Difficulties and future development trend of photovoltaic industry

Will there be a dilemma in the future development of the photovoltaic industry? What will be the specific trend?

After China’s solar photovoltaic industry enters the 21st century, under the guidance of the party’s reform and opening-up policy, the economically developed areas in eastern China, which became rich first, rely on loose financing channels and regional local preferential policies; And the traditional foreign trade channel of “two ends abroad” formed in the early stage of reform and opening up, coupled with the regional advantages of introducing new product production factors in coastal areas; In a short period of about ten years, large-scale production equipment has been introduced to develop the production and assembly capacity of monocrystalline silicon photovoltaic cells. In the history of new energy development all over the world, it has left a strong mark: in 2001, the annual output of monocrystalline silicon photovoltaic cells in China was only 4.5mw. By 2010, the output of photovoltaic cells in China had soared to 8000mw, an increase of more than 1770 times in ten years; The consumption of China’s market is only 50MW. In 2012, the total capacity of photovoltaic cells in China soared to more than 40gw, with an actual output of 21gw. In the history of modern industrial development, this is an extremely rare special case of ultra-high speed blind advance. The result of the super expansion of production capacity has pushed China to the honorary position of “No. 1 in the world in the output of new energy photovoltaic cells”. However, due to serious overcapacity, a large number of products are overstocked, and the production line is forced to shut down for production, Under the severe situation of “living money” turning into “dead money” or bank “debt”, where are the social and economic benefits achieved by this blind “great leap forward” is a question worthy of calm and self-examination by every enterprise involved. In fact, since 2011, with the in-depth development of the European and American financial crisis and the prevalence of trade protectionism around the world, European and American countries have carried out the so-called “double anti” of Chinese photovoltaic products According to the investigation, a series of excuses and targeted trade protectionism measures have been adopted to “set restrictions” everywhere to hinder the export of China’s photovoltaic products to the western consumer market, resulting in a sharp drop in China’s photovoltaic cell production. Many photovoltaic cell production enterprises are facing closure due to product backlog and broken capital chain. In the early 1980s, they were once used as the western region of China, Under the impact of this crisis, the first established manufacturer to introduce foreign advanced solar cell production technology and equipment – “Yunnan semiconductor device factory” – later known as “Yunnan Tianda sunshine”, also failed to escape the fate of being involved in the bottom of the valley.

China’s solar photovoltaic industry has soared from a rapid development to a crisis ridden depression. In a short time of less than a decade, this kind of “roller coaster” ups and downs and the rise and fall of ice and fire; Everyone in the industry is deeply impressed. Obviously, there are many reasons for this dilemma. We should sum up the experience of development or the lessons of failure, and we have to explore and aftertaste it slowly. What deserves our serious discussion today is the practical problem of how to get rid of the dilemma and “find a way out and solve the crisis”. The so-called eat a moat, grow wisdom: in order not to repeat the mistakes, we have to seriously sum up the lessons of hasty decision-making. We must think about anything before we act! You can’t be hungry, let alone break the jar.

At present, what China’s solar photovoltaic industry needs to do most is to establish and improve the long-term mechanism for eliminating backward production capacity under the guidance and promotion of national industrial policies; Under the premise of forcibly tightening resources, credit and energy consumption, eliminating and shutting down the production lines of inferior products, strictly control the increment, optimize the stock, innovate the quality, and strive to promote the structural adjustment of the whole industry. Let those backbone enterprises with scientific and technological innovation ability, in line with market demand and strong market competitiveness, and advanced equipment and technology survive first. And take them as the core, carry out industrial transformation and upgrading, and promote merger and reorganization with the goal of optimizing and gathering resources; Form a group with low comprehensive energy consumption, low material consumption, strong technology R & D ability, independent intellectual property innovation ability and brand advantages; Its terminal products have the advantage of strong international competitiveness. It is a photovoltaic cell manufacturing enterprise group. At the same time, governments at all levels should strengthen the policy guidance of industrial development planning and industrial structure adjustment, and promote the orderly development of photovoltaic industry matching market demand. Improve policy support measures and deepen enterprise reform, strengthen market supervision and industry management of photovoltaic industry, promote the construction of basic management system of standardization system and testing and certification system, and improve the technical threshold for market access of photovoltaic products. Let advantageous enterprise groups get rid of difficulties as soon as possible and move towards the future again. In the situation that the whole industry is in trouble, making necessary and mandatory trade-offs will only further drag down the overall survival and hinder the future development of the industry.

  1. Challenges faced by China’s photovoltaic industry

From the production of solar cells in the world, the development of the industry has been relatively slow since the formation of the industry in the 1970s until the mid-1990s. However, it began to accelerate after 1996, with an average annual increase of 33% in global output: after entering the 21st century, the average annual growth rate reached 43%; After entering the 21st century, it grew again, with a net increase of 61.2% over the previous year in 2004. In that year, the total output of photovoltaic cell modules in the world reached 1200mW; The speed of development is amazing. Today, photovoltaic industry has become the fastest growing high-tech industry in the world. China’s photovoltaic industry, which started in the 1980s, has just surpassed India’s solar cell output (52mw) in 2004: but two years later, China’s solar cell output (150MW) began to exceed that of the United States in 2006. By the end of 2012, the actual output of photovoltaic cells in China was 21gw; However, the actual annual production capacity of photovoltaic cell modules of more than 40 large photovoltaic enterprises in China has reached more than 40gw; In that year, the total installed capacity of new PV in the world was 32gw, which was only 80% of China’s production capacity. In order to safeguard the interests of China’s photovoltaic enterprises, the Chinese government took extraordinary measures that year, adding the installed capacity of solar cells, which was nearly twice the national cumulative ownership before 2011, reaching 3.5gw/year; It accounts for 11.7% of the total installed capacity in the world, but it is only 16.6% of China’s actual solar cell production. With the rising output, the normal power generation cost of photovoltaic modules has been reduced by two orders of magnitude in the past 30 years. From 2007 to 2012, just before the world financial crisis, the global price of photovoltaic cell modules decreased by 86.6%; The system price decreased by 83.3%; Photovoltaic electricity prices fell 76.2%. From the perspective of development, the 21st century is a new century of great development, utilization and development of new energy. With the improvement of equipment technology and the increase of quality and output, the cost of the whole photovoltaic industry is reduced and the economic benefit is declining, which is an inevitable trend in the normal state; However, with the serious overcapacity and the pressure of declining economic benefits, the chain reaction will increase. Unfortunately, the “house leakage has been rained at night”. Since the financial crisis broke out in European and American countries in 2008, European and American countries have adopted the so-called “double anti” investigation on Chinese photovoltaic products for trade protectionism and ulterior political purposes, publicly suppressing the production and export sales of Chinese photovoltaic modules; As a result, China’s exports of photovoltaic modules fell sharply by 40% year-on-year in 2012, forcing China’s photovoltaic modules from 30 yuan / WP; Reduced to the current 5 yuan / WP ~ 6 yuan / WP (in June 2013, the final compromise price reached by China and the EU was 0.56 euros / WP); Under the dual pressure of “double reverse” in Europe and the United States and extreme overcapacity, China’s solar photovoltaic industry immediately fell to the bottom of the severe winter: many photovoltaic enterprises expanded their products, broke their capital chain, became insolvent and closed down.

Newly installed PV capacity in China (GW)
Analysis of the development scale of China’s photovoltaic industry in 2018 It is expected that the perc production capacity in 2019 is expected to exceed 110gw coating

Why is China’s solar photovoltaic industry, which once made great progress and flourished for a time, so weak when it is entirely possible to foresee market fluctuations? According to the data released by the national renewable energy center, from 2008 to 2011, when the financial storm began, the actual production and development of China’s photovoltaic industry for four consecutive years, just a few lines of data show a lot of experiences and lessons worthy of our whole industry:

When the financial crisis broke out in 2008, the annual output of China’s photovoltaic industry had reached 2600mwp; At that time, China’s market capacity was only 50mwp, accounting for only 1.92% of the total output: however, between 2009 and 2011, China further blindly expanded production capacity against the global financial crisis by as much as five times. On the premise that the foreign financial crisis has surged, it is obviously a very unwise impulsive decision for China’s photovoltaic industry to go deep alone and expand production capacity again regardless of all the consequences. What’s more incredible is that under this severe situation, China’s photovoltaic industry is still wishful thinking to balance production and sales in the United States, where its production and sales have long tended to balance, and in the European market, which is deeply dragged down by the U.S. financial crisis and has been very depressed in economy! In a sense, the situation of China’s photovoltaic industry today is entirely the result of its disorderly expansion and blind expansion. Of course, the reasons for the occurrence and collapse of PV foam are manifold. As the editorial department of titanium Yang energy said in a commentary, “many countries are cutting subsidies for PV under the background of the international financial crisis, but it has not attracted the attention of many enterprises including Suntech, China, and is still expanding their capacity in a crazy way”. China’s photovoltaic capacity exceeds the demand of the world market, which is a typical symptom of local economic crisis in the photovoltaic field. The “wealth myth” created by Wuxi Suntech in the short term “has triggered the herding effect of China’s rush for photovoltaic”. If we continue to follow up and analyze, it can be said that there are unshirkable responsibilities of local governments. The current dilemma faced by China’s photovoltaic industry is that in the previous stage, under the guidance of the GDP performance view of some local governments, “irrational expansion led to savage growth and buried the root of overcapacity”. After the introduction of China’s new energy related policies (including the “golden sun demonstration project”) in 2009, a considerable number of local governments still failed to be vigilant, failed to timely and calmly judge the changes in the international market, and shifted their main attention to strictly controlling production capacity growth and vigorously developing China’s consumer market; Instead, they continue to vigorously support local photovoltaic production within their jurisdiction, resulting in low-level redundant construction, vicious competition and false prosperity. “Photovoltaic enterprises kidnap ‘the abnormal photovoltaic ecology of local governments, which is formed”. It can be said that China’s photovoltaic industry is still an emerging market that cannot be completely supported by the government. We need the government to use the invisible hand of “policy” to guide the restrained and coordinated development of this emerging industry in a planned, proportionate and flexible way. There is only one purpose, that is, to become self-reliance as soon as possible, gradually reduce the dependence on the government, and make it continuously rely on the market mechanism to achieve stability Healthy and normalized development “Suntech has experienced ups and downs, from prosperity to decline, and now it has gone bankrupt and reorganized, falling down from the altar”; China’s photovoltaic industry has entered the “post Suntech era”; Is a bad thing, is also a good thing; It is never too late to mend. How to minimize the loss of photovoltaic industry and revitalize and develop the whole Chinese solar energy industry healthily is the political responsibility and historical mission faced by colleagues in the industry and governments at all levels. Because this industry has developed to this day, any major mistake is not only bad for entrepreneurs themselves, but also bad for the country and the people.

One of the reasons for the ups and downs of China’s solar photovoltaic industry. From the technical level, China’s photovoltaic industry does not make enough efforts in the development and innovation of photovoltaic product application technology and the market development of relevant civil products. For a long time, this industry has been “painting the ground as a prison”, focusing only on projects with single technology and limited market prospects in China, such as street lamps, courtyard lamps and independent photovoltaic power plants supported by national poverty alleviation funds. For a long time, in developing the Chinese product market, Chinese photovoltaic enterprises only stare at the pockets of government finance, run approvals and rely on state support for project approval. In fact, due to the high cost and price of photovoltaic cells, large-scale centralized grid connected power station projects covered by China’s large power grid are indeed difficult to implement without the support of government projects or financial expenses. Because, in terms of technology and cost, the cost performance of photovoltaic cells has basically no market advantage to compete with conventional energy so far. The independent power stations in remote mountainous areas far away from the large power grid are affordable due to unbalanced economic development. Therefore, if the government does not set up poverty alleviation projects and the finance does not pay, it can only be a good wish on paper

Comrade Deng Xiaoping, the chief designer of China’s reform and opening up, clearly stated in his early years that “socialism has’ market capitalism has’ plan ‘; And the dialectical relationship between “market” and “plan”. He believes that “market” and “plan” are not the characteristics of a specific social system, but an indispensable means for any human society to adjust and guide the healthy development of the national economy. Under the temptation of high input and output in the international “market” and the pursuit of GDP performance by local governments, China’s photovoltaic industry expanded blindly and fell into trouble. Investors do not realize that scarcity is more expensive. As long as any product is overproduced and supply exceeds demand, it will inevitably lead to price war and excessive price competition. Under the current situation of overcapacity crisis in the photovoltaic industry, local governments cannot leave all responsibilities to enterprises on the verge of bankruptcy, otherwise it will only lead to a greater blow to this emerging industry. On the contrary, the government has the responsibility to use administrative power to expand domestic demand through “planned” and focus on vigorously developing the effective demand of China’s photovoltaic electronic and electrical appliance application market to promote industrial technological innovation and quality upgrading; While forcibly eliminating backward excess capacity and reducing inventory backlog, we should set up an administrative restraint mechanism of high-tech threshold and industry access mechanism for existing industries in order to optimize the allocation of social resources, improve the construction of China’s raw materials and equipment supporting industrial chain, promote the merger and reorganization among low-level production enterprises, realize complementary advantages and strong alliance, and through appropriate industry intervention, Carry out the structural adjustment of photovoltaic industry and carry out the transformation and upgrading of the whole industry. In terms of the development of China’s solar photovoltaic enterprises, iron making still depends on its own hard work. Before iron making, we can only start with strengthening the development and after-sales service of solar photovoltaic electronic and electrical appliance application market to promote the development and strength of the Chinese market; Resolutely put an end to low-level redundant construction, let alone engage in beggar thy neighbor market vicious competition; Only by following the basic industrial ethics, making the whole industry more capable, stronger, more innovative and more competitive in the market, and constantly through the two-way adjustment inside and outside the industry, can we tide over the difficulties and stand in the east of the world again.

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