The photovoltaic manufacturing industry is facing an unprecedented tangle.
On the one hand, there is serious overcapacity, the industrial chain is still expanding frantically, enterprises in the industry are expanding their capacity on a large scale, and cross-border entry outside the industry is becoming more and more tragicOn the other hand, the old and new technology routes are alternated, and in the face of different new technology directions, how should photovoltaic manufacturing enterprises choose?
In addition, the United States and Europe manufacturing reshoring, India, Vietnam and other countries take the opportunity to increase the photovoltaic manufacturing industry, where is China's photovoltaic manufacturing industry going?
What is even more worrying is that although the silicon material photovoltaic industry chain has been gradually straightened out since the beginning of this year, and the industry has increased significantly, the capital market reflecting the industry barometer has gone against the grain, and the stock prices of most photovoltaic-related companies have fallen all the way, with the market value falling by more than half, and a few falling by three-quarters.
Is the photovoltaic industry brewing a storm and will experience a **?
Who will rise against the storm and become the new leader?Who will be ravaged by the storm?
The manufacturing overcapacity of the industry is becoming more and more serious, and the excess capacity in most links will exceed 50%. However, the expansion of the whole industry chain is still up and down, the industry is full of gunsmoke, and cross-border investment is like a carp crossing the river, flocking to itOvercapacity leads to excessive competition in the industry, and with the continuous downward pressure of the first line, will such excessive competition have a big impact on the industry?
(1) Investment is soaring all the way, why is the company crazy?
The photovoltaic industry has been warned of overcapacity for a long time, but under the leadership of leading enterprises, the pace of expansion of the photovoltaic industry has become more and more radical. According to incomplete statistics, in the first half of 2023, 60 photovoltaic companies will throw out financing plans of more than 200 billion yuan, among which Tongwei, Trina, TCL Zhonghuan, Jinko and JA Solar and other leading companies are investing tens of billions of yuan in expansion projects.
The industry is in full swing, and the outside of the industry is also fascinated. Affected by the global business cycle and the international environment, all walks of life are almost saturated, and some industries are even in a shrinking trend, and various industrial capitals are eager to seek new opportunities.
Under the dual carbon goal, the photovoltaic industry is at an opportunity, and the industry is optimistic both inside and outside, and more and more enterprises are pouring into the photovoltaic track. According to incomplete statistics in the industry, in 2022 alone, about 70 listed companies will enter the photovoltaic market across borders, and this trend will continue in 2023.
With the support of the dual carbon goal, photovoltaic will assume the main energy responsibility in the future, with huge development space, and the industrial track will become wider and longer, even as long as 40 years. The stable long-term demand of the photovoltaic industry is the underlying logic that supports the expansion of photovoltaic enterprises.
From the perspective of expansion structure, the recent new production capacity mainly revolves around new technology routes represented by TOPCon. For photovoltaic enterprises, this round of overcapacity is only a phased phenomenon, under the role of the market mechanism, backward production capacity will be eliminated in large numbers, and there will be vacancies on the supply side. Therefore, vigorously deploying advanced production capacity at this time is conducive to locking in the market space after the reshuffle in advance and consolidating the market share.
For cross-border capital, the growth space of its industry has peaked, and the zero-sum game between enterprises restricts the development of enterprises. In contrast, the photovoltaic industry is in the initial stage of the long-cycle track, which is the best foothold for industrial capital transfer.
(2) What is the outlook for the industry under pressure?
In the short term, the growth rate of supply and demand is unbalanced, and the market will have serious overcapacity. According to the principle of economics, in the case of no significant change in the demand curve, as the investment projects are gradually put into operation, the supply curve will continue to move to the right, and eventually lead to the continuous reduction of market equilibrium**, approaching or even lower than the cost line of enterprises.
The recent trend of the whole line of photovoltaic products has verified this assertion.
Taking polysilicon as an example, by the end of 2022, polysilicon has been soaring, reaching the 300 yuan kilogram mark, and "silicon is king" is prevalent for a while. With the continuous expansion of polysilicon production capacity and the significant increase in supply side, the price of polysilicon was cut in half from a high level, and the price of polysilicon fell all the way, once falling by more than 70%.
Although polysilicon has recovered slightly recently, this is due to the temporary contraction caused by the long construction and production period of polysilicon, and it is expected to drop to 50 yuan kg in the future as new production capacity is gradually put into production.
Figure 3: Silicon wafers** (meta-chips).
Source**: Industrial **.
Figure 4: Cell** (Yuan W).
Source**: Industrial **.
Figure 5: Component (meta w).
Source**: Industrial **.
With the decline in the first class, the profitability of photovoltaic manufacturing enterprises has been compressed. In order to recover some of the fixed costs, only when the ** is lower than the average variable cost, the company tends to stop production to reduce losses. Therefore, the supply curve of PV manufacturing enterprises is the part of the intersection of the marginal cost line and the average variable cost and above.
Under excessive competition, the market equilibrium** will fall to the average total cost of the industry and the average variable cost, and the average profitability of the industry will be negative. However, a negative industry average earnings level does not mean that all companies will be in the red.
For those enterprises with leading technology, efficient management and superior brand, the average total cost can be controlled below the market ** and achieve profitability.
For companies whose average total cost is above the market, short-term losses may turn into long-term losses and eventually exit the marketIf the cost reduction and efficiency increase are obvious, the short-term losses can also be reversed in the medium and long term, and the profits can be realized in the medium and long term.
It can be seen that in an overly competitive market environment, the key to the survival of an enterprise is its short-term cost and long-term cost.
Figure 6: PV supply curve.
In the short term, the industry involution caused by serious oversupply is likely to be long-term, and the "winter" of industry involution will not end in one or two years.
Enterprises with backward production capacity are characterized by weak financial strength, low brand reputation, slow technology updating, poor management efficiency, and high long-term costs, and it will be difficult to see the arrival of spring in the industry.
At a time when the industry is seriously involuted and technology iteration, photovoltaic companies are particularly entangled in whether they can bet on the correct technical route.
At present, the photovoltaic industry has ushered in a new round of technological change.
PERC technology, which has dominated the photovoltaic industry for several years, is about to give way to the new generation represented by N-type technology, but the new generation of technology is diverse, each with its own strengths and weaknessesIn the window period of new technology development, which companies will seize the opportunity to shake the pattern of the photovoltaic industry?
At present, the technical routes of the hot development of the photovoltaic industry mainly include N-type TOPCON, HJT, BC, and perovskites.
From the perspective of comprehensive cost, technical difficulty, conversion efficiency, etc., each technical route has its own advantages and disadvantages.
In the short term, due to the relative maturity of the technology, it seems that TopCon and HJT have a better chance of succeeding PERC.
Among them, the advantages of TOPCon are that the conversion efficiency is higher than that of HJT, the production line can be compatible with PERC, and the cost performance is higher than that of HJTThe advantage of HJT is that there are fewer production processes, the yield rate is higher than that of TOPCon, and the conversion efficiency can exceed 29% through multilayer technology.
In terms of the scale of landing capacity, photovoltaic manufacturers tend to bet on the clearer topcon. If HJT can speed up and reduce costs, and realize the industrialization of lamination technology as soon as possible, there will still be opportunities for overtaking TOPCon in corners in the future.
The conversion efficiency of BC and perovskite is higher than that of TOPCON and HJT. BC has the characteristics of "platform type", which can achieve higher conversion efficiency by stacking with other cell technologies, but its disadvantage is that the production process is complicated and the equipment cost is relatively high, but it is not excluded that individual enterprises have mastered the core technology, which can simplify the process flow and reduce manufacturing costs.
Compared with the current mainstream crystalline silicon cells, perovskite has a simple process flow, and the conversion efficiency can exceed 50% through tandem, which is revolutionary, but due to technical limitations, perovskite has poor stability and may not be industrialized on a large scale in the short term.
At present, some enterprises have laid out multiple technical routes at the same time, which diversifies risks, but also disperses resources and increases management difficulties. Most companies choose to "give it a go" and bet on what they think is the most promising technology route, although they can achieve specialized development, but once the route does not meet the expectations of reducing costs and increasing efficiency, the future will be relatively disadvantaged, and enterprises will pay a heavy price.
The long-term overcapacity and the different paths of superimposed technology upgrades will inevitably usher in a storm in the photovoltaic industry, causing the industry to become the most popular.
There have been at least three major developments in the development of the photovoltaic industry, and each time the entire industry will be hit hard, resulting in a large number of photovoltaic-related enterprises falling one after another. Will the future be **?How is it different from the first three?Will it usher in the darkest moment of the industry like the previous three times?
(1) Taking history as a mirror, what is the rise and fall?
The reason why the first three industries were tragic was mainly because the photovoltaic industry was not mature at that time, and the global market relied on various subsidies. When the export or policy environment changes, the demand shrinks suddenly, and a large amount of production capacity is difficult to digest, which will inevitably lead to the bankruptcy of photovoltaic enterprises.
The future industry will be due to the overheating of the supply side. Today, the photovoltaic industry is in a mature stage of development and has been able to break away from financial subsidies and achieve grid parity. At the same time, the industry is facing technological iteration, and the recent layout of photovoltaic companies is mainly anchored in advanced production capacity.
With the support of the dual carbon goal, the global photovoltaic end market demand will remain strong for a long time, even without policy support, the photovoltaic industry should be able to recover from the first carbon goal quickly. If the reform of the power system and mechanism is smoothly promoted, the grid-connected consumption of photovoltaic is no longer a bottleneck, and the blockage of the electricity price transmission mechanism is completely dredged, which will drive the photovoltaic industry to smooth out the possible future faster.
(2) At the moment of the storm, the pattern is reshaped
When polysilicon technology made GCL, monocrystalline silicon technology made LONGi, and PERC succeeded BSF, Tongwei, Aiko, Jinko and JA Solar gradually emerged. In the future, the industry is in the window period of n-type upper, will the pattern of the photovoltaic industry be reshaped?
Can small and medium-sized enterprises catch up?Can cross-border enterprises successfully transform?Can the position of leading enterprises be shaken?
The advantage of large enterprises lies in "big", but the shortcomings are also due to "big". For leading enterprises, they are stronger than small and medium-sized enterprises and cross-border enterprises in terms of capital chain, talent team and market influence, and their status seems to be difficult to shake. However, it is precisely because of the "big" that large enterprises need to withstand greater risks when betting on new technology routes. If the technical route is wrong, it will be difficult to recover the investment of tens of billions of yuan.
The comprehensive strength of small and medium-sized enterprises is weak, and it is difficult to compete with leading enterprises head-on. If you bet on a technical route like BC or HJT that is difficult to industrialize and recover investment in the short term, it is very easy to fall into the dilemma of shortage of funds. However, small and medium-sized enterprises have strong ability to correct deviations, have the courage to "gamble", and can go to the extreme on a certain technical route. At present, multiple lines are parallel, and the stacking technology is hot, and photovoltaic manufacturing enterprises are very entangled in the technical direction.
For cross-border enterprises, although the photovoltaic track has a bright future, the technical threshold is high, and it is difficult for the first to shake the pattern that has already been formed in the photovoltaic industry.
However, at present, it is the alternation of new and old technology routes, and on the new technology route, new and old enterprises are in the same running line, and cross-border enterprises do not have the burden of old production capacity, and entering the game is an opportunity.
However, cross-border enterprises in the photovoltaic industry have little brand power, no influence, low market recognition, and face greater risks.
The market of photovoltaic products is lower than the average cost of the industry is bound to be long-term, and the superposition of different technical route options will become the source of the industry storm, and the industry will be difficult to avoid.
With the gradual elimination and withdrawal of backward production capacity, the new technical route has come to the fore after fierce competition, for the enterprises in it, involution is not a short-term phenomenon, how to maintain sustainable development, invincible, has become a major matter of life and death in the industry.
We believe that 1) large enterprises choose a long-term optimistic technology direction with obvious advantages, control the debt ratio and cash flow, and do not blindly expand the scale, pave the way, and diversify, so they can continue to serve as the mainstay of the subdivided industry in the new round of development.
2) Small and medium-sized enterprises adhere to market segments, pay close attention to reducing costs and increasing efficiency, maintain the continuity of the capital chain, and become stronger by doing "fine", and are expected to become new leaders in the industry in the future.
3) Cross-border enterprises choose a good technical direction, stand at a new starting point, gather a top talent team, ensure long-term guarantee of funds, integrate into the industrial ecosystem as soon as possible, and gain market recognition, so that they can emerge and emerge in a new round of storms.