CSR as the Chang: barriers to PV inverter industry needed standards

Polaris solar PV net news: almost all of them unexpected, PV inverter industry competition so fierce, prices fall so fast.

Early was 0.4~0.5 Yuan per watt delivery market, have in some PV power station project tender has now repeatedly popping out is lower than the lowest price of 0.25 Yuan per watt. But more than six months, the price has nearly halved.

Was previously too profitable to have so much compression space? Is also rapid technological progress and rapid cost reduction to? Or, this is competition in the market to kill red eye after losing money to earn?

While at the same time, and appears adjacent to the same types of products with manufacturers in different projects but over a month offer a difference of up to 30% per cent of the cases.

Such a mess, why?

This not only includes the inverter manufacturers, many in the industry are saying can not read, it inevitably makes people on the current quality of the inverter industry amid fears of a deep and quality.

Familiar with inverter technology for professional status and cost, the answer may be self-evident. But two of them, companies in the industry may have really beyond words. Especially for those who pay more attention to the quality of the industry leading for a good company and are interested in the long term, such a situation or dilemma.

A man without distant care, he must have immediate worries. Embarrassed if you can’t jump in today’s Competition Bureau to consider the future of the industry as a whole, I am afraid that no one will have a good future.

As domestic high-power variable flow technology field only of national engineering research institutions–membership Yu China South car group of Zhuzhou variable flow technology National Engineering Research Center limited, relies on South car group powerful of technology, and resources and the funds strength, since 2009 entered PV inverse variable device industry yilai, market share has been ranked industry vanguard, its central, and national technology center of background, and across industrial variable flow, and industrial drive, and ship power and new energy, industry of across field vision, Its reflections on the PV inverter industry, but also a little bit irrational.

Recently, a reporter visiting Hunan Zhuzhou, an interview with the General Manager Ren Qichang, is the inverter industry today the competitive situation to good communication. Following are collated from an interview.

CSR country converter–interview with Executive Director of the Center, and General Manager Chang

Reporter: How do you see the PV inverter industry competition in the current situation?

Ren Qichang: Judging from the current overall market situation, everyone seems to have been a bit busy and chaotic, including shipping, the prices seem very messy. In the recent bidding, even the same types of products with manufacturers offer, and soon afterwards on the two projects may differ up to 30%.

This situation is evident, the industry does have some messed up.

We, too, do the inverter and know what kind of price can produce qualified products, and most of the company’s technology and cost to the industry is basically about it. Therefore, from the perspective of market prices, there are inverter definitely cannot meet the normal power demand. According to our estimates, the life of such a product can hardly meet the plant for 25 years.

However, such products can not only sell also sell very well.

This is the problem.

Recently part of the placing on the market of products, perhaps there may be some manufacturers eliminate the previous inventory, but are more likely to sacrifice product quality to meet price competition in the market, the price has surpassed the inverter manufacturing basic cost and quality demands of the bottom line.

Consequent results, I personally think that some products will be quality problems occur frequently, accidents may occur.

This is a scary thing.

Such a situation, CSR is not willing to sacrifice the quality of products business was hurt. Some in the industry are the main force, force businesses, live in this industry were very tired, or yaosibuhuo, or live without it. Includes industry-leading enterprise, in such a competitive situation, I believe that could be alive and well, they must be very worried.

If the competition continues, wanted to be good business cannot go on playing. While CSR also has many other industries to support each other, but if market conditions are still so chaotic, how long can we support, will it be necessary to survive, perhaps worth considering.

CSR Group’s recent assessment of industries to import mechanism, South of the car must not be at the expense of quality on the way to remain in the market.

Reporter: in your opinion, what are the deep causes of this phenomenon?

Ren Qichang: surface, due to price competition caused the current mess of disorder. But fundamentally, or because of the lack of a standard, or standard broad, no way to implement it.

In “Golden Sun” period, because basically there is no standard, coupled with lack of supervision of the market, so we created “Golden Sun” project was riddled with chaos.

And now the standard, many enterprises, especially some of the leading enterprise in the development of enterprise standards and later evolved, we recognized industry standards. But understanding of the standards are different, so the quality varies. In addition, even some businesses simply do not have the ability to establish a standard mechanism for implementation.

So, once the deterioration of market conditions, even if the standard-setters themselves are very strict, but other companies may be oblivious to this standard, some companies in order to survive, they will stop at nothing to lower standards, or even simply shoddy.

Another important reason, but price was due to the lower power station market investment theory. Today’s power plant investment and raw materials, all inputs are low price, proud even at the lowest prices. However, to ensure the quality of any products, will have its most basic costs are impossible to break through. Wei-price as a result, is understandable.

Also, is the absence of regulation of the market, and can even say that without regulatory oversight. Current power plant construction is basically dominated by owner, ostensibly to observe certain design specifications, construction norms, but it is actually what do owners want to build it as you build, the lack of a unified system of standards and regulatory system to be regulated.

Lower station investors racing to pursue low price practice, no doubt the quality and price in the current market mess has played a contributory role, but also makes the situation even more disorderly competition in the industry.

Reporter: from the macro point of view, subsidy is the plant’s output, if investors are willing to use inferior products, that risk will be borne by himself, right?

Ren Qichang: the most fundamental reason is that investors in our market, that is, owners, some of these are not solely based on return on investment point of view, they may be divided into many. One of them is that you have raised in previous articles “pseudo-owners”, which is a very good concept you describe the present market conditions.

Lot of PV power station owners may be considered, with the lowest prices to put, built after the power station, then through some means of valuation sell for a good price to sell, they do not bear the long-term risk. Because he sold the plant means a lot. This is pseudo-owners of the practice.

And those who really want to hold power plant owners, it is possible to do because you don’t know how, technology and not through these issues; the second is advanced, are likely to be considered, then 35 years after power generation efficiency does not meet the requirements, supplier again with buck. Because the loans are basically not in a lump sum, but also to set aside years of warranty deposit. This can lead to a large number of power plant investment and product supply side buck fight.

Even if those in power plant owners who pay more attention to the quality, they are also more willing to make a good power station on its own, which station sells time.

Long warranty period also brought new problems, as in its current three-year and five-year warranty period, may give you lifetime supply company only three years, and then, after service who is going to do for you?

There is also a class of owners, such as investment companies, consideration is to extend the overall size, such as total gigawatt-level, and then listing, IPO is not easy, then went to the third ring, ring money, how about operating this power station might have got no heart tube, has achieved his goals from the capital markets.

This, of course, on the market there are a lot of owners are really going to do with the operation of the power station, so what they did is not the same, bidding link will find a way to control the product quality and control the quality of power station.

But in the present circumstances, such owner is not much.

Therefore, if we do not do to control this market, behind the situation could be very serious. Now the total amount of installed capacity is not large, but only 10 gigawatts, 20 GW, to 50 gigawatts, 100 GW or more, what should I do? If the plant can’t achieve designed generating capacity of 80%, if 20% power station is not generating, what should I do?

Such a situation, perhaps we may meet soon. My personal judgment, within 35 years, there may be a large number of power plant equipment needs to be completely replaced.

Hopefully, are our unfounded.

Reporter: as far as we know, some investors in power station financial model, and inverter replaced conditions have been taken into account by, doing so can avoid investment risks and issues?

Ren Qichang: Yes, he can be considered the replacement, because inverter systems share of total investment is very low.

But I considered of is a more big of problem, now inverse variable device has competition to to by points money, and PCT money to calculation cost and profit of stage has, in this stage, owners if on himself of project is responsible for, completely can through let a points money two points money and obtained quality better of inverse variable device, and also can so in service aspects get better of guarantees, so why not does?

You can be replaced, even if you can afford it, but you do not have to spend money to pay? Also, when you spend so far had one or two cents. Isn’t this a huge waste of money?

Why now we can buy a car, buy the better, is actually considering late maintenance and replacement costs, actually too general reduces the cost of car.

We all walks of short-term, too much.

Like our building, 70, property rights, may be only 40 years of life, 40 years after you rebuilt again, and how much? Costs if you are an existing three branches on the basis of a one-time investment, may be attainable for 70 years or more of life expectancy.

Also, why so many elevator accident news recently? Because of China’s elevator service life of only 20 years, and many began to lift in 10 years, let alone replace, even the maintenance became a problem.

Many examples of this. This was partly because investors were far too focused on short-term gains rather than long-term causes of consolidated income, on the other hand is the lack of standards and in developing the standards, the lack of comprehensive consideration.

As a new industry, photovoltaic to go the old way, too?

PV equipment replacement in five years ‘ time, who is going to sell? In fact, no matter who is paying, the end result is a national burden, burden is China’s investors.

Obviously is to add a little more investment can do better quality things, we have to repeatedly reduce current costs and late in paying more to cover, I think, this is something very unserious and irresponsible.

This truth, is indeed worth pondering.

For PV investors, whether it is pseudo-owner or real owner, in order to reduce a little bit into the rush without limits in the current period Member, not only do no good, the cost is likely to be larger in the late.

Of course, now the trends are improving. Owners tell us, not looking at the prices, but looking at our identity as Central, believe us brands and better quality assurance, because such owners is trying to make the station their own operations.

Therefore, the trend is changing, is for the better.

Interviewer: so, if you want to fundamentally reverse the current market in “bad money drives out good money” trend, what should you do? If strict standards, for PV industry requires constant innovation, will constitute a limitation and restriction of technological innovation?

Ren Qichang: first of all, is to develop and establish standard systems, through strict criteria to build market barriers, let those shoddy, others who did not survive.

In this regard, some of the relevant agencies and departments are actively working to, there are many results have come out.

However, there is a question worth thinking about. Do we need to get back to their own set of criteria, rather than learning advanced experience of foreign countries.

Do you know how do we become the world standard for high-speed standard is it?

Quite simply, is-ISM, you Germany’s standards, Japan’s Shinkansen standards are not the best and most rigorous in the world standard? Well, I took, and my starting point is the best standards in the world. Then, after digestion and absorption, I then set up their own more stringent standards, far outpacing Germany standards, Japan’s Shinkansen standards. So, I have become the most stringent standards in the world.

Therefore, PV, we can directly learn current best standards system in the world, got after digestion and absorption of somebody else’s standards, then rush over to his standards, and why not?

Secondly, you should assess existing power stations as a whole, Governments are going to dominate this thing, to have a clearer understanding of market realities and see exactly how far markets, what is the cause of confusion, then develop countermeasures for improvement.

In addition, to make truly professional and technical personnel to guard, there must be a clear market gateway, such as link strictly from network access. Also from the leak plugging in system design, and like some hard numbers to establish a scientific evaluation mechanism.

If firmly shut PV power station access, power plant systems and equipment to assess not qualified does not give access to. I believe that as long as the barrier holding, most problems can be solved, can also greatly improve the present mess.

In fact, HSR’s success has given us a lot of inspiration, has a lot of experience worthy of PV industry study.

Similarly, we can see from the successful experience of high speed rail, strict standards are not only not suppression and limitation of enterprise innovation, also makes us stand at a higher starting point for research and development technology, and surpass the world’s advanced level.

Only in this way can we really go out of the country, to the world.

Innovation without limits, I believe the PV field technician is a fount of creativity, coupled with States for the orderly control of the photovoltaic industry, photovoltaic industry will show a healthy, sustainable development in which the PV will be refreshed again in the world of competitive advantage.

Original title: Ren Qichang: inverter industry needs a standard threshold

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