Version 5 on January 9, 2024.
An overview of the industry in general
1) China is rich in solar energy resources, and the theoretical reserves of onshore solar energy are as high as 1.86 million GW. China's current national standard "Solar Energy Resource Grade - Total Radiation" divides the annual irradiation of total solar radiation into four grades: A, B, C, and DAmong them, the A-level is mainly in the Qinghai-Tibet Plateau, northern Gansu, northern Ningxia and other regions;Class B is mainly in Shandong, Henan, southern Guangdong and other regions.
2) In the wave of global carbon reduction, photovoltaic power generation, as a clean energy with mature technology and leading cost, continues to be prosperous in the industry, and global enterprises attach great importance to photovoltaic power generation. At present, after years of development, China's photovoltaic industry has a complete industrial chain, and its manufacturing capacity and market share rank first in the world. The McKinsey research report pointed out that China has a huge advantage in the photovoltaic field, and its relative advantage ranks first in all industries, surpassing China's railways and home appliances.
3) At present, there are still many problems in photovoltaic power generation in China. The industrial chain is not coordinated enough, especially the upstream silicon material fluctuates greatly, and the policy of photovoltaic land, forest, grass and sea needs to be further clarified, which affects the implementation of the projectThe phenomenon of compulsory supporting industries and the allocation of energy storage still occurs from time to time, especially the construction of energy storage without use, and the increase in the risk of photovoltaic participation in the power market.
4) Photovoltaic power generation has entered the era of parity, and the next step is to move towards the era of photovoltaic storage parity, in this process, the industry's demand for cost reduction and efficiency increase is stronger. The main way to achieve cost reduction and efficiency increase is to continuously iterate on technology at the manufacturing end. At present, solar cell technology is transitioning from traditional P-type PERC cells to N-type technologies such as TOPCON, HJT, XBC, etc.
5) The photovoltaic industry is in the transition stage from the growth period to the mature period, the industry still has hidden concerns about overcapacity, and factors such as frequent international friction are also interfering with the healthy development of the industry, so the industry is also calling on the photovoltaic industry to avoid involution and vicious competition as much as possible to achieve high-quality development.
6) According to data released by the National Energy Administration, as of the end of April 2023, the cumulative installed capacity of photovoltaic power generation is about 4400 million kilowatts, a year-on-year increase of 366%。So far, photovoltaic has surpassed hydropower to become the second largest power source in the country.
7) Among the top 20 in the global photovoltaic industry, China occupies 15 seats, and the top 10 silicon wafers in the world are all from China, covering 96% of the world's silicon wafer manufacturing market. The core enterprises of the world's photovoltaic silicon wafers are all Chinese enterprises, with LONGi and Zhonghuan accounting for the highest proportion, forming a duopoly pattern.
Relevant policy situation
1) In June 2022, the National Development and Reform Commission, the National Energy Administration and other nine departments jointly issued the "14th Five-Year Plan for Renewable Energy Development", proposing to actively promote the development and utilization of photovoltaic power generation, and deploy action plans such as urban rooftop photovoltaic action, "photovoltaic +" comprehensive utilization action, and thousands of households to bathe in light action. In the "14th Five-Year Plan" and in the coming period, China's renewable energy will develop on a larger scale and in a higher proportion, enter a new stage of high-quality leapfrog development, and enter a new stage of large-scale, high-proportion, low-cost and market-oriented development.
On June 1, 2022, nine ministries and commissions, including the state, jointly issued the "14th Five-Year Plan for the Development of Renewable Energy", proposing to accelerate the promotion of large-scale wind and solar power generation bases focusing on deserts, Gobi and desert areas. At present, the National Energy Administration gives full play to the role of the national and provincial coordination mechanism, adheres to monthly scheduling, regularly holds renewable energy development and construction situation analysis meetings, timely grasps the progress of the construction of the base project, coordinates and solves relevant problems in a timely manner, promotes the construction of the base to achieve tangible results, and the construction of the wind and solar base is advancing rapidly.
3) On December 26, 2022, the National Energy Administration issued a notice on the Administrative Measures for the Development and Construction of Photovoltaic Power Stations, clarifying that photovoltaic power plants will be subject to record management to serve the faster development of the photovoltaic industry. The demand for installed photovoltaic power plants, especially ground power stations, is expected to further increase.
On March 20, the National Energy Administration issued the Notice of the Comprehensive Department of the National Energy Administration on Matters Concerning Promoting the Large-scale Development of CSP. The notice states:1. Fully understand the importance of the large-scale development of CSP. 2. Actively carry out research on the large-scale development of CSP. 3. Combined with the construction of new energy bases in deserts, Gobi and desert areas, CSP projects will be implemented as soon as possible。4. Improve the technical level of CSP projects.
Industry fundamentals
General class
Relevant data show that compared with the fixed installation of photovoltaic systems, by tracking the sun's position and using photovoltaic tracking systems, the power generation capacity of photovoltaic systems can be increased by 10%-35%, and the power generation cost can be reduced by 2%-5%.
About photovoltaics
1) Photovoltaic is the abbreviation of solar photovoltaic power generation system, which is a new type of power generation system that directly converts sunlight radiation energy into electrical energy by using the photovoltaic effect of solar cell semiconductor materials, and has two modes: independent operation and grid-connected operation.
2) Photovoltaic power stations can be divided into centralized photovoltaic power stations and distributed photovoltaic power stations. Among them, centralized large-area photovoltaic is usually built in deserts, Gobi and other regions, making full use of the abundant and relatively stable solar energy resources in desert areas to build large-scale photovoltaic power stations, and supplying long-distance loads by connecting to high-voltage transmission systemsDistributed photovoltaic is generally built on the roof of the building, the roof, the roof of the factory and other places, more based on the surface of the building, to solve the user's electricity problem nearby, through the grid to achieve the compensation and delivery of the power supply difference.
3) The photovoltaic industry chain includes six links: silicon materials, ingots (rods), slices, cells, battery modules, and application systems. The upstream is the polysilicon and wafer linksThe midstream is the cell and module segment;The downstream is the application system link. From a global perspective, the number of enterprises involved in the six links of the industrial chain has increased significantly, and the industrial chain of the photovoltaic market has a pyramid-shaped structure.
4) In distributed photovoltaic power stations, the scheme of combining photovoltaic modules with buildings is called BIPV or BAPV. BIPV (Building Integrated Photovoltaic) refers to Building Integrated Photovoltaic, also known as "building material" solar voltaic building. BAPV (Building Attached Photovoltaic) refers to a photovoltaic power generation system attached to a building, also known as an "installation" solar photovoltaic building. BAPVs are usually installed with simple brackets and can be retrofitted at a later stage without changing the appearance of the building and without conflict with the original function of the building.
5) The application forms of BIPV include photovoltaic roofs, photovoltaic curtain walls, photovoltaic sunshades, photovoltaic carports, photovoltaic platforms, etc., among which photovoltaic roofs and photovoltaic curtain walls are the two main subdivisions. The photovoltaic curtain wall is a curtain wall that combines the traditional curtain wall and photovoltaic power generation functions, and the photovoltaic roof is a roof with load-bearing thermal insulation and waterproof functions, and superimposed solar panels.
6) Since the development of the photovoltaic industry, its technical route can be divided into three generations. The first generation is crystalline silicon photovoltaics represented by monocrystalline silicon and polycrystalline silicon. The second generation is thin-film photovoltaics represented by amorphous silicon, cadmium telluride (CDTE), copper indium gallium selenide (CIGS) and gallium arsenide (Gaas). The third generation is an emerging photovoltaic technology represented by dye-sensitized solar cells (DSSCs), organic photovoltaics (OPVs), quantum dot solar cells (QDSCs) and perovskite solar cells (PSCS).
About light and heat
1) Solar thermal power generation is a technology that uses solar energy to convert light energy into heat energy and then use heat energy to generate electricity. Solar thermal power generation (CSP) technology with combined thermal energy storage (TES) is one of the most promising power generation technologies in the renewable energy system of the future. It can efficiently use abundant but intermittent solar energy to provide people with stable, dispatchable and low-cost electricity.
2) Experts said that compared with new energy sources such as wind power and photovoltaics, the power output of CSP power generation, which is also clean energy, is more stable, and has the function of peak shaving and energy storage, which has a unique role in the new power system. With the increase of policy support, it is expected to usher in a new stage of large-scale development.
3) Dongguan** pointed out that as of 2022, the cumulative installed capacity of CSP in China has reached 588MW, accounting for 83%, according to the projects that have been announced, according to the statistics of grid connection before the end of 2024, the cumulative installed capacity of CSP in China is expected to reach 3948MW by the end of 2024, and the average annual compound growth rate from 2022 to 2024 is expected to reach 159%.
Information on new technologies
4.1 TOPCon PV modules.
1) In a recent research report, China Securities Construction Investment Co., Ltd. said that as the main representative of new photovoltaic technology, TOPCON photovoltaic modules have been cultivated in the market for a year, and downstream customers have a full understanding of its cost performance. At the beginning of 2023, the demand for TOPCon will show a blowout trend, and the supply of the industrial chain will not be able to meet all the needs of the industry in a short period of time, resulting in TOPCon products will maintain a high prosperity for a long time in the future.
2) Since the beginning of this year, the proportion of N-type in the bidding of photovoltaic projects has increased rapidly, and the proportion of N-type in the module bidding of central state-owned enterprises represented by and China Nuclear Energy has reached 30%-40%, which is much higher than the proportion of about 10% last year, and the demand for TOPCon in the industry has gradually entered a blowout growth stage.
3) According to the statistics of China Securities Construction Investment, the effective supply of TOPCon in the industry in 2023 will be about 120GW, while the total demand of the industry is expected to reach more than 400GW, and the supply of TOPCon is relatively scarce.
4.2 HJT batteries.
1) Tianfeng** released a research report saying that HJT cell efficiency and module power are relatively higher, and it is more likely to become the mainstream in the future. Compared with single-sided poly, HJT has a higher conversion efficiency than the TOPCON theory. HJT benefits from the advantages of structure and material (heterojunction, N-type silicon wafers), and the theoretical ultimate conversion efficiency is 285%, significantly higher than PERC's 245%, which is also higher than the 27 of single-sided polytopcon1%, which is close to 28 of the double-sided topcon7%。
2) HJT is also relatively more efficient than TOPCon laboratories and potential mass production. The highest conversion efficiency of HJT battery laboratory has reached 2681%, more than Topcon's 264%；At the same time, due to factors such as high bifaciality, low attenuation rate, low temperature coefficient and good weak light effect, HJT module power is higher than TOPCon, and is expected to enjoy a higher module sales premium.
3) HJT's market share is expected to reach more than 20% by 2025.
The current state of the industry and relevant statistics
5.1 2022.
1) Data from China Photovoltaic Industry Association: In 2022, the scale of the photovoltaic industry will continue to grow, and the output of polysilicon, silicon wafers, cells, and modules will reach 82 respectively70,000 tons, 357 GW, 318 GW, 2887 GW, a year-on-year increase of more than 55%. The total output value of the industry exceeded 14 trillion yuan.
2) In 2022, the photovoltaic sector will achieve an operating income of 97082.8 billion yuan, a year-on-year increase of 8015%, and the net profit attributable to the parent company in 2022 will be 11461.3 billion yuan, a year-on-year increase of 12264%。
3) As of the end of December 2022, China's cumulative installed solar power generation capacity is about 3900 million kilowatts. The "2023 National Electricity Supply and Demand Situation Analysis Report" released by the China Electricity Council predicts that the installed capacity of grid-connected solar power generation in China will be 4About 900 million kilowatts.
3) In 2022, the construction of large domestic photovoltaic bases and distributed photovoltaic applications will increase steadily, with more than 87 GW of new domestic photovoltaic installed capacity, a year-on-year increase of 593%。Among them, 36 new centralized photovoltaics3 GW, up 41 percent year-on-year8%；Distributed PV added 511 GW, up 74 percent year-on-year5%。
4) In terms of exports, the total export value of photovoltaic products (silicon wafers, cells, modules) in 2022 exceeded US$51.2 billion, a year-on-year increase of 803%, PV module exports exceeded 153 GW, up 55% year-on-year8%, effectively supporting the growth of the domestic and foreign photovoltaic markets and the global demand for new energy. It has become a bright spot in foreign trade exports. From the perspective of regional distribution of exports, Europe will still be the most important export market in 2022, accounting for about 46% of total exports, and the proportion will continue to increase.
5.2 In 2023.
1) Wind data shows that 84 photovoltaic listed companies achieved a total operating income of 11,181 in the first three quarters2.7 billion yuan, compared with 9196 in the same period last year0 billion yuan, a year-on-year increase of 2159%；The net profit was 12258.1 billion yuan, compared with 1002 in the same period last year6.2 billion yuan, a year-on-year increase of 2226%
2) In the first three quarters of 2023, the country's newly installed photovoltaic capacity was 128.94 million kilowatts, a year-on-year increase of 145%, including 61.8 million kilowatts of centralized photovoltaic and 67.14 million kilowatts of distributed photovoltaic. By the end of September 2023, the installed capacity of photovoltaic power generation in the country will reach 5200 million kilowatts, of which 2 are centralized photovoltaics9.5 billion kilowatts, distributed photovoltaic 22.5 billion kilowatts. In the first three quarters of 2023, the country's photovoltaic power generation capacity was 436.9 billion kWh, a year-on-year increase of 33%.
3) On January 5, according to CCTV News, data from the State Intellectual Property Office showed that the current global patent applications for solar cells in China are 12640,000 pieces, ranking first in the world, with strong innovation strength.
4) According to the latest data disclosed by the National Energy Administration, from January to November, China's new photovoltaic installed capacity was 16388GW, a year-on-year increase of 1494%, nearly double last year and a record high.
Industry trends and outlook
1) According to the National Energy Administration, the neutral expectation of new global PV capacity in 2024 is expected to be 474GW, a year-on-year increase of 16%, compared with the growth rate of 59% in 2023, the growth rate is significantly slowed.
2) In 2023, the photovoltaic industry will continue to involute, with fierce competition and a pattern that is not yet clear. Under the trend of price reduction, the photovoltaic industry will inevitably face fierce competition and reshuffle, which is also a key stage for the photovoltaic industry to move towards mainstream energy.
3) As a major producer, application and exporter of photovoltaic products, China has an overwhelming advantage in production capacity and output in key fields such as polysilicon, silicon wafers, cells, and modules, controlling more than 85% of global output, and mastering the key technologies of the industry. Therefore, the rapid development of global solar energy, coupled with the urgent need to achieve the dual carbon goals, has brought unprecedented opportunities for Chinese photovoltaic companies.
4) The bottleneck of the future development of the photovoltaic industry is not in the manufacturing of photovoltaic products, but in the latter few items of generation, transmission, distribution and transmission in the entire power system. ”
5) The CITIC ** research report pointed out that in the case of PV overcapacity intensifying supply-side competition, the profitability of the industrial chain may face a significant contraction, and the industry will enter a new round of reshuffle. In the face of the industry's accelerated survival of the fittest, the leading manufacturers in the industrial chain may rely on the advantages of technology, cost, production capacity and market layout, as well as strong financial strength and hematopoietic ability, and are expected to achieve steady and far-reaching progress and pass through the cycle. At the same time, driven by market orientation and endogenous enterprises, it is expected that leading manufacturers will continue to promote technological upgrading, increase efficiency and reduce costs, and further strengthen their competitiveness and consolidate their leading position during the industry reshuffle period. As the industrial chain inventory, ** and profit fundamentals gradually bottom out, the valuation of the sector currently at the bottom is expected to usher in mean reversion, and high-quality leaders in inverters, auxiliary materials, integration and equipment links are recommended.
Relevant information of listed companies
Involved in the concept of public companies
There are 350 in total, including 249 on the main boards of Shanghai and Shenzhen, 75 on the ChiNext Board, and 26 on the Science and Technology Innovation Board.
7.2. The situation of leading enterprises.
Top 10 by market capitalization (As of January 8, 2024).
LONGi Green Energy (163.7 billion), Sungrow Power Supply (119.3 billion), Tongwei (107.8 billion), JinkoSolar (83.5 billion), JA Solar (63.4 billion), Follett (58.8 billion), Trina Solar (57.8 billion), TCL Zhonghuan (56.4 billion), Jingsheng Electromechanical (50.6 billion), Foster (43 billion).
To list the top 10 by revenue in the first three quarters of 2023
Tongwei (111.4 billion), LONGi Green Energy (94.1 billion), Trina Solar (81.1 billion), JA Solar (60 billion), TCL Zhonghuan (48.7 billion), Sungrow (46.4 billion), Chint Electric (42.6 billion), Risen Energy (28 billion), Aiko (22.6 billion), Foster (16.7 billion).
The top 10 major listed companies ranked according to the non-net profit deducted in the first three quarters of 2023
Tongwei (156.)400 million), LONGi Green Energy (115.100 million), Sungrow (70.800 million).
JA Solar (70.)300 million), TCL Zhonghuan (53100 million), Trina Solar (51200 million), Jingsheng Electromechanical (20700 million), Chint Electric (29800 million), Follett (19500 million), Aiko shares (18400 million).
7.3. Related investment ETF instruments.
PV ETF (515790). Top 10 heavy stocks of PV ETF (515790).
LONGi Green Energy, Sungrow, TCL Zhonghuan, Tongwei, TBEA, JA Solar, TCL Technology, Jingsheng Electromechanical, Trina Solar, Aiko Co., Ltd.
8 Medium- and long-term investment opportunities in the industry.
1) The photovoltaic industry continues to maintain a high degree of prosperity opportunities.
At present, after years of development, China's photovoltaic industry has a complete industrial chain, and its manufacturing capacity and market share rank first in the world. The photovoltaic industry is in the transition stage from the growth period to the mature stage, and under the trend of price reduction, the photovoltaic industry will face fierce competition and reshuffle, which is also a key stage for the photovoltaic industry to move towards mainstream energy. The industry believes that under the long-term demand to promote energy transition, the photovoltaic industry will continue to grow rapidly, and the photovoltaic industry will continue to expand the market space at a growth rate of at least 25%-30% per year in the next 3-5 years. The Pacific ** research report pointed out that the cyclical nature of the photovoltaic industry is more obvious, and it is currently in a new round of layout period. At present, the industry is at the bottom of the area, and the leading enterprises that can pass through the cycle will usher in a new round of growth. Such opportunities can be tracked through PV ETFs or leading industries such as LONGi Green Energy, Tongwei, JinkoSolar, and JA Solar.
2) Development opportunities for CSP.
On March 20, 2023, the National Energy Administration (NEA) issued the Notice of the General Department of the National Energy Administration on Matters Concerning Promoting the Large-scale Development of CSP. Dongguan** pointed out that as of 2022, the cumulative installed capacity of CSP in China has reached 588MW, accounting for 8% of the cumulative installed capacity of CSP in the world3%, according to the projects that have been announced, according to the statistics of grid connection before the end of 2024, the cumulative installed capacity of CSP in China is expected to reach 3948MW by the end of 2024, and the average annual compound growth rate from 2022 to 2024 is expected to reach 159%.