June 13, 2019 Source: New Energy No. 1

After a turmoil after one after another, the photovoltaic industry has finally moved to a stable development.

However, behind the seemingly calm, there is a bigger wave.

The recent landing of the top-level policy means the beginning of the parity of the photovoltaic industry. With the advent of this era of parity, the battle for change within the photovoltaic industry has officially started.

Unlike many industry changes in the past, this change has been direct and fierce. It forced PV companies to upgrade their technology and adjust their industries, which made enterprises begin to examine themselves from a more commercial perspective.

Under the change, do you want to expand production, break your arms and protect yourself? Some companies have already made choices.

Non-stop expansion of photovoltaic giants

Every good situation in the photovoltaic industry will lead to a new round of capacity expansion.

Before 2010, the influx of high investment and high subsidies made domestic PV companies experiencing a rapid expansion, and the rise of well-known photovoltaic giants such as Wuxi Suntech and Yingli.

Around 2016, the photovoltaic industry has undergone a new round of booming cycles, and PV companies have ushered in a second wave of expansion, and Jingke and other newcomers have made their mark.

Since then, the sudden changes in the policy have brought the entire photovoltaic industry into a “dark moment”, and the industry has entered a relatively long cooling period, and some of them have begun to retreat.

Now, after a whole year of adjustment, the photovoltaic industry is showing signs of recovery. In particular, as the voice of cheaper Internet access is getting higher and higher, PV companies have joined the third round of expansion.

On May 30, Zhonghuan and Poly Energy Co., Ltd. jointly announced that the joint venture company Inner Mongolia Xinxie Photovoltaic Materials Co., Ltd. (hereinafter referred to as “Central GCL”) plans to invest in the “industrialization of monocrystalline silicon materials for solar cells”. The fifth phase of the project will increase the production capacity by 25GW.

After the new capacity is added, the overall production capacity of the Central Industrial Park will reach 55GW or more, accounting for nearly 50% of the global monocrystalline silicon capacity. This will also become the world's largest production base for monocrystalline silicon for high efficiency solar energy.

In addition to monocrystalline silicon, GCL-Poly announced in April this year that it will invest 6 billion yuan to rebuild 60,000 tons of high-quality polysilicon base in Leshan, Sichuan.

Coincidentally, another domestic monocrystalline silicon giant, Longji, has also announced a new expansion.

In mid-April, Longji shares announced that the company will invest in Yinchuan to build an annual output of 15GW of monocrystalline silicon rods and wafer projects and 3GW of monocrystalline battery projects. This is a step closer to Longji's goal of achieving 45 GW of monocrystalline silicon wafer capacity by the end of 2020.

Tongwei shares will focus on the world's largest crystalline silicon solar cell companies. In March of this year, Tongwei re-injected high-efficiency crystalline silicon battery project. With the commencement of the Chengdu 3.8GW high-efficiency crystalline silicon battery project, Tongwei Chengdu Base will become the world's first 10GW battery base within this year.

The expansion of the industry is not only reflected in the upstream. Previously, in March, photovoltaic glass manufacturer Follett had proposed to use IPO to raise 1.82 billion yuan to expand photovoltaic glass projects.

It can be said that since the fourth quarter of last year, the expansion of the photovoltaic industry has quietly spread to the entire industry.

As a high-tech industry, the technological change of photovoltaic products is very fast. It has become an important way for enterprises to reduce costs through new production capacity and improve the market competitiveness of products.

The emergence of each expansion tide means that the market demand for the photovoltaic industry is picking up.

However, unlike the previous expansions, the photovoltaic industry is in a critical period of transformation and upgrading due to the landing of affordable Internet access. At this time, the expansion of production has largely defined the future pattern of the industry.

Departure: the choice that companies have to make

The photovoltaic industry has experienced many years of development in China and is gradually moving towards a mature and stable industry. Today, the industry is accelerating internal adjustments, and many companies stand out, but others face awkward living conditions.

On May 17, Hairun Photovoltaic, which had been eager to build a market value of 100 billion yuan, issued an announcement, and the Shanghai Stock Exchange decided to terminate the company's stock listing.

Hairun PV was once a prosperous crystalline silicon solar energy manufacturer in the industry, and its crystalline silicon integrated production capacity is among the highest in the world.

In the photovoltaic winter of 2012, Hairun announced its listing and invested heavily in large-scale photovoltaic power plants. This move has made the company's capital chain tight and the corporate debt ratio has risen year after year.

Coupled with many factors, Hareon Solar has suffered losses in successive years. By 2019, the core subsidiaries of Hairun PV have gone bankrupt.

Hairun’s sudden departure has given the photovoltaic industry a wake-up call. Although there was no one in the limelight, Hairun apparently did not adapt to the rapid change of technology and the increasingly fierce market competition.

The blind expansion of the transition has caused the company to lose its competitive edge and eventually lose its market.

In the photovoltaic industry, the decline of the giant seems to have become the norm in recent years. This year, in addition to Hareon Solar, Jiangxi Xuyang Reddy is also in a state of worry.

At the end of April, according to the Jiangxi Jiujiang Intermediate People's Court, due to insufficient assets to pay off all debts, Jiangxi Xuyang Reddy officially entered the bankruptcy reorganization process.

Xuyang Reddy was the second largest PV company in Jiangsu Province, mainly engaged in solar wafers.

The decline of Xuyang Reddy has a certain representativeness in the industry. Its first crisis came from the “double opposition” of the European Union and the United States to Chinese PV companies in 2012. Since then, as the industry has just picked up, Xuyang Reddy has chosen to expand its production scale. Due to the lack of technological competitive advantage, the situation of Xuyang Reddy is not as expected.

On the surface, Xuyang Reddy's problem has been greatly affected by domestic and foreign PV policies, but in the final analysis, it is still due to the lack of sufficient technological advantages and product advantages, which is the main reason why many PV companies have suddenly retired in recent years. .

Both Hareon Solar and Xuyang Reddy have occupied a place in the photovoltaic industry. Nowadays, under the differentiation of the industry, the survival problems of these enterprises are particularly outstanding.

Stable industry and turbulent companies

Regardless of the changes in the company, the industry is still moving forward with the usual rules.

In recent years, the achievements of China's photovoltaic industry have attracted worldwide attention. After expediting progress, the industry is gradually returning to rationality.

Even in the case of a new wave of expansion, we have seen a very different change in the photovoltaic industry from the past.

In 2013, Wuxi Suntech was remembered by industry insiders for the bankruptcy reorganization caused by the expansion. Since then, the industry has become cautious about the company's expansion.

In the case that the existing production capacity is close to saturation, what is the significance of the enterprises that have expanded their production at this time?

In fact, in the face of future parity Internet access and global market competition, many companies choose to expand production capacity to enrich product structure. In the long run, it will help enterprises to further reduce costs, thereby taking advantage of technology and scale to obtain more profits. .

In other words, for most PV manufacturers, especially the first echelon companies, expansion is a shortcut to maintain competitiveness and dilute costs.

In recent years, the actions of PV companies to expand production scale have emerged in an endless stream. However, unlike some enterprises that simply expand their production in order to expand production, PV companies are based on the original main business. Guided by high quality and cutting-edge technology, we will deploy new production scales.

As Wang Bohua, vice chairman and secretary general of China Photovoltaic Industry Association, said, it is now an important period for the survival of the fittest in the photovoltaic industry. Concentration improvement is beneficial to large enterprises.

It is based on this attitude that at this time in the critical period of industry adjustment, a new batch of enterprises expanded.

Although the development of the photovoltaic industry still needs policy guidance in the short term, the industrial structure has begun to develop in a stable direction. In the future, the domestic PV industry will be in the transition to a cheaper Internet, which gives the company a long-term and stable adaptation period, which will help the company to better match the market.

The maturity of the industry promotes the growth of the company, and naturally it will be accompanied by differentiation and elimination. Whether it is a renewed change in international policy or a blind expansion of the enterprise itself, it will likely become the "fire" of the next giant.

In short, parity Internet access will become a watershed in the photovoltaic industry. The pattern is fixed, who will successfully enter the first photovoltaic echelon? Who will regret leaving? We will wait and see.