Prospect Of Photovoltaic Industry

Will this round of photovoltaic passion continue?

What are the latest concerns? This round of PV business cycle, from technology iteration on the supply side to scene expansion on the demand side; From price fluctuations to rapid production capacity, many hot spots continue to contribute passion.

However, terminal demand has not been seriously expressed, especially in centralized power stations. In recent years, due to the influence of silicon materials and other cost factors, the component price does not fall but rises, which becomes the primary factor restricting the realization of downstream demand.

At the same time, the expectations of module price drop and end demand release have been constantly ignited, becoming a new crop of expectations to maintain enthusiasm in the PV industry.

Expectation a day is not fulfilled, passion a day to rest.

01

Component prices constrain demand performance

Since last year, the photovoltaic industry has flourished in the wave of "carbon neutrality", with surging capital and exploding expectations. The price of the manufacturing end has risen sharply, which has seriously restricted the downstream installation demand.

In 2021, due to the impact of rising PV module prices, global and domestic PV installations fell short of expectations. Global PV installations grew by 30% year on year, while domestic PV installations grew by only 14%, among which centralized power stations declined by 27%, and the main growth came from household PV with stronger price bearing capacity.

In the first half of this year, prices in the industrial chain were slightly stable, and photovoltaic installations picked up.

From January to June 2022, the newly installed domestic PV capacity was 30.88GW, with a year-on-year growth of 137%, among which centralized PV capacity was 11.22GW, with a year-on-year growth of 109%; Distributed PV 19.65GW, up 157% year on year.

In addition, due to the Russia-Ukraine war and energy crisis, overseas demand for photovoltaic installation is strong. From January to June 2022, China exported 78.6GW of modules, up 74% year on year.

However, the demand picked up slightly, the industrial chain game immediately upgraded, upstream prices rose, component prices did not fall but rose, so far this year all the way up.

At present, the quotation of some components exceeds 2.0 yuan /W, and the investment yield of the power station has reached the bottom line. Terminal installation demand again ushered in wait-and-see, component export growth has also slowed.

The component price above 2.0 yuan /W also fails to prevent some downstream demand from paying. The high price tolerance and high yield tolerance also indicate the strong potential demand of photovoltaic downstream.

Photovoltaic warming trend, once again to be contained, the industry once again into a stalemate.

02

The end-demand picture remains unclear

Photovoltaic demand stars sea, is the hope of the photovoltaic industry.

Today, short-term demand is being held back by high upstream prices, and demand release is being delayed. At present, it is still difficult to judge the timetable for the acceleration of demand release.

On the one hand, the price of silicon materials has been delayed, and recently it even reached a new high. The transaction price of single crystal dense materials has exceeded 300,000 yuan/ton. Despite the continuous release of new silicon production capacity, but due to the epidemic, power rationing, maintenance and other factors, coupled with the cruel industry chain game, silicon materials in recent years, the price performance of the photovoltaic industry is "cunning", "eat dry squeezed" potential, the future price will not be smooth road.

In addition, the recent cancellation of preferential electricity prices in some areas, energy consumption costs began to become a new variable in the cost of photovoltaic manufacturing, which is a new footnote. There may be other unpredictable cost variables that spring up, making the path back down for component prices uncertain.

No. On the other hand, the public has been stressed that a new round of photovoltaic industry boom, the manufacturing cost burden "fancy" diversified and complicated, such as storage costs do not fall for lithium carbonate prices rose, direct and indirect costs of investors, contributed to the power station of the development of photovoltaic power station friction costs rising, also become the future power demand growth variables.

As a result, the industry continues to face a difficult situation of unpredictable demand for PV, and there is a wide divergence in the estimates of installations in China and globally this year and next, despite the overall expectation that "demand is about to accelerate".

03

Nebulous demand continues capital enthusiasm

Uncertainty is good for capital.

There is uncertainty, there is resilience, there is the opportunity to reshape the industrial pattern and curve overtaking, and you can also enjoy a higher valuation. It's all cashed in and valuations are back to normal as far as the eye can see.

In the past few years, the photovoltaic industry has shown a lot of resilience, especially the elasticity of technology iteration and capacity supply, while the demand side has not welcomed the release of demand matching the supply side of "big work fast".

In this process, even a partial release of demand is enough to excite the whole market. First, the household PV boom started last year, and second, the export of distributed PV/energy storage has exploded this year.

Comparatively speaking, centralized photovoltaic power stations, as the main force of photovoltaic, have been lukewarm during the high-profile promotion of the concept of "carbon neutrality" in recent years.

And this good information to delay cash, may be able to further continue the capital passion of the photovoltaic industry.

Although always expected, never satisfied, but will come, will be satisfied, but it is difficult to predict the exact pace and schedule.

The resilience and opportunity of the demand side will also be destined to embrace the strategic opportunity of the component segment, and no one will give up the capital along the way. It is not difficult to understand that the competitive landscape of the component segment has suddenly become lively and sensitive at this point in time.

In short, the fall of the component price, the release of terminal demand, become the new crop of expectation of the photovoltaic industry, boots do not fall one day, passion does not dissipate one day. High component prices may not be a bad thing.