Polaris solar PV net news: PV has a negligible proportion of power in China’s energy structure, PV overcapacity continues to be regarded as the core issue of the photovoltaic industry in the industry. The key breakthrough this contradiction is able to break through the PV industry relies on a “subsidy” and survival of the business model. China PV market did not “help not fools”, which required interaction between Government, enterprises and financial institutions and efforts.
Excess capacity: the revolution has not succeeded yet, comrades should still work hard
The evening of July 11, 2014, Denon 2014.5 opto-electronic publishing-annual announcements, the company expects first-half net profit attributable to shareholders of listed companies lost $ 50 million ~5500 million, compared to a loss of 6.39 million Yuan.
Company 2014.5 annual loss, of which non-recurring profit and loss effect on net profit of approximately-50,000 yuan. Preliminary effect of shrinking demand and overcapacity of the photovoltaic industry, the company was not optimistic.
CPIA data display in 2013, cells and modules in China link capacity reached 41GW and 42GW yield 25GW and 27.4GW respectively, capacity utilization is only 61% and 65%.
And in the current situation of polysilicon production, Shenzhou silicon industry in Inner Mongolia, Sichuan Yongxiang polysilicon companies, businesses started or ready to work, TBEA 12,000 tons in a State of full capacity, 2014 extension issue daqo new energy capacity doubled, extending from 6200 tons to 12,000 tons. Second half of the year, along with the Jiangsu zhongneng, TBEA, the Luoyang Zhonggui high-branch and daqo new energy polycrystalline silicon companies started shipping, polysilicon production will reach 70,000 to 80,000 tons, 2014 annual polysilicon production is expected to increase to 100%.
Solar Panel, solar solar energy have been in Canada Ontario build factory capacity of 330 megawatts by the end of 2013 increased from 530 megawatts on January 31, 2014. Jinko energy through the acquisition of Eagle’s nest and optical, add new 500 MW capacity, 500 megawatt wafer capacity, as well as 100 MW capacity. After Trina in the near future to upgrade production lines, 2.4 gigawatts of capacity by 2013 medium-term to 3.3 GW now. Sadie think-tank, Institute of electronics and information industry predicted that 2014 global production continued to show growth, at 52 per cent for the full year GW, is expected to exceed 28 gigawatts of photovoltaic modules.
“The current balance of supply and demand in the market is still relatively fragile, if the blind expansion of enterprises, and expansion, I am afraid again of overcapacity, PV industry could return to 2012” winter “. “Hua Jiang said. In addition, trade protectionism in some countries also pose challenges to China PV industry development.
The traditional goal of European market share fell sharply. 2012 the EU accounting for about 70% exports of photovoltaic products in China, 2013 reduced to about 30%, early 2014 the ratio continued to decline, to 22.6%, the EU has fallen for photovoltaic products export of China’s third-largest market, living in Japan and Africa. Japan markets since subsidies are too high, a heavier burden of the Government, may at any time terminate benefits; emerging markets such as India, and South Africa and other countries and regions, there are considerable uncertainties.
Given this year PV industry of polysilicon market needs improve, and battery pieces production continues to growth, and PV market continued expanded, led to many idle capacity of complex produced and added capacity production, coupled with Europe States trade barriers, situation, although PV industry ushered in has warmer, part leading enterprise also ended has continuous multiple quarter losses of situation, began profit, but capacity excess of fundamental contradictions does not get solution, capacity excess problem still is hanging in PV industry head Shang of a put sword, at any time are has outbreak of May.
So what is the resulting overcapacity in fundamental contradiction? How to solve?
China PV industry Alliance secretariat Dr Wang Shijiang, said “due to the high cost, photovoltaic industry is still in the ‘ boot support ‘, needs various cost-sharing: one is to rely on subsidies from the Government, the second is the long-term involvement of banks or insurance companies, three are PV companies to their own progress. ”
Government policy to guide the subsidy required to implement
In smog-ridden environment under pressure, photovoltaic power generation as scattered clouds, improve the living environment of the resort is touted by industry both inside and outside and pursuit. August 2013, the Chinese Government with unprecedented efforts to put forward a comprehensive policy to promote PV industry development, making this industry also became the focus of various capital compete to.
Last year, at the third plenary session, new Chinese leaders established the “letting the market plays a decisive role in the allocation of resources” direction of reform, and excess capacity problem is lack of market mechanism in itself leads to serious consequences. Look, a new Government has resolutely determined to cure problems of overcapacity.
This requires the Government to play the role of market mechanism to resolve the overcapacity, especially highlight the principal role of enterprises, but this does not mean, to wash its hands over to resolve the overcapacity in the market, much less optimistic that, enterprises could contribute to solving the problem of overcapacity. Market regulation with spontaneity, blindness, lag, often results in resolving the long cycle of overcapacity, and prone to repeated, eventually became more complex, accumulating contradictions will more and more.
Therefore, dissolving the excess capacity in the belief that market forces, but the combination of respect for the laws of the market and improving macro-control, focus on strengthening macro-control and market supervision, integrated use of legal, economic and administrative means, forming resolve the overcapacity problems together. Meanwhile, also want to deepen reform and institutional innovation in key areas, speed up the transformation of government functions, conducive to market competitive mechanisms, effective institutional mechanisms to resolve the overcapacity environment, eventually established dissolve the overcapacity problems of long-term mechanism.
Current PV market is still the policy guidance of the market. Since national NDRC last year clear national range within distributed PV subsidies standard for 0.42 Yuan/degrees Hou, currently national has has multiple provinces have launched place version of distributed PV subsidies policy; industrial and information Department also has released has two batch meet PV manufacturing industry specification conditions of enterprise list, guide industry specification development, and based on this list, guide national development Bank, financial institutions on focus enterprise of focus project for focus support.
Distributed PV power of promotion and development application more is heavy in the of heavy: June 2013 yilai, National Energy Council has introduced has distributed PV power demonstration district work programme, and on carried out distributed PV power application demonstration district construction of notification, and on issued distributed PV power project management provisional approach of notification, series support policy, each local Government also have issued has promoting distributed PV industry development of implementation approach.
However, despite policy continuously positive levels, but yields are low, financing, distributed PV for rooftops are hard to find, such as three challenges still exist, distributed throughout the project does not go well. National grid shows in 2014, grid-connected PV capacity in China in the first half of 2.33GW, and Department of energy earlier this year set the tone of the annual target of 14GW lags, which distributed grid-connected PV is less than 0.5GW, which is set at the beginning of 8GW. These data reflect the construction of distributed PV remains optimistic.
While the implementation of this policy there is a significant correlation, Hebei enterprises, solar photovoltaic project, a former provincial development and Reform Commission for approval, now changed into a filing system, but progress is still very slow, companies waited for more than a year. The reason, changed after recording system still needs to be relevant departments “nod”, still the decentralization of its competence. Plus is also a relevant technical evaluations, assessments, and some even became “two Governments”, seriously affecting the processing progress, benefit not available to hand.
On July 16, Li presided over a State Council Executive meeting, hear reports on policy measures to promote the supervision of the State Council and deploy pay close attention to the implementation of corrective action, and stressed the need to strengthen responsibility, do solid work, seek practical results. This article from OFweek solar PV NET
“Implementation” is Li keqiang met 18 times in the first half of the year Executive meeting of key words. Reporters combed some preliminary findings, Li 18 times before the Executive meeting of the State Council, involving the deployment of 4 steady growth, promoting reform involves deployment of 14 times, involves adjusting the structure of deployed 6 times, involves deployment of the Hui people’s livelihood 22 times, and “implementation” is the high frequency words, and these policies are key to landing.
Policies not only here, but also through city and County and township. Policies not only decisive and effective, hard-hitting, implement policies more quick and uncompromising. Of inadequate policies and measures implemented, the implementation of accountability, accountability seriously, according to the law for admonishing interviews, criticized or given administrative punishments.
This year, the sense of some ministries and local governments are under pressure from an unprecedented government self-regulation and the “right hand” restraint has never been as strong as it is today.
Financial companies: a detailed analysis of bold investments
Develop when PV power installed capacity at the beginning, the leadership of the Department of energy and the experts took pains, in case of fully consider the power to dissolve, 8GW 6GW installed and distributed machine has developed the ground targets. From the first quarter’s situation, this goal was installed hot and distributed capacity of severe cold embarrassing situation.
Although all related government agencies and enterprises for the PV industry support, but after nearly 10 years of industrial unrest, the relevant agencies to the PV industry’s thoughts and perceptions of risk and more mature. And financial sectors as many industry experts blame PV installed capacity objective to achieve the maximum goal.
Why distributed PV in cold? In the photovoltaic industry through a variety of channels to urge financial support when Government and PV companies should reflect on why to PV this both to the future of the financial industry but also for the benefit of mankind’s industries are so hesitant and wait-and-see?
For the PV industry, either ground power or distributed power plant, the main causes of financial indecision has the following several points:
, Terrestrial photovoltaic power plants
Although ground power station financial model looks very nice, but there are fatal flaws. Northwest’s ground station in terms of financial forecasting, better than traditional power generation industry. It is regrettable that, none of these financial models calculate the power loss in the course of operating the station. If 15% return on investment forecast can get capital returns, the current structural fault power brownouts and Northwest provinces every year only 10%, the return estimate you will need to do. On top of that, and something different to the traditional power is that value of PV technology innovation, progressive impairment annually. That is, the same installed capacity of traditional power point, 5 years later would sell for the same price. However, photovoltaic power plant, after 5 years, due to technology reasons, in addition to fees and price remains the same as the value of, the device on the power station itself basically belongs to the obsolete equipment, there is no full realisation possible.
Bowing to strong pressure from cash flow, and some shoddy, dumped in the PV power plant will not be able to sell equipment, using Bank loans to cash costs of production. Calls for this is also called for financial support to photovoltaic power generation equipment enterprises mainly of important reasons. However, the survey system with the support of the financial sectors in perfect loan, very low likelihood of being deceived. Because the plant’s long-term guarantee of quality is hard to come by.
Second, distributed PV power station
Distributed PV financial model, even more beautiful than her ground station, but why are financiers given the cold shoulder? The main reasons are as follows: article from OFweek solar PV NET
Golden Sun demonstration project with vigour, with government subsidies, launched a nationwide literacy campaign of clean energy. I have to say, regardless of whether the Golden Sun demonstration project is successful, mobilised by the Government at all levels and enterprises into a new awareness of energy industries total enlightenment. However, solar subsidies has repeatedly delayed, coupled with previous spontaneous personal use designed for environmental philosophy deficiency in the system, making a lot of Golden Sun project or no income, power itself to make ends meet, this has resulted in prohibitive investment financial companies for this type of project.
Distributed power stations facing great uncertainty of income. As Chinese society has not yet entered the credit society, on distributed power plants generally and are faced with tariffs are not receiving what should do what, roof renovation, housing demolition, the main electricity companies do so on a range of issues. Financial models designed for up to 20 or even 25 years long return period had few investment companies to completely avoid these risks. With so much uncertainty, the financial sector’s wait-and-see stop-quite understandable.
Yang Peng Libin, President of investment, LLP has ideas about tackling such a situation:
Recommends that the Government strictly limits the development of surface plant scale. As regards the current photovoltaic technology, itself generating capacity of small PV power station, long distance transportation, multiple levels of step-up and step-down unit standby loss, stable power supply and other reasons greatly reduces the efficiency of energy use. Ground power station should be in accordance with the principle of yixiaodingchan, slightly ahead of the development of practical size, power and ensure that all production project to full capacity.
Recommends that the Government clear when PV power station in technical renovation and equipment upgrades, as long as does not exceed the original capacity of installed capacity, reserve 20 electricity prices unchanged. Encouraging enterprises to upgrade their old photovoltaic devices.
Subsidies as soon as possible, in accordance with national commitments, liquidate the Golden Sun project, perfect state credit. Because most of Golden Sun demonstration project takes up a very nice roof resources, in order to avoid a waste of resources, and encourage powerful enterprises activate and transform a variety of inadequate generation of photovoltaic plant.
Recommended distributed generation charges collected by grid enterprises, you may consider giving power 1-2 money management fees. In accordance with national policies, measurement of electricity subsidies, either for personal use or on a margin line spontaneously, are identified by the power grid company. So power companies not to increase the workload of the technical, only increase the workload on financial management, should be the most convenient, fast, authoritative and credible electricity collection units.
Giving all after record, complete the power acceptance of distributed PV power plant (including the Golden Sun demonstration project) presented certificates of title, and also guarantee the plant’s electricity subsidies for electricity prices unchanged for 20 years. Issuing proof of ownership of power stations at the same time, clear power plant investment companies because the plant after the Government approved need renovation, demolition, relocation, in compensation from the Government for a fee at the same time, enjoy the right to rebuild new distributed power plants, while electricity prices keep the residual operating time to 20 years.
With this policy support, would eliminate the vast majority of the financial sector worries, photovoltaic power generation will enter the stage of rapid development.
Enterprise: merger and reorganization optimization, development technology and reduce costs
CPIA data display in 2013, cells and modules in China link capacity reached 41GW and 42GW yield 25GW and 27.4GW respectively, capacity utilization is only 61% and 65%.
“Seen from the numbers, production capacity is larger than the domestic market demand, but it is actually a structural surplus. “China PV industry association Deputy Secretary-General Wang Shijiang said.
On one hand, from the perspective of global PV industry development trends, PV industry in China, with perfect supporting industries with comparative advantages such as economies of scale, will become the global PV module manufacturing bases. If the solar module capacity of domestic and global demand than probably in balance of supply and demand, and even inadequate.
The other hand, my major solar module capacity utilization were higher, or insufficient capacity of some enterprises, need to seek third-party Foundry. Such as Yingli capacity is 2.45GW, but shipments reached 3.2GW Trina 2.4GW capacity, shipment volume is up to 2.5GW. While some small solar module business because in terms of size, technology, brands and less competitive enterprises, capacity utilization is grossly inadequate, some enterprises have gradually been large corporate mergers.
Therefore, the component PV module overcapacity should be providing structural surplus, namely low capacity (for example, some SMEs) excess, and not enough high-end capacity (demand for large enterprises in the Foundry). “Judging from the photovoltaic market developments, demand is steadily increasing, even if the excess is excess capacity also changes. From a global perspective, in the context of manufacturing sector to move closer to China, China’s capacity corresponds to the global market demand, supply and demand is not so tense. “Wang Shijiang emphasized,” so there is a supply and demand problem should be dialectically module. ”
To further strengthen and perfect the PV manufacturing industry management, promote orderly conditions for the effective implementation of the PV manufacturing industry to promote PV industrial structural adjustment and upgrading, Ministry of industry and information technology, launched in October last year the PV manufacturing industry standards notice of interim measures for the Administration, and June 23 announcement on December 30 last year and this year was in line with the PV manufacturing industry specification list of the conditions of the two groups of enterprises.
“Mergers are effective ways to optimize memory capacity can significantly accelerate the exit of backward production capacity. “Sadie said Jiang hua, a researcher at a think-tank,” guided by the policies of, merger and reorganization of enterprises will increasingly strong, there have been more than major mergers. ”
For example: in May this year, GCL-poly earlier this month after the takeover of the sentai group, the company name was changed to Concord energy.
GCL-poly earlier with China Minsheng investment group funds, if necessary, will give priority to the financing of GCL-poly and Concord new energy.
In April this year, Trina announced on 14th and Shenzhen Jie Jia Wei-innovative energy equipment company limited (hereinafter referred to as “Agile Flextronics”) reached an agreement to acquire its wholly owned subsidiary located in xiantao Hubei Hong-Yuan photovoltaic technology limited 51% equity, agile Flextronics 49% holds the remaining stake. After the merger, Hong-Yuan in Hubei Hubei Trina solar limited will be renamed. New venture will expand on the original battery capacity expected by 2014, Hubei Trina solar cell production capacity will be increased to 420 megawatts.
For now, merger and reorganization of enterprises in China have such types:
One is superior enterprises in acquiring smaller companies. Sitech group close to merger the Eagle’s nest group, access to the solar cell production capacity of 500MW; TRW merger its OEM factory Dong Yun PV obtained almost 400MW of solar module capacity.
Second, by means of capital operation, inventory of high quality companies. Changzhou shunfeng photovoltaic PV $ 3 billion acquisition of Suntech, Suntech brand continues to grow and develop, while shareholder LDK LDK, its silicon wafer businesses to expand. It is worth mentioning that, so buy Suntech’s specific programme is based on an average reimbursement ratio of around 31%, Wuxi Suntech use a total of $ 3 billion to pay off as much as $ 9.4 billion in loans.
Third, downstream on mergers and acquisitions, through industrial chain. Tongwei group 870 million yuan in Sichuan mergers has arisen now solar cell factory in Hefei, through the polysilicon to the solar module segment. At present, the integration of tongwei group still operating in Sichuan xinguang Silicon poly silicon and tianwei new energy solar module business. In addition, rising to 550 million dollar acquisition of Jiangsu in the East, Wick material limited 100% equity into PV PV modules supporting materials EVA film business.
Four is the global mergers and acquisitions. Hina has acquired the United States and Germany’s CIGS plant, in obtaining advanced technology also led to the globalization of production. Zhejiang zhengtai group Germany veteran crystalline silicon solar company Conergy to avoid EU double reverse. Sanan optoelectronics company CPV battery manufacturer-PV bought Israel ZenithSolar all assets of the company, including its intellectual property, inventory and equipment, have earned their cogeneration based on CPV technology products.
Wu is through mergers and acquisitions or cooperation in layout optimization of global production capacity. Renesola company by way of investment and mergers and acquisitions, and layout has a number of production plants all over the world, in order to avoid potential trade barriers. Some businesses and other enterprises in the area of cooperation to build a solid system of Foundry.
Six government-led mergers. Qinghai province, through policy support and guidance, and promoting enterprises around the upper reaches of the Yellow River in the province, such as utilities, Asia silicon for merger and reorganization of enterprises, and encourage enterprises to hold together for warmth, and improved ability to withstand market risks.
“Because of their different starting point, so the means of merger and reorganization of enterprises and also have their own characteristics. “Hua Jiang said,” but no matter how the process and momentum of the disorderly development of PV industry in China has been significantly curbed. Mergers at the same time, domestic companies are stepping up internal reform efforts, some backward production capacity gradually began to withdraw. ”
From another point of view of enterprise development: the key lies in the reduced cost of PV.
Han Li Hejun, Chairman Board that “overcapacity” is a false dichotomy. By 2035 the clean energy will replace the 50% of primary energy, while China’s total PV installed capacity relative to the object is still inadequate.
Today, the proportion of photovoltaic power in China’s energy structure is still insignificant, PV overcapacity continues to be regarded as the core issue of the photovoltaic industry in the industry. The key breakthrough this contradiction is able to break through the PV industry relies on a “subsidy” and survival of the business model.
PV manufacturers want to get rid of “subsidies” and “Internet” constraints, core technology development and cost reduction. Such as BIPV photovoltaic glass can be both building materials and power functions, can be arbitrary like ordinary glass cutting and low price, and if, energy storage technology development so that each building and each family has its own energy storage systems, so even if PV is not Internet access, have also been massive promotion and development.
I think that if you set PV overcapacity problem solving compared the process to a child process, then the Government plays a “life coach” role, it teaches through policy guidance, macro-control “child” what is right. Financial institutions act as “parent” role, as the “kids” provides a solid material support to “children” fall in the growth, even if the fall can also climb up. As a “child” for businesses, with studious spirit of Confucianism “learn less, still feared loss of the”. Mergers and reorganizations, technical breakthroughs, and reduce the cost of photovoltaic power generation. To get rid of “Mentor” support and “parents” care for and grow. Photovoltaic industry in the “children” mature, PV market has matured, excess capacity can be effectively controlled. But the current situation, “Mentor”, “parent” and “child” still need to do everything we can, cooperation and effort between the three are indispensable.
Original title: PV overcapacity to be colleagues cast work together