Photovoltaic: When the benefits are exhausted, when will the benefits come?

From the current situation, the phrase "all the benefits are good" seems to be inappropriate to describe the development of China's photovoltaic industry. This can be seen from the performance of listed companies in the photovoltaic industry in the capital market in recent months. If it is said, the National Development and Reform Commission, the Ministry of Finance, and the National Energy Administration jointly issued the "Notice on the Adjustment of Photovoltaic Power Generation in 2018" (hereinafter referred to as the "531" New Deal) to provide a new development direction for the industry; if it is, historical experience It shows that Chinese photovoltaic people who have gone through hardships and remain infatuated can always survive the cold winter after dormant; if it is said that photovoltaics can really develop healthily and stably after getting rid of the constraints of subsidies, then the arrival of "goodness" may be possible. period.

Li Chuangjun, deputy director of the New Energy and Renewable Energy Department of the National Energy Administration, said, “my country’s photovoltaic power generation has gone through stages of growth, industrialization, and large-scale development. The current development focus needs to shift from expanding scale to improving quality and efficiency, and advancing technology. Progress. From a perspective that is more conducive to healthy and sustainable development, we need to focus on promoting technological progress, reducing power generation costs, reducing subsidy dependence, optimizing the scale of development, improving the quality of operation, and promoting the orderly and high-quality development of the industry." Perhaps this will Become the basic idea of ​​photovoltaic power generation development this year and for a period of time in the future.

Photovoltaic coming-of-age ceremony

A few days ago, the International Energy Agency (IEA) released data indicating that global investment in renewable energy decreased to US$318 billion in 2017, a year-on-year decrease of 7%. The International Energy Agency has sounded the alarm about the "pause" of clean energy development. In addition, the International Energy Agency believes that the decline in investment in this field will continue into 2018, which will threaten energy security, climate change and air pollution prevention.

According to data from the World Energy Investment Report, the proportion of fossil fuel investment increased in 2017, reaching 790 billion US dollars. This is the first increase since 2014 and has a profound impact on the current global energy development trend. In recent years, although investment in the coal-fired power generation industry has decreased significantly, the level of oil and natural gas consumption has risen step by step. Fatih Birol, Director of the International Energy Agency, commented on the decline in renewable energy investment: “The decline in investment is disappointing. What’s more worrying is that this trend will continue into 2018. Be vigilant.” If the climate goals are to be met on time, the share of fossil fuels in energy investment should be reduced by 40% by 2030, but in 2017 there was a slight increase, reaching 59%. Globally, the total energy investment in 2017 was approximately US$1.8 trillion, a year-on-year decrease of 2%, and the proportion of investment in the power industry was higher than that of oil and gas for two consecutive years.

From the perspective of the domestic situation, the China Electricity Council recently released data showing that in the first half of this year, the country’s infrastructure construction added 52.11 million kilowatts of power generation capacity, including 2.49 million kilowatts of hydropower, 15.15 million kilowatts of thermal power, 1.13 million kilowatts of nuclear power, and 7.53 million kilowatts of wind power. Solar power generation was 25.81 million kilowatts. Solar power generation was 2.19 million kilowatts more than the same period last year. The new power generation capacity of solar power generation accounted for nearly half of the new power generation capacity of the national infrastructure. The data shows that although China's new energy industry represented by photovoltaics and wind power has achieved rapid development, its development content and trends have shown different situations. Affected by the slowdown in new construction and the decline of subsidy policies, the photovoltaic industry is facing severe challenges in reducing power generation costs, optimizing the scale of development, and improving operation quality; the wind power industry is accelerating the development of offshore wind power and distributed wind power, which has been continuously With the decline in installed capacity in the past two years, the situation has been reversed.

The "531" New Deal was issued on the eve of Children's Day, and China Photovoltaic ushered in the coming-of-age ceremony.

The photovoltaic industry generally believes that the fundamental reason for the introduction of such a strict New Deal is that the subsidy pressure is too great and it is difficult to solve it in the short term. For many years, China has mainly adopted the method of "benchmark electricity price + financial subsidy" to promote the development of the renewable energy industry. The subsidy fund comes from the additional electricity price of renewable energy, which is charged with the electricity fee. However, with the rapid increase in photovoltaic installations, the subsidy gap continues to expand. According to statistics, as of the end of 2017, the renewable energy subsidy gap has reached 100 billion yuan.

Many analysts predict that under the influence of the New Deal, China’s newly installed photovoltaic capacity may drop to 35 GW in 2018. In comparison, China’s new installed capacity last year was 53.06 GW. The substantial shrinkage of new installed capacity will undoubtedly put huge pressure on the domestic photovoltaic manufacturing industry, and it is inevitable that a new round of industry reshuffle triggered by equipment price reductions will be inevitable. Large enterprises that are in the first echelon of the industry and have strong cost control capabilities can obtain support from foreign markets, while small and medium-sized enterprises can hardly survive the industry winter.

Analysts believe that the intention of this policy adjustment is to reduce the gap in subsidies for incremental projects and make the photovoltaic industry develop more healthily. The competent authorities are "actively piercing the bubble" to avoid the risk of a larger subsidy gap. This round of photovoltaic "parity grid cycle", which will be launched after 2020, will simultaneously start the third generation of energy with "wind and solar storage" as the core and the second generation of energy with "coal oil and gas" as the core for the global energy landscape. substitute. When commenting on the New Deal, the China Photovoltaic Industry Association also pointed out that under the new normal of excessive subsidy pressure and the country is still vigorously reducing the cost of social electricity, it is bound to be unsustainable. During the last round of changes in the photovoltaic industry, a group of truly high-quality companies were refined. It is hoped that this round of changes can help the entire industry to improve itself before the bargaining ceremony.

Industrial chain "cold winter"

After the "531" New Deal, the photovoltaic industry industry chain collectively entered a freezing period, and the price of the lucrative silicon material end fell precipitously, and there was no market. After the release of the New Deal, analysis data from the Silicon Industry Branch showed that "For the entire Chinese polysilicon photovoltaic industry, the "531" Photovoltaic New Deal has become the third and most significant crisis in the industry after 2008 and 2012. The domestic first-level compact The price of raw materials has fallen by 25.5% within one month. The sharp decline in terminal demand and the rapid decline in prices have forcibly accelerated the arrival of a new round of reshuffle of the polysilicon industry. High-end production capacity. At present, outstanding enterprises are in the stage of reducing costs and increasing efficiency and investing in research and development. The terminal market at this key node has shrunk sharply, which has caused some domestic enterprises to delay or even suspend technological transformation and high-quality expansion projects, and continue to invest in research and development confidence and confidence. The driving force is gradually disappearing. If prices and costs remain upside down for a long time, excellent companies will also lose their blood-making and growth capabilities. The polysilicon industry that has developed after ten years of hardship will once again be in desperation." According to Caixin reports, the impact of the "531" New Deal has already been reached. Spread to the entire industrial chain. The photovoltaic industry chain can be roughly divided into upstream polysilicon, silicon wafers, midstream solar cells, modules, and downstream power stations. For photovoltaic upstream polysilicon companies, most polysilicon manufacturing companies have decided to intensively arrange production line maintenance plans from June to September to control production capacity.

In fact, since 12 polysilicon companies chose to overhaul or suspend production in June, the capacity involved in overhaul reached 82,500 tons/year, accounting for 27.7% of the total domestic production capacity, resulting in a significant reduction in supply. According to the overhaul plans of various companies, the domestic polysilicon production in July will be further reduced to about 16,000 tons, and the supply of OCI and HKS from overseas companies will also decrease, which will help the market supply and demand to further improve. On July 23, the transaction price of solar special-grade dense material, the transaction price of solar first-grade dense material, and the transaction price of solar first-grade cauliflower material all increased, with an increase of 0.21% to 1%. This is the first time since June that polysilicon quotations have stabilized and rose. Prior to this, polysilicon quotations had fallen for six consecutive weeks.

In the first week of August 2018, the price range of domestic polysilicon super dense materials rebounded to 90,000 yuan/ton to 98,000 yuan/ton, with an average price of 95,000 yuan/ton, an increase of 0.96% on a week-on-week basis. The mainstream price of polycrystalline silicon wafers ranges from 2.40 yuan/piece to 2.80 yuan/piece, and the average price remains at 2.45 yuan/piece; the mainstream price of monocrystalline silicon wafers ranges from 3.15 yuan/piece to 3.26 yuan/piece, with an average price of 3.18 yuan/piece, week-on-week A decline of 2.15%. It is understood that some companies have already signed all the orders for August at the end of July, and there is no margin available. Most companies have signed more than 80% of the orders in August, and the balance is expected to be signed next week. Although the overall silicon material transaction volume this week decreased slightly compared to last week, the price of polysilicon continued to stabilize and rebounded slightly due to the continued supply shortage.

At present, there are 11 domestic maintenance companies with a production capacity of 131,500 tons/year, of which 4 are 10,000-ton enterprises. It is expected that the production will resume in September. In August, one new maintenance company was added compared to the original plan. The overall silicon material supply decrease rate will be slightly increased from 14% to 22%. The monthly supply is expected to decrease to 14,000 to 15,000 tons, plus overseas OCI and HKS is also during the maintenance period. The shortage of silicon material supply in August becomes more and more obvious. Therefore, it is expected that August will not be a price turning point, and the market can still maintain stable operation.

"If the overall demand rises in the future, polysilicon prices will rebound, but the rebound will not be too great, because after the rebound, existing polysilicon companies will load up to meet the new market demand. And if the overall demand continues to decline, polysilicon companies will Will continue to park for maintenance, reduce market supply, and achieve a new balance between supply and demand. Therefore, the price increase and decrease are relatively limited." The person in charge of the polysilicon company told the public media.

The hit household market

Public information shows that tens of thousands of dealers and hundreds of thousands of users participating in households are the most ordinary people, and their ability to withstand blows is far lower than that of enterprises. Under the trend of scale restrictions and declining subsidies, a large number of household dealers have withdrawn. Behind the cessation of the development of the industry are the usual reasons for the uneven quality of household photovoltaic products and the lack of operation and maintenance of power stations.

After the public information is summarized, it can be seen that the power supply companies of various provinces do not seem to be "friendly" to the grid-connected policies of distributed photovoltaics: On June 6, the State Grid Hebei Electric Power Co., Ltd. issued a notice, since June 1, 2018 Since the beginning, the state subsidies for distributed photovoltaics will be stopped. According to news from Jiangsu household photovoltaic distributors, Wuxi area no longer accepts new household photovoltaic projects. Household photovoltaic projects that have been applied for before June 1 but have not been connected to the grid will not be accepted temporarily. Jurong, Jiangsu suspends all distributed photovoltaic acceptance business, and the accepted projects can continue to be connected to the grid, but users who are connected to the grid after May 31 will not be able to enjoy the 0.37 yuan state subsidy. Shandong has basically stopped the handling of distributed photovoltaics, and residents of distributed photovoltaics must sign a letter of commitment to give up subsidies if they want to connect to the grid. Another regional power grid company issued a customer notice, stating that countries with distributed projects connected to the grid after May 31 will not be able to receive subsidies. With the exception of Shandong, Jiangsu, and Hebei Province, the following regions have clearly not accepted applications for grid connection for the time being: Xuchang, Henan: applications for photovoltaic grid connection will not be accepted for the time being. Chaoyang, Liaoning: Grid-connected will not be granted with subsidies, and grid-connected without subsidies. Shanghai: It is reported that the Shanghai region has decided to suspend the advance payment of subsidies. However, Songjiang District in Shanghai recently issued a document saying that it has introduced a district-level subsidy of 0.2 yuan for photovoltaics for two consecutive years.

According to the new policy, the domestic market will be suppressed to 25 GW in 2018 (25 GW = distributed 10 GW, leader + photovoltaic poverty alleviation 10.7 GW, in 2017, the general power station project is about 5 GW), only 2017 47% of the 53 GW in the year, the domestic and foreign markets will not exceed 65 GW. The limitation of scale will inevitably result in idle production capacity of the photovoltaic manufacturing industry. According to industry estimates, the number of household projects affected nationwide may reach 60,000 to 80,000. After the 531 New Deal, some household enterprises turned to small and medium-sized industrial and commercial distributed, but the difficulty faced by industrial and commercial self-use is the difficulty in collecting electricity fees. Some turned to various photovoltaic +, such as photovoltaic + heating, photovoltaic + energy storage, and inverter vendors. Increase efforts to develop overseas markets.

"The last chance"

In this new policy, the National Energy Administration strictly controls various indicators, but there is only one exception: photovoltaic poverty alleviation. Even though ordinary projects and distributed projects have been "cooled", photovoltaic poverty alleviation projects have been supported as always. The benchmark electricity price of village-level photovoltaic poverty alleviation power stations (0.5 MW and below) in line with national policies remains unchanged. In the second half of this year, the village-level photovoltaic poverty alleviation project will become the industry's "sweet steamed bun". Regarding the total amount of this part of the project, it is currently uncertain, but in the second half of the year, this part of the project will become a battleground for photovoltaic companies.

The "531" New Policy states: "Support photovoltaic poverty alleviation. Implement the requirements of targeted poverty alleviation and targeted poverty alleviation, solidly promote photovoltaic poverty alleviation, and release the second batch of photovoltaic poverty alleviation projects in the "13th Five-Year Plan" in a timely manner under the premise of implementing implementation conditions and strict audits in all regions Plan.” According to the “Thirteenth Five-Year Plan”, the poverty alleviation target for 2018 will be around 8 GW. The first batch of photovoltaic poverty alleviation scale was 4.186 GW. The centralized poverty alleviation power station was connected to the grid before 630, and the village-level poverty alleviation power station was completed by the end of the year. According to the scale issued in previous years, the scale of the second batch of poverty alleviation projects was about 4 GW, and the total annual total was about 8 GW.

But what needs to be worried is that after the release of the new "Management Measures for Photovoltaic Poverty Alleviation Power Stations" this year, photovoltaic poverty alleviation power stations are not allowed to build debts and enterprises are not allowed to invest in shares. This is equivalent to cutting off the financing line of poverty alleviation projects, which means that the financing of photovoltaic poverty alleviation projects will not be solved through financing, and the local government needs to fully bear it. Therefore, the number of poverty alleviation power stations that can be built has nothing to do with the enterprise, but is affected by factors such as whether the local area is suitable for photovoltaic poverty alleviation, the number of local poor households, and the funds of the local government. But for a photovoltaic power plant project, there is no financing channel will bear a lot of financial pressure. The new policy stipulates that the local government unilaterally assumes the funding issue, which may undermine the government's enthusiasm for developing photovoltaic poverty alleviation projects.

In addition, the front runner project also showed the vitality of survival in the cracks. Ten application leader bases in the third batch of leader bases have completed the enterprise optimization work and have now fully entered the implementation stage. According to the policy, the application leader base needs to start construction before June 30 this year. A total of 5 gigawatts of application leader projects are also starting to become critical to the market in the second half of the year.

In view of "considering the obvious effect of the construction of the leading base, the fourth phase of the construction of the leading base will be launched in the second half of the year, and the construction of the leading base will be regarded as the main position and important method for the construction of ordinary power stations", the industry also believes that the fourth phase of the leading base The scale of construction may reach about 10 gigawatts. According to the third-phase leader implementation plan, each leader base has a scale of 500,000 kilowatts, and the 13 bases including the application leader base and the technology leader base total 6.5 million kilowatts. The "Guiding Opinions of the National Energy Administration on the Implementation of the 13th Five-Year Plan for Renewable Energy Development" planned for each phase of the leading base to control 8 million kilowatts. In other words, the third-phase leader still has a remaining 1.5 million kilowatts indicator that has not been issued. This part of the scale may be incorporated into the construction scale of the fourth phase of the leader base, so the construction scale of the fourth phase of the leader base may reach 9.5 GW. Some people predict that in the future, ordinary photovoltaic power plant projects may be based on the current front-runner project as a blueprint for investment and construction. In short, ordinary power station projects will be the leader.

In addition to photovoltaic poverty alleviation projects and front-runners, Tibet has also become a "treasure land" discovered by people in the process of policy research. The "531" New Deal pointed out that according to the actual development of the industry, the construction scale of ordinary photovoltaic power plants in 2018 will not be arranged for the time being. Before the state has issued a document to start the construction of ordinary power stations, all localities shall not arrange in any form for the construction of ordinary power stations that require state subsidies. The National Energy Administration stated that, based on the current development reality, it is clear that the construction scale of ordinary power stations in various regions will not be arranged for the time being, including provinces (except Tibet) that can independently manage the construction scale of the region according to previous documents.

According to the "2017-2020 New Construction Scale Plan for Photovoltaic Power Stations" issued by the National Energy Administration, the 7 provinces (autonomous regions and municipalities) of Beijing, Tianjin, Shanghai, Fujian, Chongqing, Tibet, and Hainan have not set the upper limit of the construction scale. It can manage the construction scale of photovoltaic power stations in the region by itself, and construct them in an orderly manner in accordance with the regional energy planning, market consumption and other conditions. Although the release of the "531" New Deal has completely overturned this regulation and reclaimed the right to the scale of the provinces, only Tibet is left, which seems to mean that this is one of the most abundant solar energy resources in the world, where solar energy resources are located. Although the conditions are difficult, the plateau region, the country's number one, has a vast space for photovoltaic development.

Finally, although the content of the new policy on subsidy reduction has made the industry "weaning" and stopping "hematopoiesis", the state "encourages all localities to issue policies to support the development of the photovoltaic industry in accordance with their actual conditions, and arrange their own arrangements according to the conditions of connection and consumption and related requirements. Various photovoltaic power generation projects that do not require state subsidies.” According to incomplete statistics, as of now, 12 provinces including Zhejiang, Guangdong, Anhui, Jiangxi, Hubei, Hunan, Shanghai, Beijing, Jiangsu, Shanxi, Hainan, and Fujian have issued subsidy policies. And is still executing. Zhejiang is the most prominent. In addition to provincial subsidies, there are 8 cities and 20 districts and counties that have introduced electricity price subsidies or initial investment subsidies. In addition, Dongguan, Foshan, and Chancheng in Guangzhou, Hefei, Huainan, Huaibei, and Ma'anshan in Anhui, Nanchang, Shangrao, and Yichang in Jiangxi, Huangshi in Hubei, Changsha in Hunan, and Yancheng in Jiangsu , Jincheng in Shanxi, Sanya in Hainan, Quanzhou in Fujian and other places have introduced electricity price subsidies or initial investment subsidy policies.