Source of this article: Times Finance Author: Zhang Tingwen
Image source: Picture Worm Creative
"For more than 20 years, China's photovoltaic has made a proof question: to prove that new energy is feasible - it can undertake the heavy responsibility of global energy transition; China's PV is reliable - we not only lead the development of technology, but also serve the world in a real way, and have won the trust of customers around the world. ”
Zhong Baoshen, chairman of LONGi Green Energy, wrote in a letter to China PV.
China's photovoltaic from "following" to "leading", while dominating the world and continuing to grow in installed capacity, the industry is still in turmoil, many companies have fallen into a loss-making situation, cross-border players have left a lot of chicken feathers in previous years, the price of the industrial chain has fallen again and again, the homogeneous competition of products is serious, and the dilemma of consumption still needs to be solved......
However, compared with involution, enterprises are more afraid of being thrown on the beach by the rolling tide of progress, and it is still difficult to survive.
On the evening of October 12, Zhong Baoshen, Li Dongsheng, Chairman of TCL Zhonghuan, Gao Jifan, Chairman of Trina Solar, Liu Hanyuan, Chairman of the Board of Directors of Tongwei Group, Lu Chuan, Chairman of Chint New Energy, Zhu Gongshan, Chairman of GCL Group, and Li Xiande, Chairman of Jinko Solar, gathered in the CCTV Finance "Dialogue" program, with the theme of "Believe in China's PV", to explore where is the confidence of China's PV.
Image source: "Dialogue" column group
Highly anticipated industry self-discipline and macro-control
At present, the production capacity of all links in the mainland photovoltaic industry chain accounts for more than 80% of the world's total, occupying a dominant position in the world. In the first half of 2024, the output of polysilicon, wafers, cells and modules in mainland China increased by more than 32% year-on-year. The new installed capacity of domestic PV was 102.5 GW, a year-on-year increase of 30.7%.
With the liberalization of the consumption red line to further increase the space for new energy consumption, the construction process of large base projects and power grids has accelerated, and policies to improve distributed access capacity are being studied and introduced one after another. With the support of various favorable factors, it is expected that the new installed capacity of PV in mainland China will remain high in 2024.
However, when the growth of the industry scale is in full swing, many photovoltaic companies have fallen into a loss-making situation, and photovoltaic module companies have fallen into a vicious circle of losing more when they sell.
This is closely related to the collapse of module prices. Recently, some companies quoted a low price of 0.64 yuan/watt in the N-type TOPCon bidding section, and InfoLink maintained its forecast that some radical companies temporarily gave up their profit demands for the sole purpose of receiving orders, and did not rule out that the overall price in October will fall below 0.7 yuan/watt, or even close to the price of 0.65 yuan/watt.
In this regard, Li Dongsheng believes that the entire industry market system can be said to be distorted or even collapsed. In terms of China business alone, no company is profitable, and the profit may come from other or overseas businesses. But it is not a good idea not to sell, (if) everyone produces and sells according to the needs of the market, the whole market will not have this kind of products below the cost price, which is an abnormal market phenomenon.
In the past few years, during the period of rapid development of China's photovoltaic industry, a large number of cross-border players have entered, and enterprises on the photovoltaic "table" have increased their weight, and the industry's production capacity has expanded rapidly. However, the industry's profiteering is no longer there, the heat has subsided, and many cross-border players have also chosen to leave the market, leaving behind the chicken feathers of supply and demand mismatch.
Liu Hanyuan is a cross-border player at the forefront of the industry, and he believes that "everyone wants to gain more market share in the competition in the industry, and the price will naturally go down." The price reduction is intensifying, and every link is basically losing money, so the more you sell, the more you lose, and the longer the industrial chain, the more you lose."
Along with fierce price competition, there is also competition for technology and capacity. At present, photovoltaic technology can be said to be a "hundred flowers blooming" :P-type, N-type, and perovskite ...... In the past two years, PV companies have swarmed from P-type to N-type, accelerating the elimination of backward production capacity, but asset impairment has squeezed their profits and exacerbated losses.
"It is an inevitable trend to eliminate uncompetitive production capacity, reduce the waste of social resources, and promote the agglomeration of head enterprises and end the scattered situation in the past." Gao Jifan said to Times Finance.
However, while accelerating the implementation of advantageous production capacity, the serious problem of homogenization cannot be ignored.
Zhu Gongshan believes that in the past 20 years, everyone has made the same design, homogenization of products, homogenization of models, homogenization of manufacturing, intellectual property rights are not protected, and the threshold for competition is low. There are too many participants in the photovoltaic industry, and it is not easy for any industry to form a consensus on self-disciplined behavior.
Lu Chuan pointed out that "industry self-discipline is divided into two levels, the industry is composed of enterprises, and the first thing is to return to the company's own grasp of the expansion speed and pricing mechanism." We may think that the module price is very low now, but the bidding price is also voted by the companies themselves. If you want to speed up the transition cycle, it is very important for each company to start with itself. ”
"Secondly, in the case that enterprises have a clearer consensus, industry associations, competent authorities, etc. can be the promoter to guide everyone. We cannot shy away from the fact that the process of realignment of the cycle may be more acute now than it has been in the past. But what we want is to get out of this cycle sooner, not make it longer. Lu Chuan said.
In the case of market regulation failure, macroeconomic regulation has been repeatedly called. In addition to Lu Chuan, Gao Jifan also said, "It is not enough to rely on the existing strength of the industry. We all want to try to change the situation, but now that the efficient market has actually become ineffective, we hope that the state can carry out overall planning and guidance for the photovoltaic industry. The combination of the state and the industry can change the existing situation, turn things around, and then build a new ten-year golden period for the photovoltaic industry. ”
At the bottom of the cycle, we can overcome many obstacles through thick and thin
"As far as the industry as a whole is concerned, it is indeed at a low point now," said Gao Jifan, who once led Trina Solar through three rounds of the industry's cycle, "After counting the past, the photovoltaic industry has entered the fourth round of cycle, and compared with the industry winter in 2012, the current situation is relatively better." I'm a firm believer that cycle crossing can definitely be done."
Cyclical fluctuations, nothing to fear. Facing the future, entrepreneurs are still ambitious.
"Almost all manufacturing industries experience cyclical fluctuations from oversupply to undersupply. I believe that as the industry grows, the magnitude of this fluctuation will become smaller and smaller. Let the market return to rationality, and we will not necessarily see the phenomenon of vicious competition." Zhu Gongshan said.
Zhong Baoshen has always been full of confidence in the photovoltaic industry, he believes that the track of the photovoltaic industry has not changed, because compared with the global energy transition and the current global competitiveness of photovoltaics, the future demand is very large. "In the face of the long development cycle and the huge photovoltaic demand in the future, we still have a lot to do, and there is still a lot to do."
After several rounds of development cycles, China's PV footprint has long spread all over the world, and in the process, it has accumulated rich experience in dealing with international trade barriers.
Since 2010, Chinese PV companies have been responding to the challenges of anti-dumping and countervailing duty investigations from various parties, and have successfully expanded their localized services to the international stage.
When new challenges in the international market are coming, Chinese photovoltaic companies have planned their layout in advance in United States, the Middle East and other places, and gradually built a business model with a high degree of integration of the global regional industrial chain, opening a new chapter in the globalization strategy.
In the face of the globalization 3.0 era, Li Dongsheng pointed out that in order for China's photovoltaic industry to continue to maintain its leading position in the world, it must change the concept of only selling products, and establish stronger industrial capabilities in the world and be able to integrate into the local economic system. In the future, China's photovoltaic industry must enhance its globalization capabilities in order to develop sustainably and healthily.
China's PV, which has established a dominant position in the world, must not rest on its laurels. Zhu Gongshan believes that "in the current market environment, I suggest that the whole industry's thinking, business model, management, application, and cooperation must be changed in order to grow." ”
Image source: "Dialogue" column group
At the bottom of the cycle, we can overcome many obstacles through thick and thin.
In the face of the current industry dilemma, the importance of win-win cooperation is self-evident. Gao Jifan said, "I firmly believe that only through cooperation can the entire industry go further." ”
Zhong Baoshen believes that in the photovoltaic ecosystem, cooperation is not an option, but a basic item. "Of course, there may be competition in some areas, and this is a normal phenomenon. But everyone should strive to find their own space, that is, differentiated competition. Everyone is looking for the greatest common divisor and the largest space for cooperation, and at the same time looking for a specific customer group according to their own advantages, forming a dislocation competition, which is actually competition, but the way of competition is changing. ”
Li Xiande further pointed out that it is also necessary to look at the degree and form of cooperation, if you only stay in the surface of the supply chain cooperation, it must be very easy. However, it is difficult for everyone to pursue the development of the depth of the industry, which must require a foundation of trust. In the current situation, everyone is willing to sit down and talk about promoting the healthy development of the industry, which is a good direction.
Image source: LONGi Green Energy Wang Huohuo/photo
Before the recording of the program, the photos of the seven photovoltaic executives waiting for the show had been spread in the circle of friends of the photovoltaic people. Everyone waiting for the scene represents an achievement that cannot be ignored in China's photovoltaic industry. From the blue wisps of the road, the ups and downs, to the moment of standing side by side, they have walked through the past and the glorious years with China Photovoltaic, and will continue to write the glorious future together. This is also an indispensable source of confidence for China's photovoltaic development in the future.