NEWS all "531 New Policies" to open the era of small profits overseas market or into a new direction of photovoltaic breakthrough

Editor's note: After the "531 New Policy", China's photovoltaic industry is facing practical problems such as overcapacity and low profits.  Under the new situation, Chinese photovoltaic enterprises have taken the initiative to "go out" and actively explore the way of growth under the "adversity", among which the development of overseas market is once again high expectations.  

"According to current situation analysis, the average utilization rate of silicon chip, battery and module will decline to 66.5%, 57.8% and 47.6% respectively in 2018.  In the second half of this year, the industry capacity utilization rate is likely to be even lower, and some enterprises focusing on international and domestic small and medium-sized markets will face production suspension and bankruptcy, leading to active restructuring and integration in the industry."  Wang Bohua, secretary general of China Photovoltaic Industry Association, said at the "2018 China Photovoltaic Leadership Summit".  

After the "531 New Policy", China's photovoltaic industry is facing overcapacity, low profits and other practical problems.  Under the new situation, Chinese photovoltaic enterprises have taken the initiative to "go out" and actively explore the way of growth under the "adversity", among which the development of overseas market is once again high expectations.  

The new situation gives rise to new requirements  

As a policy-guided industry, the impact of "531 New Deal" on photovoltaic enterprises is self-evident.  Wang Believes that in the development process of photovoltaic industry, the influence of policy will still exist for a long time.  

"At present, officials and a number of experts are expected that China's photovoltaic will fully enter the era of affordable Internet access in 2022, so 2018-2021 three years is particularly important, the policy environment will change, the impact will increase."  Wang Bohua reminds.  

Although the National Energy Administration has repeatedly stressed that the state will not waver in its support for the photovoltaic industry after the "531 New Deal", enterprises still have doubts.  

"If we comb through the previous development process, we will find that China's photovoltaic industry has accounted for half of the global market in only four years, which is a fundamental change."  Wang Bohua told reporters, "At this stage, we need to change the topic of how to develop the market before, and gradually change the former extensive development to refined development, from the fight scale, speed, price adjustment to fight quality, technology, efficiency.  This is a new requirement for the photovoltaic industry under the new situation."  

Wang Added: "The policy adjustment is just a signal, whether or not to introduce supplementary policies, the state regulation of photovoltaic development scale of the policy thinking will not change, subsidies are inevitable."  

Sun power supply chairman Cao Renxian said, in the market inferior overcapacity, the lack of efficient capacity, enterprises must practice internal skills, continue to promote technological innovation and progress, to make new efforts to reduce costs and increase efficiency.  

"The photovoltaic industry, as one of the few emerging industries in China that can participate in international competition at the same time and have a leading advantage in industrialization, has great development potential."  Wang Bohua said, "I believe that the New Deal will not blindly bad, the future good will appear alternately."  

Photovoltaic has entered the era of low profit  

In excess capacity, market pressure rose sharply under the circumstances, the recent major enterprises continue to price news one after another.  

Relevant personage in the industry revealed that at present, the average capacity utilization rate of small and medium-sized enterprises is only about 45%.  In order to reduce capacity, most enterprises choose to stop production periodical maintenance.  However, the analyst team of JIBAN previously said that factory overhaul operations are not effective in alleviating the situation of domestic overcapacity.  

Data from China Photovoltaic Industry Association show that the prices of major products in the four manufacturing links of the industry are all falling without exception, and price cuts as a market behavior may continue.  

Wang Bohua said that in the 10 years from 2007 to 2017, the price of photovoltaic modules and systems has dropped by more than 90%, and the current cost and price are still in the rapid decline range, and the situation is not optimistic.  From the first quarter of 2016 to the first quarter of 2018, component costs have decreased by more than 15%.  "Monocrystalline silicon wafer prices have fallen more than 30 per cent in the first half of this year and downstream prices are also falling sharply."  

As prices continue to fall, profits naturally become difficult.  After the statistics of 20 photovoltaic listed companies, Wang Bohua came to the conclusion that "the photovoltaic industry has entered the era of low profit".  Statistics show that more than half of last year's net profit of photovoltaic enterprises declined.  In the first quarter of this year, net profits of 13 out of 20 companies continued to decline.  Component companies are in a particularly tough spot, with net margins falling below 1 per cent.  

"The second half could be even harsher.  On the one hand, due to the current market conditions, price pressure will continue, on the other hand, upstream and auxiliary materials, auxiliary materials are also in the price, component companies will be squeezed at both ends, very difficult."  "Wang said.  

Qu Xiaohua, chairman of Atsi Solar Power Group, believes that enterprises should take the road suitable for their own development in view of their own situation.  "We have always maintained a steady development model and tried our best to ensure a relative balance between supply and demand to maintain a profit of around 3 percent."  

Overseas market is expected  

After the introduction of the "531 New Deal", experts and research institutions began to re-forecast this year's installed capacity.  Wang also released his latest forecast, "About 30GW of new aircraft will be installed in China in 2018", which is not much different from his previous estimate.  

More than two months ago, when foreign research institutions forecast the value of 65GW, or even 70GW, Wang Bohua gave the prediction that "China's installed capacity will decline by 20%-40% this year".  After the introduction of the "531 New Deal", the estimate of 30GW is exactly the result of the market shrinking by 40%.  "Unfortunately, we were right. In fact, no one wants to see the photovoltaic industry go down."  "The 30GW estimate only includes the subsidy indicator," Wang said. "After all, the specific unsubsidized part cannot be measured."  

From January to May this year, China installed 13-14GW of new pv installations, according to the China Pv Industry Association.  "If there is no accident, the new installed capacity in June will be between 6-10GW," Wang predicted.  So, only in the first half of 2018, the number of new photovoltaic installations accounted for 2/3 of the total, and the domestic market shrank seriously in the second half of 2018.  So most companies are pinning their hopes on overseas markets.  

According to the export data of China Customs in the first quarter, the export volume of photovoltaic products showed a growing trend, with a year-on-year increase of 16.8%. It is expected that the export of photovoltaic industry will maintain an upward trend in 2018.  At the same time, foreign research institutions have updated the global photovoltaic installed capacity forecast results.  Solar Power Europe, GTM Research, Energy Trend and IHS have only reduced capacity by 5-8GW, leaving the total at around 100GW.  

Li Junfeng, chairman of the Renewable Energy Committee of the China Energy Research Society, also believes that the overseas market can be expected.  "In the long term, global installed capacity is still expected to average more than 100GW per year over the 12-year period from 2018 to 2030, with an optimistic forecast of 150GW."  

"Therefore, it is very important to actively expand overseas emerging markets to help bring more production capacity abroad."  Shi Dinghuan, former counsellor of The State Council, told reporters.