Encounter policy "quick brakes" PV industry reproduces shocks Orders reduce price declines
Editor's Note: As a representative of strategic emerging industries, China's photovoltaic industry has risen rapidly in recent years and has become one of the few industries in China with global market influence. However, at the same time of rapid development, the photovoltaic industry also suffers from the symptoms of “three highs and one low” with high subsidies, high investment, high debt and low core technology, and multiple “tightening curses” such as policy dependence, trade friction, and financial credit tightening. Increased industry difficulties. On May 31 this year, the three ministries and commissions jointly issued the "Notice on Matters Related to Photovoltaic Power Generation in 2018" (referred to as "531 New Deal"), and clearly proposed a number of measures to properly control the scale of photovoltaic construction, which triggered a series of reactions. After another round of shocks in China's PV industry after the “double-reverse” in Europe and America in 2012, some deep-seated problems in the industry still exist, and the “big but not strong” PV industry needs to be reborn. Our reporter conducted an exclusive investigation. This time, the "New Photovoltaic Observation" was launched and published two days in a row. Stay tuned.
As a national strategic emerging industry and a few domestic industries with global market influence, the photovoltaic industry has been accompanied by industrial policy stimulation and financial support since its birth. While the scale is expanding rapidly, the deep dependence on policy has become increasingly The "tightening curse" of the healthy development of the industry - the industry will be shocked as soon as the policy is overwhelming. After the "531 New Deal", the photovoltaic industry reacted strongly, once again revealing deep-seated problems in industries such as lack of core technology and too dependent on policies.
Recurring shocks, discontinued production, reduced production, orders reduced price decline
Layoffs, production suspensions, and wage arrears... The PV business shocks that followed the “531 New Deal” triggered concerns and worries in the industry.
After the "531 New Deal", Jiangsu Zhenfa, Nanjing CLP, Changzhou GCL, Hairun Photovoltaic, and Jiangxi Xuyang Reddy and many other companies have exposed employee payroll incidents, Longji, GCL-Poly, LDK, etc. Leading photovoltaic enterprises have stopped production or reduced production or sales of subordinate power stations and subsidiaries.
According to a survey conducted by the China Photovoltaic Industry Association, the current utilization rate of the photovoltaic industry has dropped sharply. Many companies have stopped working or reduced production capacity due to the reduction of orders after the “531 New Deal”. Large, medium and small enterprises have not been spared. Chen Jihua, deputy general manager of Jiangxi Ruijing Solar Technology Co., Ltd. said: "After the '531 New Deal', our sales in June quickly decreased from 120 million yuan to more than 50 million yuan, and lost more than 6 million yuan. 15 production lines only opened. 4. "The former industry leader Savi LDK's subordinate silicon material factory also stopped production and maintenance, the battery factory only a small number of orders are in production.
Not only has orders dropped sharply, but product prices have also fallen sharply. Guo Yijun, assistant to the president of Jinko Energy, said that after the introduction of the “531 New Deal”, the price of polysilicon material dropped rapidly from 110-120 yuan/kg to 80 yuan/kg, and the monocrystalline silicon material was similar. Some silicon materials companies stopped production. Fan Lei, chairman of Xuyang Reddy Company, calculated the cost account. After the “531 New Deal”, the price of silicon wafers dropped from 3.6 yuan/piece to 2.35 yuan/piece, while the cost of silicon for the production of a silicon wafer was 1.3 yuan. The non-silicon cost is 1.1 yuan, and the cost of manufacturing each piece of silicon wafer is 5 cents. Counting management, finance, and sales expenses of about 0.25 yuan per piece and depreciation of 0.2 yuan per piece, the loss is even greater, and only some production lines can be closed. “In the past two years, we have basically maintained a state of full production, with 76 million wafers produced per month. However, the output in June fell to 11 million pieces, and the operating rate was less than 15%.”
The "531 New Deal" proposed not to arrange the construction of ordinary photovoltaic power plants in 2018, and the scale of distributed photovoltaic projects is 10 GW. China PV Industry Association statistics show that in the first half of this year, the domestic distributed PV installed capacity is about 12GW. Jiang Fuping, general manager of Shanghai Chaori (Jiujiang) Solar Energy Co., Ltd. said: "This means that the annual indicators have been used up, and the policy is not clear next year. The industry is very upset and I don't know what to do next."
Deep dependence on the policy, the winds and the winds
China's photovoltaic industry has developed rapidly from scratch in the past ten years since the new century, and has become an emerging industry with global market influence. However, the reporter's research found that such an industry with international market competitiveness wears multiple "tightening curses."
——Industrial policy dependence is difficult to treat. Due to the high cost of photovoltaic power generation at the beginning of the domestic PV market in 2013, the state implemented a subsidy policy for PV power plant construction. Yuan Wei, deputy general manager of LDK, said that under the stimulus of the subsidy policy, the photovoltaic industry has once again seen investment hotspots. Many people who have not been engaged in the photovoltaic industry have entered this field. China Photovoltaic Industry Association statistics show that in 2017, China's production of polysilicon, silicon wafers, battery chips and modules accounted for 55%, 87%, 69% and 71% of the world respectively, and the cumulative installed capacity of photovoltaics was 130GW, ranking first in the world for three consecutive years. .
At the beginning of the development of the photovoltaic industry more than a decade ago, almost all provinces supported the photovoltaic industry as a key emerging industry. However, the "531 New Deal" is equivalent to the "quick brake" of the subsidy policy, and the industry is in trouble. Yuan Wei exclaimed: "The policy has had too much impact on the industry! The policy is turbulent, and the industry is squally."
- The risk of trade friction is high. China's photovoltaic industry has been swinging between the domestic market and foreign markets. Before and after 2012, in addition to upstream silicon materials, China's photovoltaic industry production scale is leading the world. However, several rounds of “double-reverse” in Europe and the United States have caused the photovoltaic industry to fall into the first industry-wide predicament, and a large number of enterprises have gone bankrupt, directly prompting China to launch domestic PV applications. market. "At that time, we relied heavily on foreign markets. Europe and the United States 'double anti-" on the one hand because of our competitive advantage in industrialization, on the other hand, because the industry is expanding too fast, there will be price vicious competition." China Renewable Energy Society Photovoltaic Specialty Wu Dacheng, former deputy director of the committee, said.
After the "531 New Deal" was introduced, many companies set their sights on overseas markets such as India. Chen Jihua said: "The 'going out' also faces many obstacles, and there may be a new round of disorderly competition." Since the beginning of this year, the United States has introduced "201 clauses" for imposing protective tariffs on imported solar cells and components. In July, India ruled that The battery and components imported from China and Malaysia are subject to a two-year safeguards tax.
-- Financing loans are likely to tighten. China's photovoltaic industry also has an important life--financial loan. The industry started to fluctuate in 2012. Some bankruptcies have been closed down due to the break of the capital chain and the bank's tightening of loans. After the "531 New Deal," many companies were worried that it would trigger a chain reaction of financial institutions' lending and lending.
Fan Lei said that the debt ratio of the photovoltaic industry is high, and the market will collapse if the market collapses. "We currently have a debt of about 2.4 billion yuan, which is small in the industry. But we have started to pay interest in April, and it is very likely that we will be treated as a non-performing loan at the end of September."
"The boss will die"? Leading companies have fallen "the altar" industry "big but not strong"
Looking back at the development history of the photovoltaic industry, we can find that some of the leading PV giants in China and even the world have fallen into the "Idol" after experiencing a short-lived scenery. Nowadays, under the general environment of subsidy reduction and tightening of financing environment, these unfavorable factors pose more severe challenges to the management capabilities and technological innovation of large enterprises.
Inside the photovoltaic industry, there is a curse of "the boss must die." For example, Wuxi Suntech, the world's largest PV module and panel manufacturer, has been bankrupted and restructured. The world's largest polysilicon chip maker LDK has been transferred at a low price this year. Yingli, the world's largest PV module supplier, has just been delisted from the NYSE. Trina Solar, which has become the world's largest supplier of PV modules, has also been delisted.
"This seems to be a curse of the industry. The boss will fall down in a few years, and it will fall very badly. Everyone is watching and seeing which big company will fall down first." Guo Yizhen, who has worked, said that in 2016, Jinko Energy became a global supplier of solar photovoltaic modules. “Thanks to our global layout, Jingke was relatively less affected by the New Deal. It is currently full, but everyone is watching. Future market trends."
The leading enterprises are large in scale and strong in technology. They should have stronger market competitiveness and anti-risk ability. The curse of "the boss must die" is puzzling. Guo Yizhen said that the leading enterprises in the photovoltaic industry have developed rapidly under the subsidy policy and relatively loose financing environment. The management may not keep up with it, and it does not necessarily have core technology or strong innovation capability. Under the general environment of subsidy reduction and tightening of financing environment, the challenges faced by leading enterprises are even more severe.
From the market reaction after the "531 New Deal", large enterprises have large investment and high debts, and the problems they face are more prominent than those of small enterprises. In the eyes of more industry insiders, the “big to death” of the photovoltaic industry is the epitome of “big but not strong” in China's photovoltaic industry. (Reporter Liu Jing Guo Qiang Yu Xianhong)