Many cross-border "chasing light" enterprises can't withstand the pressure and have cut or abandoned investment in related photovoltaic projects, and the market reshuffle is accelerating. Industry insiders said that on the whole, with the sharp downward fluctuations in prices in all links of the industrial chain and the gradual fading of corporate financing enthusiasm, the photovoltaic industry is ushering in a new round of downward cycle.
The PV industry is going through a downturn. According to the latest financial report data, in the first quarter of this year, the performance of many leading photovoltaic companies was under pressure, and the business situation of second- and third-tier companies was even more difficult. At the same time, many cross-border "chasing light" enterprises could not withstand the pressure and have reduced or abandoned investment in related photovoltaic projects, and the market reshuffle is accelerating.
Industry insiders said that on the whole, with the sharp downward fluctuations in prices in all links of the industrial chain and the gradual fading of corporate financing enthusiasm, the photovoltaic industry is ushering in a new round of downward cycle.
Overall profit margin compression
Affected by the new round of capacity reshuffle cycle in the photovoltaic industry, the profitability of many industrial chain enterprises has declined sharply, and the performance in 2023 will show a decline in revenue and net profit. In the first quarter of this year, the profitability has generally not improved significantly, and many leading photovoltaic companies have even suffered losses, for example, TCL Zhonghuan has achieved a net loss of 880 million yuan attributable to the parent company, and a number of photovoltaic industry chain enterprises, including Jingyuntong and Shuangliang Energy Conservation, have also suffered net losses.
Zhongyuan Securities released a research report saying that judging from the 2023 annual report disclosed by the photovoltaic industry and the report for the first quarter of this year, the oversupply in the industry stage has a significant impact on the statement side, especially in the first quarter of this year, the sharp decline in the price of photovoltaic products, the growth of asset impairment provisions and other factors continue to drag down the performance of the industry. Polysilicon, wafers, cells and photovoltaic modules, as well as leading companies, are facing declining performance or even losses, and the general profitability of enterprises is under pressure, accelerating the survival of the fittest.
The decline in the price of photovoltaic products is the main reason for the general decline in the performance of photovoltaic enterprises. It is understood that under the pressure of supply and demand imbalance, the overall price of the PV industry chain will fluctuate downward in 2023, especially since the fourth quarter of 2023, the bidding price of modules has repeatedly reached new lows. According to InfoLink data, polysilicon (polycrystalline dense material) prices will drop by about 70%, wafer and cell (PERC 182) prices will drop by about 60%, and module (PERC 182) prices will drop by about 50% in 2023.
Peng Peng, secretary-general of the China New Energy Power Investment and Financing Alliance, said in an interview with China Energy News that the current decline in the price of photovoltaic products is mainly due to changes in supply and demand, and it is expected that the price will be less likely to recover in the short term.
Price fluctuations are one of the cyclical manifestations of the PV industry. "This is true not only for photovoltaics, but also for all commodities, and when prices are high, everyone invests frantically, thinking that there is room for continued price increases. However, with the rapid expansion of production capacity, prices will fall, and the industry has entered the stage of reshuffling and clearing backward production capacity. However, the global demand for PV will be huge in the future, and the demand for new installations should make these capacities be digested quickly. Lin Boqiang, dean of the China Energy Policy Research Institute of Xiamen University, told the China Energy News.
Crossover players have stopped
It is worth noting that in the context of the overall profit compression of the photovoltaic industry chain, many cross-border enterprises have retreated in spite of difficulties, from the previous full expansion to rational contraction. For example, Lingda Co., Ltd. announced in March this year that it plans to terminate its investment in the construction of Tongling's 20GW high-efficiency photovoltaic cell industrial base project.
Coincidentally, Haiyuan Composites announced in the same month that it signed the "Termination Agreement" after friendly consultation with the People's Government of Quanjiao County, Anhui Province, decided to terminate the project cooperation, and transferred 100% of the equity of Chuzhou Saiwei Energy Technology Co., Ltd. to Zhejiang Aixu Solar Energy Technology Co., Ltd. at a price of 38 million yuan.
It is understood that in January 2023, Haiyuan Composite Materials signed an investment agreement with the People's Government of Quanjiao County, and Haiyuan Composite Materials plans to invest 8.023 billion yuan to build a 10GW TOPCon photovoltaic cell project (phase I), 5GW HJT ultra-efficient photovoltaic cells and a 3GW high-efficiency photovoltaic module project (phase II). This time, Haiyuan Composites announced the termination of the project.
In this regard, some analysts in the industry believe that it is expected that more photovoltaic projects may face unfinished this year and next year, and enterprises with lagging cost control capabilities and insufficient sales channels may be forced to withdraw from the market. "Under the current cycle, the profitability of enterprises in the photovoltaic industry chain is under pressure, and the number of new entrants will be reduced to a certain extent, while some enterprises that have stretched too long and broken capital chains are facing being eliminated." Lin Boqiang pointed out, "However, in the long run, there is still a big gap in the current production capacity of the photovoltaic industry for future demand, so there will still be new players entering the game in the future." ”
"After the price of photovoltaic products fell, many cross-border enterprises that wanted to do short-term took advantage of the trend to withdraw, and the industry set off a new round of elimination. However, after all, the photovoltaic industry is the main force to promote the 'dual carbon', and it is expected that new funds will gradually enter the entire industry. Peng Peng said.
Cultivate internal strength to enhance competitiveness
The brutal capacity elimination competition in the photovoltaic industry is gradually escalating. In the opinion of the interviewees, if enterprises want to survive in the fierce competition, they need to do a good job of internal skills and judge whether to expand according to their own market conditions.
"At present, photovoltaic industry chain enterprises still have to choose whether to produce with cash flow or temporarily stop production based on their own cash reserves." Peng Peng pointed out that with the elimination of backward production capacity, some enterprises with core competitiveness will stand out. The core competitiveness of photovoltaic enterprises is mainly reflected in technological progress, and at present, all enterprises are actively promoting a new generation of photovoltaic cell technology in order to seize the market highland, and show different ways of playing in the selection of technical routes.
It is worth noting that while the competition in the photovoltaic industry is intensifying and the reshuffle is accelerating, the new domestic photovoltaic installed capacity in March rarely showed signs of decline. According to the national power industry statistics released by the National Energy Administration from January to March, in the first three months of this year, 45.74GW of new photovoltaic capacity was installed. According to the previously released data from January to February, the new installed capacity of PV in March was 9.02GW, a year-on-year decrease of 32.13%. It is understood that this is at least the first time in the past three years that the monthly new installed capacity has decreased year-on-year.
The year-on-year decline in new PV installations in March has attracted market attention. But Peng Peng said that the decline in monthly installed capacity does not mean anything. "The new installed capacity of photovoltaic in the first quarter has increased compared with last year, and the core is that the new domestic photovoltaic installed capacity has reached the level of 200GW last year, and it is not easy to further achieve a substantial breakthrough on the basis of 200GW of new installed capacity this year. Therefore, it is expected that the number of new PV installations this year will be the same as last year, or increase slightly. ”
Lin Boqiang also believes that the year-on-year decline in new photovoltaic installations in March is temporary, and the new photovoltaic installations this year will not be much different from last year.
According to the forecast of the China Photovoltaic Industry Association, the new installed capacity of PV in mainland China in 2024 is conservatively estimated to be 190GW, lower than in 2023, and is expected to be 220GW in an optimistic scenario, which is basically the same as in 2023.
Original title: How can photovoltaic companies break through the "cycle curse"?
Text丨Reporter Yao Meijiao
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Editor丨Yan Zhiqiang