advantage. It can be said that in the era of small profits, advanced technology is a "magic weapon" for PV companies to stand on the market in an invincible position. Today, the photovoltaic industry has entered the era of "technology is king." (Reporter Yang Yipeng)
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