December 14, 2017 Source: SOLARZOOM Photovoltaic

With the official entry into force of the Paris Agreement, the development of new energy and clean energy has become the trend of the times. As a universal application of clean energy, photovoltaics will be rapidly applied, and the global installed capacity in 2017 will enter the 100 GW mark. The GTM report of the research institute pointed out that in 2017, the installed capacity of photovoltaics in 8 countries will exceed 1 GW, and by the end of 2018 it will increase to 13. According to China's national energy development "13th Five-Year Plan", China's non-fossil energy will account for more than 15% of primary energy consumption by 2020. The National Development and Reform Commission and the Energy Bureau's "Revolutionary Strategy for Energy Production and Consumption (2016-2030)" proposes that by 2030, non-fossil energy power generation will account for 50% of total power generation, and by 2050 it will account for 70%-80% of total electricity. %, there is still much room for improvement compared to the current level. In 2017, China's new photovoltaic installations reached a record high of nearly 50 GW, but in the first three quarters, PV accounted for only 1.8% of total power generation. According to CITIC's new calculation, China's PV installed capacity may reach 2,600 GW in 2030, and its development potential is huge. China's PV manufacturing enterprises currently have an overwhelming advantage in terms of technology and cost. Under the expectation of a clear development situation, major leading companies have announced an increase in production or expansion.

Structural overcapacity reverses the benign development of the industry

2017 is a year of massive expansion of the PV industry chain. According to public data, in terms of polysilicon materials, Tongwei has built a capacity of 100,000 tons in Leshan and Baotou, and GCL-Poly has a 4-6 million-ton expansion plan in Xinjiang. The new hope is to expand the production plan of 100,000 tons in Xinjiang; In the silicon wafer and battery terminals, single polycrystalline enterprises represented by Longji, Zhonghuan, Tongwei, Rongde, Jingyuntong and Dongfang Risheng have also announced large-scale expansion. Some people believe that 2018 will be a year of serious overcapacity in the entire industry chain. We believe that moderate overcapacity is conducive to market competition, and ultimately survives with the dual advantages of quality and cost.

1. Actual production data is much lower than planned production capacity

The expansion of production by the leading companies will not necessarily end up. The promotion is more to win the favor of the capital market. Rational photovoltaic companies will master the rhythm according to market conditions, especially monocrystalline silicon wafers and battery terminals. Due to insufficient production capacity of high-purity polysilicon raw materials, its output is far from being announced. According to the expansion data released by major mainstream manufacturers, it is estimated that the domestic monocrystalline silicon wafer production capacity will be 35-40 GW by the end of 2017, and according to CITIC's new calculation, its output is only about 25 GW.

2. Maintain adequate supply growth. Beware of structural overcapacity.

The photovoltaic industry exists in a fully competitive market-oriented mechanism, and the survival of the fittest is accompanied by the development cycle of the whole industry. From the analysis of the history of polysilicon development, before and after 2007, the price of polysilicon was fired to more than 500 US dollars / kg. Then hundreds of companies across the country announced the launch of polysilicon. At the time, it was actually launched more than 50, but after the winter, only survived. There are 7 companies, these seven 10,000-tonne polysilicon enterprises have mastered the improved Siemens closed-loop technology, which has grown stronger in energy saving, lowering costs and improving quality, and has become the main supplier of global polysilicon market. The photovoltaic industry has great potential for development. In the case of rapid growth in demand year after year, the growth of supply must be higher than the growth of demand. The appropriate surplus allows the low-end production capacity to withdraw from the market. Full competition is conducive to the progress of the industry.

3, high purity, high efficiency, cost-effective products are scarce, 2018 quality products are still in short supply

High quality, differentiation and low cost are the weight of any product to maintain market competitiveness. In the polysilicon material end, taking the leading Poly GCL, for example, according to the announcement, the Xuzhou base electronic grade polysilicon has been mass-produced, Xinjiang polysilicon will fully meet the CCz continuous CZ single crystal and N-type single crystal materials demand. We predict that after the partial expansion of polysilicon production capacity in the second half of 2018, the silicon material that can meet the continuous straight-drawing single crystal of CCz and the silicon material that can only meet the demand of ingot can be opened up to more than 10,000 yuan/ton. High quality silicon materials will still be in short supply. In addition, GCL-Poly has completely modified the traditional mortar cutting at the wafer end, and the diamond fiber cutting with doubled production capacity will be completed by the end of the year. The black silicon technology of the diamond wire line will greatly improve the efficiency of the crystalline silicon product and reduce the cost. The current and full orders in the first half of 2018. Compared with the single route of Longji and Central, GCL-Poly, which adheres to the development of two-line, promotes the reduction of the whole industry chain and promotes the efficiency of the whole industry chain. In the development of single crystal products, it chooses to cross the Zhonghuan shares known for its high technology and high quality. Participation in the stock, to achieve single polycrystalline technology.

4. The backward production capacity is gradually introduced into the market, and the Matthew effect will appear.

In terms of polysilicon, the comprehensive power consumption of more than 80-100 degrees / kg will be withdrawn from the market; at the long crystal end, the old ingot furnace below 600 kg, the single crystal furnace that can not meet the demand for continuous straight pull will be eliminated; At the slicing end, the backward sand cutting capacity will completely withdraw from the market in the middle of 2018. It is difficult for a single polycrystalline enterprise that has no ability to transform or has no time to renovate. Even if the diamond wire cutting transformation is completed, the quality is unstable and the process is not mature. Silicon wafer companies will also face significant market pressure; on the battery component side, low-automity production lines will not be able to provide efficient and low-cost photovoltaic products.

The whole industry chain costs drop rapidly and outperform the market

China's PV market has gradually erupted since 2013, and the final installed capacity is expected to exceed the beginning of the year. According to the statistics of the China Photovoltaic Industry Association, at the beginning of 2016, the domestic installed capacity of photovoltaics was estimated to be 18 GW, while the actual installed capacity was 34.5 GW. In early 2017, the domestic installed capacity of PV was estimated to be 20-30 GW, and from January to September. The new installed capacity has reached 42 GW.

1. The rapid decline in the cost of photovoltaic industry chain is the main reason for the market's installed capacity exceeding expectations.

According to the statistics of China Photovoltaic Industry Association, in the 8 years from 2007 to 2017, the market price of photovoltaic modules dropped by 36 yuan/watt to below 3 yuan/watt, down by 92%; the price of grid-connected photovoltaic system dropped from 60 yuan/watt to 7-8 yuan / watt, down 87%; inverter price dropped from 4 yuan / watt to 0.3 yuan / watt, down 92%. In the past two years, the price of PV modules has remained at a rate of more than 30%. According to the new energy data of Jibang, the price of components has dropped from 4 yuan/watt above the beginning of 2016 to the current range of 3 yuan/watt. The polycrystalline components dropped to 2.8 yuan/watt at the beginning of 2017. By 2020, it is possible to reduce the price of photovoltaic power generation by another 30% and realize the parity of the electricity side. The decline in the price of the PV industry chain far exceeds expectations, significantly reducing the subsidy pressure, and stimulating the use of photovoltaic power generation in major markets around the world, especially in developing countries. This is the main reason why the installed capacity of photovoltaics exceeds expectations every year.

2. The technology dividend is released, and the future industry chain cost will continue to decline.

At the silicon material end, the expansion rate of polysilicon capacity is less than the downstream expansion rate, and the market situation of rising demand for prices is not sustainable. According to the publicly available information of various polysilicon enterprises, the new capacity in the western region will be gradually released in 2018. The leading enterprises such as Daxin Energy, Xinte Energy and GCL-Poly have accumulated more than 100,000 tons of high-quality capacity expansion plans. For example, the base for the transfer of GCL-Poly Xinjiang has started construction, and it will be completed and put into operation in the second half of next year, and its cost will be the lowest in the world. After the capacity transfer, the remaining capacity of Xuzhou base is covered by the low power price of the self-supplied power plant. The cost is lower than that of all non-western low-price regions. Together with its low-power consumption silane fluidized bed method, granular silicon is about to be mass-produced. The price of polysilicon is expected to be There was a sharp drop at the end of 2018. In addition, at the end of the crystal growth stage, the polycrystalline ingot will not increase the production capacity of G8, and the G8 will increase the production capacity by 30%, and optimize the crystal structure through thermal field modification to further improve the efficiency; CCz continuous Czochralski single crystal technology and ingot single crystal technology will be further developed and applied. At the slice end, the popularity of diamond wire cutting in the polycrystalline field reduced the overall cost by 30%. The wire diameter and price of the diamond wire further declined. The diamond wire cutting + black silicon + PERC increased the polycrystalline efficiency to 20.5%. At the battery component end, the application of new technologies such as HJT, IBC, MWT, half-chip technology, and tile technology will increase component power. The full reduction of the technology and the efficiency of all links in the entire industry chain will bring about a continuous decline in the price of end products. According to a new analysis by CITIC, the cost of photovoltaic power is expected to reach 0.4 yuan/kWh by the end of 2019.

3, distributed photovoltaic, photovoltaic poverty alleviation, "leaders" project is the troika that drives industry development

According to the China Photovoltaic Industry Association, domestic ground/distributed power plants increased by 27 GW/15 GW from January to September, a year-on-year increase of 20%/300%, and distributed installed capacity grew rapidly. In November 2017, the National Development and Reform Commission and the Energy Bureau jointly issued the “Notice on Launching a Pilot Market for Distributed Power Generation Markets”, clarifying that distributed power generation uses nearby clean energy resources to achieve market-oriented transactions. There is no indicator bottleneck in the distribution, and the “selling wall sales” breaks through the restrictions, and the grid collects electricity charges without worrying about default. Moreover, the market has derived a variety of distributed "photovoltaic +" mode, roof photovoltaic, agricultural light integration, fishing light integration, etc. According to CITIC new measurement, the above total potential installed capacity is about 7,200 GW, the industry believes that distributed The outbreak of 2017 is only the starting point. In terms of photovoltaic poverty alleviation, as of September 2017, 13 provinces have all included indicators for PV poverty alleviation. According to published data, the total amount will reach 10 GW. PV poverty alleviation has the advantages of not subsidizing subsidies and ensuring consumption. With the support of important national policies, PV poverty alleviation policy will continue to be an important part of accurate poverty alleviation. The "Lead Runner" policy has planned an index of 32 GW for 4 years during the "13th Five-Year Plan" period. Although the relative amount is not large, it has a significant demonstration effect on the photovoltaic industry. Under the situation that the general centralized ground power station indicators are gradually tightening, distributed, photovoltaic poverty alleviation, and “leaders” projects will become the main substitutes for the market.

4, subsidies will gradually decline, leading enterprises lead the Internet

As the price of photovoltaic products continues to decline, subsidies need to be declining year by year has become an industry consensus. We believe that the new energy industry needs state support in the flood season. If the cost of electricity is not continuously reduced, the industry will lose its vitality. After PV realizes the parity of the power generation side, it will get rid of subsidies, and all the links will be fully competitive. The manufacturing enterprises without quality and cost advantages will be eliminated. The ultimate survival is the manufacturing leading enterprises and the small and micro supporting service enterprises with innovative business models.

Emerging markets, trade barriers, micro-effects

1. The European PV market is gradually shrinking

Affected by the economic downturn, major EU member states have severely cut subsidies, and trade protection, constrained by price commitment mechanisms, has constrained PV development. According to Jibang New Energy Data, the newly installed capacity of PV in the EU has dropped from 16.5 GW in 2012, 10 GW in 2013, and 7 GW in 2014 and 2015 to 6.7 GW in 2016. , falling year by year. Although the EU adjusted the minimum import price limit (MIP) in September 2017, the MIP gradually decreased from October, but the price is still higher than the market price by more than 30%. Most of China's major PV companies have withdrawn from the price commitment agreement, mainly exporting to Europe with third-tier capacity. The scale of the European market is small, and Chinese companies have evasive measures, and their trade policies have little impact on China's PV exports.

2. The US “201” clause has limited impact on the industry as a whole.

The US government made a damage ruling on September 22 and launched a "201" investigation on all PV products imported into the United States. At the end of the recent year, we judged that the final judgment of "201" is definitely not good for non-US products including China's PV. However, the demand for the US market in the first half of next year has been rushed into the United States in the second half of this year. The demand after the second half of next year depends on the trend of the photovoltaic power generation market in various states. Under the strong pressure of China's photovoltaics in the past five years, the US solar cells and component companies have not survived. Suniva and Solarworld, which have gone bankrupt, have SolarCity, SunPower, Firstsolar and other investment applications to the power station, which are no longer available. Photovoltaic product manufacturing competitiveness. In the short term, the capacity of other countries cannot meet the needs of the United States. Therefore, the taxation of revenue means that the procurement of photovoltaic modules can only increase the price, which is a serious blow to the development of the US photovoltaic industry. We believe that the impact of the "201" survey on China's PV industry and the last "double opposition" are no longer the same. According to CITIC's new forecast, the US installed capacity will be reduced to 6 GW by next year. The global installed capacity will be 110 GW next year, down about 5%. The impact of the US market turmoil on overall demand is limited.

3. India's photovoltaic manufacturing industry chain is still weak, China's PV raw materials are still needed.

According to the China Photovoltaic Industry Association, India has replaced Japan as the world's third largest market and China's largest exporter of photovoltaic products. From January to August 2017, exports accounted for 28.3%, and 2017 PV installations are expected to reach 9- 10 GW. Affected by severe smog, India announced a huge clean energy promotion plan, but the Indian PV manufacturing industry chain is incomplete and still relies heavily on Chinese imports in the short term. In July 2017, the Ministry of Commerce and Industry of India issued an announcement to launch anti-dumping investigations on photovoltaic cells and components imported from China, Taiwan and Malaysia. The development of the Indian market is inseparable from the high cost performance and sufficient capacity of China's photovoltaic products, especially the silicon wafer products with a global capacity of 90%, so the wafers are not in the catalogue of anti-dumping investigations. However, many photovoltaic leaders such as Artes, GCL, and Jingao have announced cooperation with Indian companies to promote the manufacture of photovoltaic products in India.

4. Emerging markets have seen an increase in export growth beyond the traditional market

According to the data released by the China Photovoltaic Industry Association, the export volume of wafers in January-August 2017 increased by 23.4% year-on-year, concentrated in Taiwan, Malaysia, Thailand, Vietnam, and South Korea. The exports of these five countries accounted for over 90%; The export volume of battery chips increased by 39.1% year-on-year. The market is mainly in Brazil, India, South Korea and other countries; the export volume of components increased by 33.6% year-on-year. The mature markets in Europe, America and Japan are becoming stable. The emerging markets in Southeast Asia, the Middle East and South America are gradually expand. It can be seen that the main export of photovoltaic products in China's entire industrial chain has become an emerging market, and trade barriers in Europe and the United States have not affected much.

Future cost-effective PV products will dominate the market

According to the analysis of Jibang New Energy Research, since the end of the third quarter of 2017, the demand for the entire industrial chain of monocrystalline silicon wafers, batteries and modules has seen a sharp decline. The price reduction has not yet seen the market pick up; With reasonable prices and high cost performance to meet the strong market demand, the battery end has also turned to polycrystalline production lines.

1. Analysis of technical characteristics of single polycrystalline products

Single-crystal conversion efficiency has been superior to polycrystalline, but cost control has been difficult, and the market share has remained below 20%. In the past two years, due to the promotion of diamond cutting and the assistance of China's “leaders” program, the market share of single crystals has been on the rise. Polycrystalline conversion efficiency is not as good as single crystal, but the efficiency difference is not large, and the polycrystalline efficiency is getting closer and closer to single crystal. The key is low cost and high cost performance. The difference between single crystal and polycrystal is at the silicon wafer end, and the silicon wafer end is different at the long crystal end.