Text: Huaxia Energy Network
"108 pieces of 1 tile."
This was the price of photovoltaic panels 22 years ago. At that time, Gao Jifan, the founder and chairman of Trina Solar, had just devoted himself to the photovoltaic industry, and a group of 18 people went to Tibet to develop a photovoltaic power station, and the price at that time exceeded 100 yuan per watt. Now, after several industry cycles, the current price of PV modules has dropped to 0.6-0.7 yuan per watt.
In China, there are few industries that have been able to reduce costs by more than 90% in a decade like photovoltaics. In addition, solar energy-related technology has achieved a far lead in the world, completely changing the situation of "three heads outside" 20 years ago, and achieving today's "three world firsts".
"China's photovoltaic has made a 'proof question' to the world in 20 years." Looking back on the history of China's photovoltaic development, Zhong Baoshen, chairman of LONGi Green Energy, used such an excellent description when he read his "Letter to the Industry" on CCTV's "Dialogue" program.
However, the development of China's photovoltaic industry, which has achieved outstanding achievements, has not been smooth. Today's Chinese photovoltaic is once again in a deep crisis, and it is recognized that it is already at the "bottom of the fourth cycle". It has been nearly a year since the reshuffle of the industry, and the tragedy is beyond imagination, with at least eight photovoltaic manufacturers declaring bankruptcy and leaving the market in one month in September.
There has never been an industry that will "toss to death" like this. It is no wonder that Li Junfeng, executive director of the China Energy Research Society, said in the "Dialogue" program that many domestic industries have the problem of capacity involution, but in terms of price war, no one is more fierce than the photovoltaic industry. Involving yourself into the imbalance between supply and demand, and not making a penny, how did the photovoltaic industry become the "stupidest" one?
Even the leading companies at the poker table are not having a good time, and the data in the semi-annual report has become a miserable mark of "how cold is the winter" - if you don't count the revenue of overseas markets, it is likely that none of the companies will make money in 2024. Fierce competition and even vicious competition have made China's PV fall into an irrational market - "the more you sell, the more you lose".
How did China's PV come to this?
Since 2024, enough has been discussed about this topic. In the CCTV "Dialogue" program officially broadcast today (October 12), the heads of the seven major photovoltaic head companies rarely shared the same stage, and reached the following consensus in the collision: first, homogeneous competition; second, the self-discipline of enterprises and industries is insufficient; Third, the protection of intellectual property rights is not in place.
The seven entrepreneurs who "discussed on the same stage" are from Trina Solar, LONGi Green Energy, Tongwei Co., Ltd., Jinko Solar, GCL Group, TCL Zhonghuan, and Chint New Energy. As of October 11, the total market capitalization of these seven companies (or their listed companies) exceeded 400 billion. After a long period of market value shrinkage, they have all rebounded sharply recently, and many companies have returned to more than 100 billion. This gives some comfort to Chinese photovoltaic people, and also conveys hope and confidence.
"I think our 39 days have passed, and the next (industry climate) will not be colder than 39." Zhong Baoshen said frankly on the stage of "Dialogue". This represents the collective voice of China's photovoltaic entrepreneurs.
Although winter is cold, winter is also the best time to "strengthen the body" and seek development. How can Chinese PV companies survive the cold winter? Where do you look for faith? Let's look at the collision of ideas and flash wisdom of photovoltaic bigwigs!
"Everybody doesn't make money"
To sum up the biggest reality of the photovoltaic industry in one word, that is: losing money.
Companies in the PV sector have generally fallen into large losses in 2024, and the results of the ultra-low price competition of the past year are written on the books. In the first half of the year, only a few companies such as JinkoSolar and Trina Solar handed over a "report card" of profitability. In this regard, Li Xiande, chairman of JinkoSolar, said frankly, "Although we made a profit in the first half of the year, there is still a big gap from our own expectations. Jinko's net profit last year was 7.4 billion, and it has fallen sharply this year. ”
Liu Hanyuan, chairman of the board of directors of Tongwei Group, said, "If the annual report is still in the red, it will be the first loss for Tongwei in the 23 years since it was listed on the A-share market." [This cycle] is really scary. ”
Judging from the supply and demand situation of the entire industry, the losses of photovoltaic listed companies may continue for some time.
At present, China's domestic photovoltaic manufacturing capacity is conservatively estimated to exceed 1,000GW. So what about the demand in the Chinese market and even in the world? The brokerage's forecast is that by the end of 2024, the new installed capacity will increase by about 30%, and the corresponding module demand scale will be between 650~700GW; The China Photovoltaic Association is expected to be 470~520GW.
According to this calculation, it is conceivable how low the utilization rate of the above-mentioned 1,000GW capacity will be by the end of this year.
At the scene of "Dialogue", the consensus of the bigwigs is that the industry has fallen into a bubble, and the first reason is that the supply is strong and the demand is weak, and the supply and demand are seriously unbalanced.
Earlier, experts including Wang Bohua, honorary chairman of the Photovoltaic Industry Association, and Li Junfeng, executive director of the China Energy Research Society, were aware of the potential crisis of overcapacity. Li Junfeng mentioned a more essential reason - in the past three years, the photovoltaic industry has failed to "step on the brakes" in time in the inertia of rapid development.
Li Junfeng participated in the discussion at the scene of the "Dialogue" program
In fact, as a senior expert in the photovoltaic industry, Li Junfeng has reminded entrepreneurs more than once in the past few years, "Can you do less this year?" ”
In the fierce competition for dividends, the competitive thinking of entrepreneurs is often "go the way of others, so that others have no way out", which also leads to irrational low-price competition and cross-border competition. However, with the development of the industry and the change of policies, the market environment faced by enterprises has changed, and the development logic at this stage is also changing, but the blind expansion of industry capacity has not changed.
Li Junfeng said meaningfully at the scene of the "Dialogue", "In the past ten years, the photovoltaic industry has spent a lot of effort to solve the problem of "less" and "not enough", and it cannot meet the demand, so it will increase investment by the government and increase the volume and scale through technological progress. Nowadays, the market environment is different! The industry should learn to slow down. ”
But when the market environment requires companies to "slow down", entrepreneurs seem helpless. This is where it all begins.
Another reason for the PV crisis is that the bigwigs point to serious homogeneous competition.
Zhu Gongshan, Chairman of GCL Group, said, "In the past 20 years, the homogenization of products, models, and manufacturing has not been protected, resulting in too low a competitive threshold in the industry. ”
Zhong Baoshen, chairman of LONGi Green Energy, was at the scene of the "Dialogue" program
As for how to crack the homogeneous competition, LONGi may be one of the most vocal companies at the moment. In the third quarter of 2023, LONGi proposed to "fully bet on the BC technology roadmap", which stirred up thousands of waves in the industry. While most companies are still enjoying the TOPCon dividend, LONGi is trying to find a new "blue ocean" in another way.
Zhong Baoshen, chairman of LONGi Green Energy, thinks that "to get rid of homogenization, it is necessary to take the path of differentiated competition, which is what LONGi has been exploring." ”
In fact, LONGi did not stop capacity expansion, but chose to "lay out the largest production capacity on BC". "We will bring the BC II to market in the first quarter of 2025. Our second generation of BC is a differentiated product, and the current customer feedback and prices are within our expectations, hoping to eventually drive the improvement of business operations. Zhong Baoshen said.
"Self-discipline is the only way to get out of the cycle"
In the "Dialogue" program, Li Dongsheng sat with the other six bigwigs for the first time as the "chairman of TCL Central".
In the first half of this year, TCL Group's overall revenue increased by 28%, but its silicon wafer business (TCL Zhonghuan) was the most "lagging behind", falling by more than 50%. However, Li Dongsheng, based on his experience of many different manufacturing industry cycles, is not pessimistic about the current round of crisis.
"In such a difficult situation, I personally jumped down (to do PV) because I have firm confidence in the prospects of China's PV industry." Li Dongsheng said.
Li Dongsheng, chairman of TCL Central, was at the scene of the "Dialogue" program
Similar to photovoltaics, the panel industry where TCL Group and Huaxing Optoelectronics are located under Li Dongsheng has already experienced many rounds of cycles and crises. In the past few years, display panels have also been in a "supply oversupply" market state. Li Dongsheng said that the panel industry has slowly come out of the cycle through adjustment. After years of competition, the concentration of the entire industry is high, and there are fewer than 10 global players. ”
Regarding how to deal with the cycle, Li Dongsheng and several entrepreneurs agreed to "focus on" these four words: industry self-discipline.
Li Dongsheng reviewed the adjustment of the panel industry, "On the one hand, mergers and acquisitions have allowed some companies to strategically withdraw from the market; On the other hand, through industry self-discipline, enterprises can produce the products they need according to the needs of the market, so as to avoid irrational competition, and finally stabilize the overall business situation of the industry. ”
When it comes to how to boost confidence in photovoltaic development, Lu Chuan, chairman of Chint New Energy, wrote "industry self-discipline" on the answer board and said that the industry must rely on the self-discipline of enterprises in production capacity and operation to get out of the trough. "Industry self-discipline" should be understood at two levels:
First, enterprises should have a prediction of their own production behavior, "the more you sell, the more you lose" is definitely irrational, and the low bid price is also "voted" by the enterprise itself. In the future, enterprises should return to the grasp of the speed of expansion and the grasp of the pricing mechanism;
Secondly, in the case of forming a clear consensus among enterprises, the industry, including associations, competent departments, etc., can be a "pusher" to organize everyone to make some more practical guiding plans for capacity arrangement, market pricing, and enterprises to participate in the discussion.
"The problem is unavoidable, because we all want to get out of this cycle faster, not make it longer." Lu Chuan said.
Although it did not enter the discussion topic of the seven bigwigs, a very urgent question is: when will the merger and reorganization really be launched, and "whether to continue to cover the backward production capacity"?
In the previous two reports, "Photovoltaic Reshuffle is Difficult: Who is "Continuing Life" for Backward Production Capacity" and "Reflecting on the Photovoltaic Investment Dilemma: "The Throttle" is Too Fast, It's Time to Step on the Brakes", Huaxia Energy Network has made some discussions on this issue - the rapid progress of photovoltaic in the past three years is not unrelated to the excessive investment of local governments.
When the profitability of the industry is strong, there is no capacity and is willing to take the initiative to withdraw; When entering the reshuffle period, serious losses, and no hope of IPO, the problems of unfinished projects, corporate debts, and homogeneous competition are exposed, and it is time for backward production capacity to be cleared, but there are still local governments to "cover up" local backward production capacity.
As early as the first half of the year, the China Photovoltaic Industry Association put forward clear opinions for the rectification of the industry, "the orderly development of the photovoltaic industry must promote a better combination of an effective market and a promising government; Standardize and manage the local government's investment promotion policies, and establish a unified national market. ”
Therefore, in the future, the guidance and standardization of the central government will solve the problem of disorderly development of the industry to a large extent. Enterprises need self-discipline, industries need self-discipline, and local governments need self-discipline. The effective combination of these three forces can truly create a benign and healthy environment for the development of the industry.
"Attack what? Shou what? ”
Standing at a low point, photovoltaic companies have come to a critical moment to make a choice. Regarding the question of "how to develop in the cold winter", seven entrepreneurs talked about their "offensive and defensive philosophies".
Gao Jifan, chairman of Trina Solar, chose to "attack" without hesitation. He believes that when we are faced with any industry cycle or crisis, "no company should waste an opportunity in a crisis." ”
Gao Jifan, chairman of Trina Solar, was at the scene of the "Dialogue" program
At the bottom of the industry cycle, it is actually a "period of opportunity" for an enterprise to make itself stronger through reform and technological innovation. Not every enterprise can do it, but it is the only way for leading enterprises to step up to a higher level.
Li Xiande, chairman of JinkoSolar, said that the most urgent thing to do now is to preserve strength and "make full preparations for a longer cycle in the future." (On July 25 this year, Li Xiande reminded the industry in the company's official Weibo article, "Be prepared for the current cycle may become normal.") ）
Li Xiande, chairman of JinkoSolar, was on CCTV's "Dialogue" program
Li Xiande said that Jinko's future strategy is very clear - both offensive and defensive.
"In terms of offense, first, although Jinko's products have been sold to nearly 200 countries around the world, it still needs to expand into emerging markets. Second, Jinko is a promoter and practitioner of n-type TOPCon, and we plan to achieve a cell conversion efficiency of 26.5% in 2024, which I believe we will be able to achieve soon. Using R&D to ensure the leading position of our products has always been Jinko's most important strategy; From a defensive point of view, we have to make sure that there is a balance between operating rates, shipments and profitability. Li Xiande said.
Zhong Baoshen summarized LONGi's future development strategy as "both offensive and defensive". He said that the "attack" is reflected in the fact that in the second half of this year, LONGi will be the company with the largest investment in fixed assets in this field, continue to achieve differentiated development, continue to improve the technical level of the industry, and improve the technical standards of products. "Guarding" refers to keeping cash stable and financially sound in this cold winter, and not losing a lot of cash. At the same time, in the process of enterprise operation, measures such as streamlining administration, reducing costs and increasing efficiency, and saving costs have also been adopted.
Conclusion: Faith is in their hearts
It is rare for seven entrepreneurs to talk on the same stage, most of them are entrepreneurs who have acted as "pioneers" in the history of China's photovoltaic development, and have led enterprises through the cycle many times. Whether China's photovoltaic can get out of the darkest moment this time is on their shoulders, and hope is also on them.
Gao Jifan, who is well versed in the evolutionary philosophy of the photovoltaic industry, said that the photovoltaic industry has now entered the fourth round of cycle, and compared with the cold winter of the "double reversal" period, "photovoltaic people can remain relatively optimistic." This is because the leading enterprises in the industry have built their own set of "playing methods" that can go through the cycle through lessons and experience in the middle of the past cycle.
"Looking to the future, I firmly believe that everyone can definitely do it through the cycle. And we look back at the development history of Trina, after each cycle, the company will move to a higher height, not only in terms of scale, profitability, but also in terms of strategy. Gao Jifan said.
In addition, many entrepreneurs, including Li Dongsheng and Li Xiande, also gave a "prescription" for accelerating globalization.
China's photovoltaic industry has occupied an absolute leading and even monopolistic position in the world, but in the global environment of high trade barriers and huge anti-monopoly challenges in Europe and the United States, in addition to cultivating internal skills, enterprises can also find "opportunities in crisis" in response to the external challenges of the global market.
As Li Dongsheng said, "Now that the global economic pattern is reconstructed, the changes in market rules also emphasize the regionalization and localization of the economy. Therefore, in order for China's photovoltaic industry to continue to maintain its leading position in the world, we must change the old logic of only selling products, and establish our stronger industrial capabilities in the world, which can be integrated into the local economic system. China's PV must improve its globalization capabilities in order to achieve sustainable and healthy development. ”
After China's photovoltaic industry has achieved a leading position in technology and scale, the new foundation for future development will lie in the ability to globalize.
To borrow a sentence from Li Xiande's recently published article "The Ship Does Not Dock, the Shore Depends on the Boat" as the conclusion of this article: "If the world does not come, go to welcome the world; If the market does not come, it will create a market. Based on the world, allocate resources in the world, and build a global company. This is the sea of stars after China's photovoltaic has passed through the cold winter and broken the involution.