Photovoltaic industry in China has broad prospects for development

Photovoltaic products market environment at home and abroad S&P Consulting believes that despite the better-than-expected world economic recovery since 2010, the unemployment rate in the United States, Japan, and the European Union has remained high, consumer confidence has been slow to recover, and the real estate market and private economy have not yet fully started. Adjustments slowed. The recovery of the world economy has been a difficult and arduous one, and it may enter a period of low to medium growth.

In 2010, in the face of a complex and ever-changing domestic and foreign environment, while continuing to implement the financial crisis package, China will accelerate the transformation of economic development patterns and economic restructuring, and the stable economic growth will continue to develop in the expected direction of macroeconomic control.

Photovoltaic industry chain Photovoltaic industry chain can be divided into three parts: upper, middle, and downstream. The upstream consists of three steps: refining solar grade silicon, manufacturing silicon rods, silicon germanium, and cutting silicon wafers.

The midstream consists of the process of making batteries. The downstream consists of two parts: the battery module and the solar power system.

The structural characteristics of the photovoltaic industry represent a typical pyramid model: the number of upstream companies is small, the number of companies engaged in midstream business is much higher than that of the upstream, and the number of downstream companies is the largest.

China's current photovoltaic market operation status Photovoltaic (PV) is a new type of power generation system that uses the photovoltaic effect of semiconductor materials of solar cells to directly convert solar radiation energy into electrical energy. It has two modes: independent operation and grid-connected operation. China's current photovoltaic industry mainly refers to the crystalline silicon solar cell industry. The photovoltaic industry has become the fastest-growing industry after China's renewable energy industry relays wind power generation.

The rapid development of China's photovoltaic manufacturing industry benefits from the European PV market. According to the data provided by Shangpu Consulting, China's PV cell production in 2010 has exceeded 50% of global output. At present, there are dozens of photovoltaic companies listed at home and abroad. According to estimates, the industry's annual output value is about 300 billion yuan, and the number of direct employees is about 300,000.

Cheng Longxian consulting industry analyst Cheng Longxian believes that China's photovoltaic industry has embarked on a rapid development road, has mastered the key technology including solar cell manufacturing, polysilicon production and Other equipment, equipment and major raw materials to gradually achieve localization, rapid expansion of industrial scale, industry The chain continues to improve, manufacturing costs continue to decline, and it has strong international competitiveness.

China's Photovoltaic Product Supply Profile in 2010 As of the end of 2010, thermal power generation in China still dominates the total installed capacity. The total installed capacity of non-fossil energy accounted for 26.6%, an increase of 1.1 percentage points over the previous year.

Chart Total installed capacity of China's power generation capacity and newly added power generation capacity in 2010 (million kilowatts)

According to the life cycle theory of sales growth rate division method: sales growth rate greater than 10% for growth, 0.1% -10% for the investment or maturity, and less than 0 for the recession, may wish to make the following conclusions about the photovoltaic industry:

Cheng Long consulting analyst Cheng Longxian believes that the life cycle of the industry is generally 100 to 100 years, and the shortest is about 60 years. Since photovoltaic products are closely related to the material and cultural life of human beings, at least the life cycle of photovoltaic industry can be affirmed. It will be very long.

Since we cannot know the development of the industry in the future, and the life cycle theory is a post-mortem analysis, we are not sure whether the industry's maturation period will end, ie, how long it will last.

China's PV market competition landscape analysis Cheng Longxian said that although the current global PV market presents a recovery, but due to the global solar market there may be excess supply, the relevant countries may therefore initiate trade protection. Currently, over 95% of PV products in China are mainly used for export. Therefore, the outlook for the industry is still not optimistic. Enterprises still need to plan ahead, enter the emerging markets as soon as possible, further improve product quality, and gradually change the previous competition strategy relying solely on price advantages.

Shangpu Consulting expects that by mid-2011 or the end of the year, the production capacity of Suntech Power, Jingao, Trina Solar and Yingli will exceed 1.5 GW, and some even exceed 2 GW; "The state-owned enterprises and private enterprises that have come in, such as China Energy Group, Guodian Group, Dongfang Electric, Hongrun Construction, Xinhuaguang, etc., have made great strides. In 2011, whether the world market can absorb these new production capacity is not yet known, but it is certain that the brutal competition and slaughter of photovoltaic companies is inevitable.

At present, the main problem in China's photovoltaic market is that the general consultancy study believes that China has abundant solar energy resources and a potentially huge market. After years of hard work, it has laid a good foundation for the greater development and larger-scale application of solar photovoltaic power generation. However, to achieve full commercialization and further expand the market, we must also strive to eliminate market barriers to development. These problems are mainly reflected in production costs, construction regulations, capital, policies, and market development.

In terms of production costs, China's solar cell module manufacturers have a small scale of production, backward infrastructure and production equipment, and overall product quality is lower than foreign products. The production cost of photovoltaic modules is about 20% higher than that of foreign countries. The high cost is the key reason that restricts the rapid development and development of photovoltaic power generation.

With regard to financial obstacles, there is a shortage of funds and long-term problems need to be resolved. The amount of funds used for research and development is small and the interest rate of banks** is high. To develop photovoltaic projects must solve long-term ** channels.

In terms of policy barriers, China has no practical incentives to encourage the development of photovoltaic power generation, including taxation policies, subsidy policies, photovoltaic grid-connected policies, and reasonable electricity price policies.

Obstacles to market development include: 1. Lack of infrastructure, local production capacity, sales and services; 2. Insufficient consumer awareness; 3. Insufficient investment in the development of new markets and new products; 4. Lack of consumer credit; 5. Excessive costs .

Prospects for the development of the photovoltaic market in the next five years In 2010, the global revenue of the photovoltaic industry increased significantly. At the same time, PV companies have successfully raised more than US$10 billion in stocks and bonds over the past 12 months.

In 2010, the top five photovoltaic market countries in the world were Germany, Italy, the Czech Republic, Japan, and the United States. These five countries accounted for 80% of the global demand. The top three photovoltaic market countries in Europe are Germany, Italy and the Czech Republic.

In 2010, the growth of the Japanese and American markets was very rapid, with annual growth reaching 101% and 96% respectively. In total, more than 100 countries contributed to the rapid growth in demand for the photovoltaic industry in 2010.

Chart 2010 Global PV market share by region In major markets in Europe, the photovoltaic industry has entered a stage of policy tightening, and the rate of subsidies reduction is far greater than the rate of cost reduction. In the next two years, when the size of some important markets shrinks, the major regions of the United States, Canada, China, and Japan still have the potential for growth.

China is a vast country with a complex geographical environment. Tibet, Xinjiang, Inner Mongolia, Yunnan, Guizhou, Sichuan and other places are located in remote and desert areas. Solar energy is abundant. The use of solar photovoltaic products to solve the problem of local power supply should be one of the best choices. .

Since 2010, the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Housing and Urban-Rural Development, and the National Energy Administration have issued a joint document to substantially adjust the relevant policies of the "Golden Sun demonstration project and the demonstration project of solar photovoltaic building applications", involving equipment tendering and project adjustments. Subsidy standards, project networking and many other key links.

In 2010, 272MW of new projects were added. In addition, it has announced the establishment of 13 demonstration parks for concentrated application of photovoltaic power generation throughout the country to promote the application of China's photovoltaic industry. And publicly expressed that after each year of 2012, the domestic application scale should not be less than 1000MW.

Champion Consulting Investment in PV Industry Investment in the photovoltaic industry, Cheng Longxian Consulting analyst Cheng Longxian believes that China, as the world’s fastest economically developing economy, is only at the downstream level of technology and application in the field of photovoltaic power generation.

During the 12th Five-Year Plan period in China, China will build 100 new energy demonstration cities, and further build grid-connected photovoltaic power stations to develop microgrid demonstration areas in regions with rich solar energy resources such as the Midwest of China, through various means. Promote the application of photovoltaic power generation in China.

Champ Consulting's investment advice for the photovoltaic industry has three points:

1. The price of solar cell raw materials remains high, and the supply of equipment is in short supply. Some of the biggest complaints from domestic solar cell manufacturers to equipment companies are that they cannot deliver on schedule, which affects their expansion schedule. The main reason is that the market is growing too fast. Many domestic equipment companies have been small-scale operations in the past and cannot withstand rapid growth. With the advent of the financial crisis, there has been a great impact on domestic photovoltaic companies. Once the balance of production and sales in overseas markets, China's photovoltaic industry will face difficulties, the domestic excess photovoltaic industry will reshuffle, so the new project must be careful.

2. The future development of China's photovoltaic industry should strengthen cooperation. Enterprises should strive to reduce manufacturing costs through technological upgrading and scale expansion, but the government should also provide policy support.

3. From the perspective of the development status of the global photovoltaic industry, 90% of the photovoltaic industry is a policy market. At present, the photovoltaic industry is not entirely a market economy. It is also mainly a government act. Once overseas markets are balanced in production and sales, any country will not take it. To subsidize foreign companies, the Chinese PV industry must develop its own market after 2010.