How serious is overcapacity in the PV industry? Europeans use solar panels as garden fences

Finance Associated Press, April 2 (edited by Xiaoxiang) The domestic photovoltaic industry has been seriously "involuted" in the recent stage, and life is generally sad, and the market value of LONGi Green Energy, as the world's largest monocrystalline silicon manufacturer, has evaporated nearly 400 billion yuan from the peak. In fact, at a time when the global photovoltaic industry is becoming saturated and prices are becoming increasingly involuted, similar "cold winter" scenes have abounded.

In Europe, as solar panels fall all the way to the "cabbage price", many Europeans have even used them as garden fences......

While this practice of erecting solar panels captures much less sunlight and electricity than when used as a roof, some households that have installed solar panels have posted on social media, saving a lot of high labor and scaffolding costs.

Behind this, the price of solar panels, which has fallen to about 1/10 of more than ten years ago, is undoubtedly the ultimate "reliance" for them to be able to lay such a large area.

Jenny Chase, principal solar analyst at BloombergNEF, said, "People are able to do this because solar panels are so cheap these days that they can put solar panels anywhere." Since installation costs – labor, scaffolding costs, make up the vast majority of the cost of installing a rooftop PV system, it makes sense to do so. ”

Martin Brough, head of climate research at BNP Paribas Exane, said: "If you have a place to install a lot of solar panels, even if they are not perfectly aligned with the sun, then why go for a wooden fence when the solar panels themselves are incredibly cheap, but the cost of installation and siting are constraints...... You'll want to do it yourself."

By the end of March, the global price of solar panels had fallen to about 11 cents/watt, half of what it was at the same time last year, according to a set of industry data. Compared with the price of more than US$1 per watt in 2011-2012, it has completely fallen to the "price of cabbage".

As for the reason for such a huge drop in prices, it is undoubtedly related to the severe overcapacity experienced by the global PV market in the past few years.

How serious is overcapacity in the global PV industry?

The International Energy Agency (IEA) estimates that by the end of this year, the global supply of solar panels will reach 1,100 gigawatts, about three times the current demand estimate, and overcapacity is becoming more apparent.

Domestic investors who are concerned about the challenges facing the PV industry are no strangers to it.

Last month, in response to rumors of layoffs from the outside world, LONGi, as a leading enterprise in the industry, responded that the current photovoltaic industry is facing a complex internal and external competitive environment, and in order to cope with market changes and improve organizational efficiency, the company has optimized the structure of relevant positions. The company is expected to adjust the proportion of personnel adjustment about 5% of the total number of employees.

As early as May 2023, during the Shanghai SNEC Photovoltaic Exhibition, some industry executives predicted that more than half of the photovoltaic companies would be eliminated in the future.

And now in Europe, many industry executives have warned that the PV industry has been plagued by a wave of unemployment, bankruptcies and bankruptcies in recent months, and many troubles are looming.

The European Commission has said it will commit to "assessing all evidence of alleged unfair practices" and improving access to EU funding for solar panel manufacturers, according to a draft plan seen by European media, which will be signed by EU energy ministers and industry groups on April 15. However, the move is still unlikely to please European companies.

Alessandro Barin, chief executive of Italian manufacturer FuturaSun, said boxes of its solar panels were stuck in ports and warehouses even after one of its factories was shut down for three weeks due to the Lunar New Year holiday. FuturaSun manufactures solar panels in China and sells them to Europe.

Barin noted that if the price of solar panels continues to fall below the "red line" of 15 cents per watt, the company is unlikely to seriously consider investing in production projects in Europe. "You can't make an investment decision when the profit is so small that you can't pay anything. ”

Barin also said that without more support from the European Union, FuturaSun's planned plant near Venice will only be a small "megawatt" plant, rather than a "gigawatt" production base of global significance.

The European Solar Manufacturing Council warned in February that European solar panel manufacturers would soon shut down production if emergency assistance was not provided.

This follows Norway's REC Group having closed its plant for polysilicon, a key raw material for solar panels, in November, and Meyer Burger Technology, a Swiss company, said it would close a solar panel plant in Germany and shift its focus to the United States. The plant is one of the largest solar panel factories in Europe.

(Finance Associated Press Xiaoxiang)