Reading history makes people wise, and it is also true for companies and industries. From year to year, the 3-year expansion plan for the Single Crystal Long Long Co., Ltd. will be released, which will lead people's attention to the photovoltaic industry. In 2017, the photovoltaic industry was hot and photovoltaic companies chased you to expand production capacity.
For this round of business capacity expansion, photovoltaic industry sources point to the 630 rush to install stimulation and photovoltaic giants fight for market share. It is worth noting that the “Great Leap Forward†picture of photovoltaic capacity from 2017 to the present is quite similar to that of 2007 and 2008. However, the disorderly expansion of 10 years ago led to the decline of many PV companies. This expansion has taken 10 years. What changed before? Whether the history of overcapacity will be repeated will cause the industry to think deeply.
Productivity "Great Leap Forward"
Photovoltaic companies are in a contest of capacity expansion.
Recently, Longji announced a three-year plan for its capacity expansion strategy. By the end of 2017, with a silicon wafer production capacity of 15GW, it will strive to achieve 28GW of monocrystalline silicon wafer production capacity by the end of 2018 and 45GW by the end of 2020. According to this plan, the capacity increase this year will be as high as 87%.
Another monocrystalline silicon giant Zhonghuan Co., Ltd. added 5.8 GW of single-crystal silicon capacity plan in September 2017. After the addition, Central's shares will achieve 23 GW of monocrystalline silicon capacity by the end of 2019, and according to the Central It is hoped that the senior executives will disclose to the China Times reporter that the time point in 2019 is to leave a margin for the project, mainly to grab 23GW capacity at the end of 2018.
However, it is not difficult to find from the comparison of figures that Longji and Zhonghuan have no balance in capacity expansion, and both will be the key year for capacity expansion this year. Monocrystalline silicon expansion only opened up the corner of the expansion of the photovoltaic industry. According to data from the China Photovoltaic Industry Association, newly installed domestic PV installations in 2017 refreshed the historical record of 34.53GW in 2016. The domestic market added 53GW, an increase of 53.6% year-on-year, including many industrial chains such as polysilicon, silicon wafers, and solar cells. The increase in output of the products is in a rising trend.
In addition to the Longji and Zhonghuan shares in the monocrystalline silicon field to increase production, the expansion of polysilicon field also did not give way. Among them, Tongwei's generous investment is very eye-catching.
The reporter stalked through the announcement of Tongwei Stock Co., Ltd. In 2017, it spent a total of 34.14 billion yuan to overwhelm the photovoltaic industry in two ways: self-built photovoltaic projects and jointly-built photovoltaic projects, which exceeded its revenue of 20.684 billion yuan in 2016. In 2016 and 2017, Tongwei Stock Co., Ltd. raised nearly 10 billion yuan by issuing bonds, restructuring assets, and divesting assets.
According to the announcement, Tongwei shares only two 100,000 tons of polysilicon projects in Baotou and Leshan, plus the existing 20,000 tons of production capacity. After the completion of the project, Tongwei’s polysilicon production capacity will surpass that of GCL-Poly to rank first in the world.
In fact, in addition to the above three typical companies, many PV companies, including GCL-Poly, Trina Solar, Zhonglai Co., and Artes, have also entered this wave of PV industry expansion.
Grab stimulus
This wave of photovoltaic enterprise capacity expansion is closely related to the "630 rush to install" stimulus.
On December 28, 2016, the National Development and Reform Commission sub-resources area lowered the benchmark on-grid tariff of photovoltaic power plants in 2017, and stated that in the future, the on-grid tariff of photovoltaic power generation benchmarks will be tentatively adjusted once a year. According to the regulations, the photovoltaic power generation projects that were filed before 2017 and incorporated into the fiscal subsidies of previous years and were put into operation before June 30, 2017 will be subject to the implementation of the benchmark PV power-grid tariff and subsidy standards for 2016.
For the 2017 and 2016 photovoltaic power generation benchmark on-grid tariffs, it can be seen that after January 1, 2017, the benchmarked grid-connected electricity prices for newly-built photovoltaic power plants in the first to third-tier resource regions were adjusted to 0.65 yuan, 0.75 yuan, and 0.85 yuan per kilowatt-hour respectively. Yuan, compared with 2016, the price drop was 18.75%, 14.77%, and 13.27%, respectively.
In order to enjoy the higher PV electricity prices in 2016, PV companies have completed construction and put them into operation before June 30th. According to data from the National Energy Administration, the installed capacity of new photovoltaic power generation in the first half of 2017 was 24.4 GW, which was more than 22.5 GW in the same period of last year.
"This expansion saw the stimulating effect of prices in 630 in 2017, coupled with the explosive investment of private enterprises in distributed and poverty-stricken photovoltaics, which led to the rapid growth of domestic photovoltaics, the full operation of equipment enterprises, and even the price increase in excess of supply. Xue Jing, director of the Information Department of the China Electricity Council, said in an interview with a reporter from China Times.
For this round of expansion of production capacity, industry sources told reporters, "In the downstream applications, the domestic newly installed capacity accounts for more than 50% of the world, and the installed investment costs, power generation costs only 10% 10 years ago, China has become the world's largest The countries that consume solar photovoltaic power generation are completely different from the situation where the two were out of the market 10 years ago (outside the technology and outside the market).â€
In addition, a number of industry sources told reporters that expansion of photovoltaic companies is also expanding the scale, in order to seize more market share.
Eliminators in the old bubble
The history is always surprisingly similar. From 2007 to 2008, domestic photovoltaic companies began to experience “bubbles†after capacity expansion, and the subsequent overcapacity superimposed “two out†double investigations. Many photovoltaic giants’ capital chains were in an emergency and did not hide. After a period of cyclical retreat, it was reorganized and even went bankrupt.
Just like the status of crude oil in the entire petrochemical industry, as the source of the entire photovoltaic industry, the impact of polysilicon materials on the photovoltaic industry can be described as a mobilization of the whole body. In 2009, polysilicon was listed as an excess capacity industry, which was due to the large expansion of the previous PV in just a few years.
According to public data, China's polysilicon production has soared from 60 tons in 2005 to 287 tons, 1156 tons, and 4,000 tons in 2006-2008, respectively, and the rate of increase in production has been doubled.
The increase in output from arrogance and enthusiasm has also led PV giants to reflect on this. According to media reports, Shi Zhengrong, chairman of one of the former PV giants, Wuxi Suntech, publicly stated in 2007 that “photovoltaic foam†has already emerged. Since polysilicon raw materials all rely on imports, China’s photovoltaic industry “leaps forwardâ€.
After the outbreak of the financial crisis in 2008, the export of photovoltaic products in China was hit by multinational trade, and the price of polysilicon fell from the top of the tower. Before the price of polysilicon plummeted, many photovoltaic companies accumulated too much goods and foreign demand decreased. Many small and medium-sized manufacturers cut production or even stopped production. Chinese PV companies including Wuxi Suntech and Jiangxi Levy also suffered.
Since then, the domestic photovoltaic industry has gradually become sluggish. By 2012, PV companies listed in the United States began to suffer a total loss. As Europe and the United States successively conducted double investigations on Chinese PV products, including Suntech, LDK, and Yingli, these former photovoltaic giants successively broke out. . Nowadays, the names of the once famous Suntech Road in Wuxi and Saiwei Avenue in Jiangxi Xinyu have rarely been mentioned.
Overcapacity risks brewing?
The re-emergence of the expansion of photovoltaic production capacity will ignite the debate that will once again trigger a recurrence of historical tragedies in the industry.
“Before the expansion, whoever has the money will be able to participate, and from the brutal growth of the previous round, this expansion of photovoltaic companies has accumulated much of the industry, photovoltaic industry is maturing, and can not be directly compared with the previous round "A senior executive of a photovoltaic giant in China who has undergone a cyclical cycle in the photovoltaic industry told reporters.
Huachuang Securities analyst Wang Xiuqiang told reporters, "Because of the expansion of production capacity, especially polysilicon and silicon wafer volume, will inevitably lead to new changes in price declines. Under this trend, the Matthew effect has emerged, and low-cost, highly competitive companies have emerged. It will win, especially for PV giants like Longji, Tongwei, and GCL-Poly. The scale expansion is directly related to the company's future market layout. The giants' strategy is to eliminate their own market share by eliminating them. High-cost competitors."
This has also been corroborated by the company. “The development of the industry to a certain extent will inevitably lead to the formation of top market share. The companies behind can only account for 15%-20% of the market. This is the law of industry development. If there is no group, the industry can not tolerate it. With so many companies, the scale effect is very obvious.†One of the above-mentioned giant photovoltaic giants told reporters.
At present, the trend of this huddle has already emerged. Interestingly, this huddle is a cross-consortium between single crystal silicon and polysilicon mixers. Representatively, through the establishment of joint ventures, equity mergers and acquisitions, etc., the shares of GCL-China Central, Tongwei shares Longji shares.
Although companies are more optimistic, there are still voices about the risk of expansion of the photovoltaic industry. Wang Bohua, vice chairman and secretary-general of China Photovoltaic Industry Association, publicly suggested that the industry should be particularly vigilant against the problem of overheating of the industry. Whether it is polysilicon or the expansion of the battery is very powerful, but it must be considered according to the global market when expanding production. The expansion plan should be matched with technical preparations. “We must always pay attention to the market environment. We are not very happy to see the reappearance of the surplus PV industry around 2011,†said Wang Bohua.
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