Photovoltaic Industry Enters The Era Of Parity

For two consecutive days, the state issued a document again emphasizing the importance of healthy, orderly and high-quality development of domestic photovoltaic industry.

      On March 11, the Ministry of industry and information technology issued the standard conditions for photovoltaic manufacturing industry (2021 Edition), which advocates strengthening technological innovation, improving product quality and reducing production costs, and puts forward requirements on capital, R & D, and capacity utilization rate of enterprises to expand production capacity; on March 12, the national development and Reform Commission, the Ministry of finance, the people's Bank of China, the China Banking and Insurance Regulatory Commission, and the State Energy Administration joined forces The circular on guiding and increasing financial support to promote the healthy and orderly development of wind power and photovoltaic power generation industry (hereinafter referred to as the notice) has been issued, which specifies that the financial institutions shall negotiate with renewable energy enterprises for extension or renewal of loans in accordance with the principle of commercialization, independently issue subsidy rights confirmation loans in accordance with the principles of marketization and legalization, and provide reasonable support for subsidy rights confirmation loans.

The above-mentioned documents, one to guide the photovoltaic industry manufacturing, the other to increase financial support, to drive the reasonable development of domestic photovoltaic industry from different levels.

Recently, the A-share photovoltaic sector ushered in a deep correction, the market's main funds to the industry's "imagination" and "reality" to make a profit to leave the market.

The so-called "imagination" is that under the goal of "carbon peaking, carbon neutralization", the photovoltaic industry is given high growth and high landscape growth space; while the so-called "reality" is that the demand expectation stimulates the expansion of production capacity. When the hot photovoltaic industry continues to expand in scale, the "disharmony" between the upstream and downstream of the industrial chain is also increasing.

In this context, the voice of high-quality, healthy and orderly development once again attracted the attention of the whole industry.

Policies continue to standardize industry development

"Although it came a little late, and its strength and scope are limited, the notice can indeed alleviate the cash flow crisis of defaulted enterprises to a certain extent." Lu Jinbiao, deputy director of the expert committee of China nonferrous metal silicon industry association, said in an interview with the reporter of the 21st century economic report.

As a bottleneck problem restricting the development of the new energy industry for a long time, the default of subsidies is regarded as a "persistent disease" and has a dull pain. According to Qin Haiyan, executive director and Secretary General of China Renewable Energy Society, the total demand for subsidies in China's renewable energy industry is about 300 billion yuan by the end of 2020, of which photovoltaic industry accounts for about 125 billion yuan.

A senior new energy analyst told the 21st century economic report that "the circular makes it clear that some credit line support from banks can help the industry solve the default of subsidies, and this policy has very good guidance."

According to the notice, financial institutions negotiate with renewable energy enterprises to extend or renew loans in accordance with the principle of commercialization. For renewable energy enterprises with great short-term repayment pressure but promising future development, financial institutions can arrange loan extension, loan renewal or adjustment of repayment schedule and term according to the principle of risk control and on the basis of independent negotiation between banks and enterprises, and according to the actual and expected cash flow of the project.

The notice also made it clear that subsidies should be given priority and credit support should be further strengthened. According to the actual situation, enterprises voluntarily choose whether to take the initiative to convert into affordable projects. For those voluntarily converted to affordable projects, they can give priority to the allocation of funds, and the loan amount and loan interest rate can be determined through independent negotiation.

However, the circular is a framework financial support policy, and some measures also reflect the market-oriented thinking mode, but some potential problems need further discussion. "We should strengthen the efforts to confirm and clear the debts. It is better to clear the debts in a centralized way, and the funds should be put in place in batches, and different repayment periods should be determined according to the situation of funds in place." Lu Jinbiao pointed out.

In addition, through the issuance of green power certificate (hereinafter referred to as "green certificate"), the details of how to make up for the interest cost shared by enterprises need to be improved.

According to the notice, in order to alleviate the pressure of interest cost borne by enterprises, the relevant departments of the State shall, based on the loan contracts and other materials filed by enterprises, issue green power certificates of corresponding scale to enterprises with reference to confirmed receivable and uncollected financial subsidies, loan amount and loan interest rate, so as to allow enterprises to buy and sell through the index trading market.

In this regard, the aforementioned analysts told the 21st century economic reporter that although the loan interest can be made up for by issuing green certificates, it can certainly not be fully made up for. "This may affect the actual implementation of the policy, which remains to be seen." The person said.

What is worth affirming is that the release of the "notice" has released a positive signal from the policy level to solve the problem of subsidy arrears in the new energy industry.

Beware of industry overheating as a "stumbling block"

Recently, with the release of the notice on issues related to the development and construction of wind power and photovoltaic power generation in 2021 (Draft for comments), the intention of the policy to guide the new energy industry to improve the consumption capacity and industrial quality has become very obvious.

Compared with the version in 2020, the specification and conditions of photovoltaic manufacturing industry (2021 Edition) has changed in terms of capacity control, new project requirements and process technology. According to the 21st century economic report, in terms of production capacity, the standard conditions of photovoltaic manufacturing industry (2021 Edition) proposes to guide photovoltaic enterprises to reduce the photovoltaic manufacturing projects that simply expand the production capacity; in the new projects, the conversion rate of the efficiency of single polycrystalline cells and modules has been improved.

As the influence of grid pricing and subsidies on the prosperity of the photovoltaic industry in the past has gradually weakened, the downward trend of the cost of electricity per kilowatt hour will affect the demand for new installed photovoltaic capacity in the future. Guiding consumption, improving quality and maintaining health and order have become the main direction of government departments in formulating photovoltaic industry policies.

Since the outbreak of the epidemic last year, the domestic photovoltaic industry has experienced the test of resuming production and returning to work at the initial stage, and the heat has risen rapidly. The stimulation from the policy level has raised the industry's expectation of future installed capacity demand. The industry imagination space has leapt significantly, and the photovoltaic industry has ushered in the largest expansion in the past decade. In 2020, from silicon wafers, batteries to components, major enterprises have launched 10 billion production expansion plans, and hundreds of GW of production capacity will be launched rapidly.

The fact of nominal overcapacity is undeniable. Due to the high demand expectation, the supply-demand relationship between upstream and downstream of the industrial chain is not matched and uncoordinated, which has become a risk factor affecting the development of photovoltaic industry chain.

In the era of affordable access to the Internet, the price trend of photovoltaic industry chain is downward. However, in recent years, due to the continuous rise of upstream product prices, there has been a rare rise in the price of components.

According to the price data of pvinfolink, the average transaction price of domestic single polycrystalline components rose slightly this week. And the recently released project bid opening information shows that the component quotation has been improved.

According to the 21st century economic report, after the Spring Festival of the ox, the price of polycrystalline silicon materials and auxiliary materials has increased, which makes the cost pressure of downstream components increase sharply. Under the firm price, the rate of return on investment of terminal system is bound to be affected. The short-term demand of the industry has entered a game cycle. "At present, it seems that the rush to load on June 30 may not be as hot as before, so we can also observe the price differentiation between the first-line and the second-line component factories." Pvinfolink analysts predict that large manufacturers of first-line components will further reduce the operating rate, on the one hand, to control the inventory level, on the other hand, to curb the continuous rise of silicon materials and silicon wafers.

In fact, the imbalance of supply and demand in the upstream and downstream of the industrial chain also makes leading enterprises begin to realize the slowing down of the pace of production expansion.

Recently, Longji shares were exposed, Xianyang Longji, a subsidiary of Longji, caused the attention of the capital market. The 21st century economic report reporter noted that many netizens said on the social platform that there was a layoff incident in Xianyang longjile Photovoltaic Technology Co., Ltd., a subsidiary of Longji Co., Ltd., "there is no work in the factory.". In this regard, Longji shares also took the initiative to respond, saying that the layoffs were mainly due to the deployment of production line affected by the periodic supply of upstream raw and auxiliary materials. Longjile leaf in Xianyang carried out the adjustment of personnel work arrangement at the end of February, and gave deployment suggestions. At present, all of them have been properly settled

"Since last year, too much money has flowed into photovoltaic industry, resulting in a substantial expansion of silicon wafers and battery terminals. The price rise of polycrystalline silicon will restrain part of the impulse to expand production." An industry person told the 21st century economic reporter.