Finance, photovoltaic “hand in hand” to promote industry development

Polaris solar PV net news: recently, guantao County of Hebei province’s largest distributed grid-connected photovoltaic devices generate electricity, supply staff on the part of the photovoltaic power generation equipment to conduct an inspection.

Jevons Lee photography

In the process of rapid development of PV industry in China encounter an obstruction, it is financing. Due to the upfront funding for photovoltaic projects larger, the need for financing, however, due to various reasons, financial institutions on the photovoltaic market, particularly distributed PV there is misunderstanding.

1. distributed PV project is “bad money”

“After China’s PV market, industry insiders feel an overwhelmed local, which is ‘ money ‘. “The national energy administration, Liang zhipeng, Deputy Director of the new and renewable energy Division undoubtedly hinder the development of PV industry in China at present.

Due to the relatively large photovoltaic plant invested capital in the early, rely solely on the individual or the enterprise is hard to bear. This year, China plans to add PV installed capacity of 14 million-kilowatt, if the average 8000 Yuan per kilowatt of input, you will need to 112 billion yuan of investment. Therefore, it needs financing financing platform, and this is a very big challenge to PV industry.

Reporters from the “2014 China Solar leaders Summit” to know, China PV industry difficulties in financing is a common phenomenon, especially distributed PV project is the most serious.

The reason, circular economy in China renewable energy Association Chairman Li junfeng, Director of the analysis, distributed photovoltaic project development there is no business model, banks see distributed the cash flow of the project, arguing that high investment risk. In addition, relative to conventional power generation projects, distributed PV project is still a relatively new thing, many financial institutions are not very understanding, not blind devotion.

A few years ago, PV manufacturing overcapacity in China, coupled with China to limit exports of photovoltaic products in foreign countries, causing many photovoltaic manufacturing companies into the business crisis, not bank loans, and some financial institutions will confuse photovoltaic and photovoltaic manufacturing, restrictions on photovoltaic power generation project lending and raise interest rates, resulting in financing photovoltaic projects.

Only thousands of Watts, shijiqian GW of small distributed PV power station project, due to the small projects, loans to small, ability to withstand risk is relatively small, banks are reluctant to lend to them.

Meanwhile, financing a single PV Application market experienced funding difficulties. Businesses and residents in the development of distributed power station project, raised much of the money loans from policy banks and commercial banks, if banks stop lending for PV companies, developers would be lack of funding, power station construction it would be difficult to go on, and there is no other alternative sources of funding.

Experts from the financial system from the perspective of institutional profit, that distributed photovoltaic investment income problem also leads to distributed power project financing difficulties. As a has in can renewable energy financing field work more than 10 years of “old investors”–zhongqing (Beijing) investment limited Chairman and General Manager daicunfeng think, China of PV station project essentially is a meet national policy of, and has stable cash flow of, and life period in 25 of, and full investment internal proceeds rate about 10% of assets, single from financial investment angle view, this actually is a worth concern of field.

But the capital is profit, financial institutions themselves have certain requirements for investment yields, even with a State subsidy, distributed PV sometimes is difficult to meet these financial institutions profit requirements, resulting in lower-than-expected investment income. In addition, the photovoltaic plant investment cost payback periods tend to be long, in return for such long periods, and low return on investment, in the view of Li junfeng, which is not very attractive to financial institutions.

2. in-depth communication strengthen policy support and network guarantee

“A nation’s hope lies in the industrial and manufacturing sector, we have to respect the manufacturing sector. “Li junfeng said PV industry needs financial support, in particular PV Application market. In his view, solve the financing problems of PV industry development, the most fundamental is the financial system, so that more money could flow to the photovoltaic industry, lower financing costs for developers building photovoltaic power plants. Financial institutions, insurance agencies, and enterprises should further interaction, establish a finance model of the situation of the photovoltaic industry, realization of photovoltaic manufacturing companies, power plants and even the building rooftop PV residents, as well as financial institutions and win-win.

For objective financing difficulties, Liang zhipeng, gives a more specific solution. In his view, understand what PV is first of all to make the financial institutions. First half of the year, National Energy Board start to build banks and PV industry communication platform, increased investor confidence. “We need to make financial institutions recognized investment value of PV power projects. For example, the Government and the power company has released a number of supporting policies, sending electricity into the grid in time, market protection. Product guarantees by the State, the risk is very low, there is no reason not to vote for PV industry? “Liang zhipeng said.

In addition, Liang zhipeng, argue that financial institutions should also be creative, change investment options. For a long time now, financial institutions are more likely to invest in large projects, distributed generation projects for some of the thousands of Watts, in particular rural projects, financial institutions often feel small, reluctant to invest. In fact, these small-scale investment in 5 years or so, can recover the cost and generate revenue. “Financial institutions should be for a number of small distributed PV power plant to develop new financial products to meet the market demand. “Liang zhipeng said.

In fact, some financial institutions have launched relevant financial products. In 2012, yingda taihe property insurance company launched PV products 25-year quality guarantee insurance, this year for photovoltaic power generation enterprises, develop photovoltaic “package”, in fact, is the PV industry’s comprehensive insurance, which PV manufacturers may take profits hit by natural disaster, all included in the insurance.

According to the statistical data of the past two years, China’s generating capacity every year, renewable energy accounted for more than half of that clean energy is a market full of potential, if a financial institution or just to focus on its investment in traditional coal-fired power will inevitably miss the clean energy market. “PV industry not only failed to grow, and also will lose a very good investment opportunities for financial institutions. “Liang zhipeng, said that local governments should also actively involve public guarantee funds, using financial leverage, lower financial institutions ‘ concerns about PV power generation projects.

“National grid companies supporting the development of distributed PV policy, will give capital market with great confidence. “Specializing in investments in new energy Institute, said Han Qiming, an analyst at shenyin wanguo securities, since the beginning of last year, the State began to focus on distributed PV power plant construction, financing problems, core of the paradox is that if distributed power plants is simply spontaneous, for personal use, so its investment cycle will be 20-25, and there is a very big risk. But State grid services to distributed PV can be full purchase of electricity generated by the project, which not only reduces the investment cycle and reducing market risk.

Original title: finance, photovoltaic “hand in hand” to promote industry development

Posted in News.