The photovoltaic industry is firmly committed to the trend of parity in 2018 from two dimensions
Affordable Internet access is the foundation for the PV industry to break the indicators, subsidize the ceiling, and break through the larger market space. The upstream manufacturing links and downstream investment operations are all working hard to reduce the price and increase efficiency.
From the perspective of investment, in 2018, we believe that the photovoltaic industry can be arranged around two dimensions: 1. The short-term demand increase greatly promotes the increase of the gross profit margin of the flexible silicon material link; 2. In the medium and long term, the enterprises with cost advantage grasp During the time window, capacity expansion will drive the industry closer to the oligopoly. The silicon wafer single polycrystal begins to distinguish, the single crystal diamond wire cutting + PERC cost and efficiency advantages are significant, is rapidly replacing the polycrystalline share.
After the "630", the industry's long-term growth drivers have been highlighted
In the first three quarters, domestic PV installations achieved 43GW, and it is estimated that approximately 50 GWs will be installed throughout the year, of which about 30GW is for ground power stations and about 20GW for distribution. Compared with the installed capacity last year, the installed capacity of the ground power station is basically flat, and the distributed installed capacity is 4-5 times. On the one hand, this change is due to the subsidy reduction of the ground power station, and the distributed electricity gain is high; on the other hand, it is important because the ground power station index shrinks. The reduction of PV subsidies is based on the decline of system cost. The investment rate of power station investment has little impact on investment enthusiasm. The main factor affecting the growth of installed capacity of ground power stations is the indicator. Therefore, according to domestic demand, according to the 17- to 20-year index issued by the Energy Bureau, we predict that the installed capacity of the ground power station will be around 25GW next year, with a distributed growth of 50%. It is estimated that the total installed capacity will be about 55GW next year.
The growth rate of distributed PV installations is much higher than industry expectations, and household distribution driven by poverty alleviation is far beyond industry expectations. Distributed, front-runners, and photovoltaic poverty alleviation have formed a troika that supports domestic PV demand. It is expected that the annual PV installation is expected to reach a new height of 50 GW.
The domestic PV market has undoubtedly become the world's largest downstream application market. Since 2013, the global downstream market demand has been the first for four consecutive years, and the cumulative installed capacity has been the first in the world for two consecutive years. In 2016, the domestic new installed capacity of 34GW, the global installed capacity of 77GW, the domestic market share of more than 44%, this year is expected to be more than 50GW domestic installed capacity, the world is expected to install 90-100GW, the domestic downstream market will account for more than half of the world.
The enthusiasm for investment in photovoltaic power generation is not unique in China. In the United States, India, and emerging markets for photovoltaics, downstream installations are also in high demand. By comparing the new installed capacity changes in the world's major PV application markets from 2010 to 2016, it can be seen that the installed capacity of mature markets in Europe and Japan has stabilized or even declined; China, the United States, and India are still growing at a high rate; other emerging countries are also slow. Slow release demand. In 2017, China, the United States, and India's three fast-growing markets are expected to reach 50GW, 18GW, and 8GW installed capacity. Due to the hot demand in the Chinese market and the US 201 bill investigation to promote pre-strength, the supply of extruded components to the Indian market may lead to The Indian market is below the 10 GW installed capacity plan.
In addition, the growth rate of the global emerging photovoltaic market cannot be underestimated. According to a group of data from the China Photovoltaic Industry Association, there are currently 24 countries and regions with an installed capacity of more than 1 GW in emerging markets, and 112 countries and regions with a scale of more than 10 MW. There are 176 countries that have set PV policy targets. The installed cost of photovoltaic systems is rapidly declining. More and more countries and regions are in the condition of developing photovoltaic power generation. Emerging markets will be one of the main drivers for new PV installations in the world.
Domestic PV manufacturing capacity accounts for more than half of the world. Driven by the strong demand in the global downstream market, the capacity utilization rate of all links in the industrial chain has increased significantly, and the output has increased substantially. According to the data released by the China Photovoltaic Industry Association, by the end of the third quarter, the photovoltaic industry chain polysilicon materials, silicon wafers, battery chips, and modules produced 170,000 tons, 62 GW, 51 GW, and 53 GW, respectively, up 17%, 44%, and 50%. , 43%.
Drivers of increased industry demand
The factors affecting the enthusiasm of PV investment are the internal rate of return of power station investment. The most important factors affecting the rate of return include: initial investment cost, operation and maintenance and financing costs, and power generation benefits. The downward price of photovoltaic grids has become a normalization, and the benefits of power generation have been down to the level of firepower. The theoretical unit revenue of photovoltaic power generation projects will continue to decline in the future.
Assuming that the operation and maintenance costs and financing costs are certain, the factors that affect the power generation revenue in actual operation include the number of hours of power generation (whether there is a problem of power-off and power-off) and subsidy issues.
From the perspective of initial investment, the faster the initial investment cost declines, the higher the internal rate of return. The initial investment cost decline rate at the beginning of the period is enough to make up for the decline in benchmarking price, and the PV power plant investment income will be higher and higher.
Therefore, the internal driving force of investment in the photovoltaic industry is related to the problems of initial investment cost reduction, benchmarking price adjustment, improvement of light-restriction and power supply, and subsidy payment. At this stage, the demand for the industry continues to rise. It is due to the rapid decline in the installed cost of the system. It is enough to make up for the benchmark price cut. The parity online is worth looking forward to; the policy cleans up the problem of subsidies, subsidies, etc., breaking the ceiling of the industry subject to indicators and subsidies, and releasing More space.
National policies clean up the obstacles to rapid development of the industry and open up more market space
In 2016, the problem of domestic PV light-reducing power cuts began to deteriorate. The policy began to guide the transformation of photovoltaic construction from the western owed areas to the central and eastern regions, and the centralized ground power plants to distributed. In December 2016, the Energy Bureau issued the “13th Five-Year Plan for Solar Energy Developmentâ€, which we summarized in the comments as four key words: optimized layout, industrial progress, economy, and diversification.
Future installed space calculations: enthusiasm will continue
Since the recovery in 2013, the year-end data of domestic and global PV installations has exceeded expectations. On the one hand, the huge domestic terminal market is rapidly emerging; on the other hand, the global market for photovoltaics is decentralized, mature, stable, fast-growing, and emerging potential. The combined diversified market is taking shape, and the PV policy-driven ups and downs are reduced, truly switching to high-growth industries.
The installed cost of photovoltaic systems is currently declining by more than 10% per year. More and more countries are investing or preparing to invest in the development of photovoltaic power generation; in mature markets, more and more application models are beginning to be economical. We believe that by 2020, China will remain the main market for global PV applications. Distributed, photovoltaic poverty alleviation and front-runners will drive the second wave of rapid growth in domestic demand. The European and Japanese markets have stabilized. The US market has overdrafted some of the 2018 indicators this year, which will reduce the installed capacity in 2018. However, in the medium and long term, the US new market capacity is very impressive.
Compared with the European and American markets, the price of photovoltaic products in the Indian market is relatively low, and the products exported by enterprises to India are lower than the gross profit margins of Japan, Europe and the United States. The Indian market is a fast-growing application market that cannot be ignored. However, under the global demand for downstream demand, the market share with lower gross profit margin may be squeezed. Therefore, we predict that although India plans to install a large amount of PV, the supply of components in 2017 may be squeezed, and the new installed capacity is expected to be around 8GW.
According to the current monthly data of the domestic market, the enthusiasm for installation after "630" is still very high. In June and July, the data was distorted due to the impact of the "630" pre-emptive and deferred effects. In August and September, the return to normal, the monthly installed capacity is still higher than the first half, which is enough to prove that after the "630", although the benchmark price is lowered, the system installed cost is reduced enough to make up for the impact of the price cut on the investment return rate of the power station. Usually the fourth quarter is the peak season for photovoltaic installations. The enthusiasm for new signing is not reduced, which is obviously higher than the heat of the third quarter. Demand from the American market is still high. Therefore, from the fourth quarter to the next year, domestic PV installation demand is still considerable.
After supporting the "630" benchmark price cut, domestic demand is the leader, distribution and poverty alleviation.
The photovoltaic industry has quietly changed. It is no longer a market change in the past. In the era of global industry injury, the photovoltaic industry reached its peak in Europe in 2011, and may reach its peak in China in 2017. But globally, industry investment is near The past few years have been upwards as emerging markets are on the rise. Bloomberg New Energy Finance's latest second quarter clean energy investment data, investment of 63.8 billion hit a new high since the second quarter of 2016, up 21% from the previous month. This mainly benefited from the US$2 billion investment in the two major PV projects in the UAE; US and Chinese investment increased by 51% and 32% respectively compared with the previous quarter, Mexico, Australia and Sweden increased sharply, and Egypt and Argentina reached record highs. Global clean energy is welcoming.
We believe that the global PV market is decentralizing. The fluctuation of one market may cause some fluctuations in the PV industry chain, but it is far from being able to cause a cold winter impact. Industry costs have fallen faster than expected, ceilings for subsidies and indicator limits have gradually increased, and more and more emerging markets have begun to invest in PV. The industry is gradually getting rid of subsidies and relying on market-driven growth. It is estimated that by 2020, China, the United States, India and the global installed capacity will reach 75GW, 22GW, 25GW, 151GW; the domestic compound growth rate will reach 21.43%, and the global compound growth rate will reach 18.42%.
Find the most flexible and profitable link
The photovoltaic industry chain includes “polysilicon material-silicon wafer-cell chip-component-power station terminalâ€, in which polysilicon material, silicon wafer, battery and component belong to the manufacturing process, and the investment operation of power station terminal belongs to the downstream application. The earliest entry in China is component foundry. At present, domestic enterprise participation has extended from the most downstream components to the upstream. The earliest domestic companies made components and later made batteries. Now slowly transfer the low-value assembly to Malaysia, Indonesia, Vietnam and other countries.
At present, photovoltaic manufacturing has achieved localization in the entire industrial chain, and leads the global new technology and total production capacity. The domestic production capacity of silicon wafers, batteries and components has already accounted for more than half of the global production capacity. The production capacity of polysilicon, silicon wafers, cell chips and modules accounted for 48.5%, 86.5%, 68% and 74.1% of the global production capacity respectively. Only the polysilicon material production capacity was less than half of the global production capacity.
In the first three quarters of this year, market demand was soaring, and the output of photovoltaic products increased greatly. Among them, polysilicon, silicon wafers, batteries and modules produced 170,000 tons, 62 GW, 51 GW, and 53 GW, respectively, up 17%, 44%, 50%, and 43%. The output growth of silicon wafers, battery chips and modules is between 40-50%, while the release rate of polysilicon materials is relatively slow due to factors such as overhaul, environmental supervision and import restrictions. In the middle and lower reaches. This led to the rise in the price of silicon materials in the first half of the year, and the level of gross profit margin of silicon material manufacturers continued to increase.
The second thing worth paying attention to is the silicon segment. Single polycrystal is distinguished in the silicon wafer segment. Due to the single crystal PERC+ diamond wire cutting, the cost reduction and efficiency improvement, Longji's current non-silicon cost of silicon wafer has been reduced to 1.5-1.6 yuan / piece, Longji Leye single crystal PERC battery The highest conversion rate has reached 23.26%. The increase in polycrystalline PERC efficiency is less than that of single crystal, and the problem of surface light reflection in polycrystalline wire cutting requires polysilicon technology. Therefore, at present, the substitution advantage of single crystal PERC+ diamond wire is very obvious, and the gross profit margin is higher than polycrystalline, and the replacement trend is clear in the short term.
The battery chip and component links were compressed by the upstream silicon material and silicon wafer prices, and the downstream price was compressed. Although the sales volume of many enterprises increased, the sales volume declined. Even some low-end products of the enterprise PV business began to lose money. In the first half of the year, 20% of enterprises were in a state of loss.
According to the gross profit margin statistics of the latest corporate announcements, as shown in the following figure, Tongwei and Daquan, which have the highest gross profit margin, are polysilicon links; Longji shares and GCL-Poly are second, located in the silicon segment; Artes and Tongwei batteries are compared. Part of the decline in the first two links is the battery segment; GCL integration, Jingao, Jingke, Yingli have lower margins, mainly in the component link, or vertical industrial integration structure and sell component terminal products.
Therefore, the level of gross profit margin has also been verified. At present, the highest profit level is the upstream polysilicon link; the silicon wafer is the second, the monocrystalline silicon wafer has a higher gross margin than the polycrystalline; the battery and component business segments are squeezed by the upstream and downstream prices. The gross profit margin is at a low level.
Silicon material - profit space and market space coexist
The polysilicon material link is currently less than half of the domestic production in the photovoltaic industry chain. In 2016, domestic polysilicon production was 194,000 tons, accounting for 48% of the global total. However, due to the domestic silicon material downstream – wafer production capacity exceeds 80% of global production capacity, domestic polysilicon still relies on imports. This year, downstream demand surged, polysilicon production capacity was released slowly, and prices continued to rise. Currently at 150,000/ton level the above.
At present, the largest production capacity is Germany WACKER, which has a production capacity of 56,000 tons in Germany and 20,000 tons capacity in the US; followed by South Korea's OCI, with a capacity of 52,000 tons in South Korea and 0.8 million tons in Malaysia; the largest domestic capacity is in Jiangsu. Can (Golly GCL, 03800), the capacity reached 70,000 tons. At present, the world's three largest polysilicon companies are WACKER, OCI, and Jiangsu Zhongneng.
At the end of 2016, the domestic wafer production capacity was 81.9GW and the output was 64.8GW. As of the third quarter, the production of silicon wafers is 62GW, and it is expected to reach 80GW output in the whole year, corresponding to about 432,000 tons of silicon material in China. In the first three quarters, domestic polysilicon production was 170,000 tons and imports were 118,400 tons.
In 2017, the domestic silicon wafer output will reach 75GW, which corresponds to about 380,000 tons of silicon. According to the plan of expanding the production of major leading enterprises, domestic wafer production capacity will exceed 100GW in 2018. Assuming that the global downstream installed capacity will grow steadily next year, the domestic silicon wafer capacity utilization rate will remain at 85%, corresponding to a silicon wafer output of about 85GW. Considering the decline in the use of monocrystalline silicon wafers, it takes about 400-42 million tons of silicon capacity.
In addition to the domestic demand for polysilicon, imported polysilicon replacement can also free up some space.
Domestic polysilicon production capacity has also been oversupplied. Demand in Europe before 2012 was booming. The industry was dominated by silicon. Enterprises began to extend upstream from downstream component processing, and silicon production capacity surged. However, with the fall of the European market, the demand for domestic PV products has fallen sharply, and the silicon material link is the first to bear the brunt of the heavy asset industry. The enterprises that invest heavily in silicon materials have not been burdened with heavy burdens.
Therefore, since 2012, the domestic silicon material capacity expansion rate is very slow. With the rise of domestic downstream demand and rapidly becoming the largest demand market, domestic polysilicon production capacity and demand are getting worse. The price of silicon materials began to rise, and the profitability of manufacturers improved. However, dependence on imports has been high. In 2016, polysilicon imports accounted for 41.21%.
Foreign polysilicon manufacturers are mostly large-scale chemical plants, mastering advanced purification processes, domestic manufacturers have no cost advantage in the past few years. In 2014, China began to impose double anti-tax on polysilicon from the United States, South Korea and the European Union, restricting imports, but the main import companies WACKER (14.3%) and OCI (2.4%), especially South Korea, have lower taxation levels in the past two years. Domestic demand for silicon materials has increased substantially, and import dependence remains high.
According to the current price level of silicon materials and the cost distribution of domestic core silicon material manufacturers, the gross profit margin of polysilicon links is very high, and some enterprises have now exceeded 50%. According to the current installed demand and the release of polysilicon capacity, by the end of 2018, the gross profit margin of polysilicon will remain high.
In the medium and long term, the production capacity of domestic cost advantage enterprises will gradually be released, and the domestic high-cost small-scale production capacity elimination and import substitution will be realized, and the oligopolistic competition pattern will be formed, and the gross profit margin will tend to be stable. The relationship between supply and demand eased, and the price of silicon materials returned to rationality.
Silicon wafers - single crystal replacement trends bring excess profits
As of the end of 2016, China PV Industry Association data show that China's wafer production accounts for 86.63% of the global total. The total production capacity also exceeded 80% to reach 81.9%. The domestic silicon wafer production capacity distribution shows a “one super and many strong†pattern. GCL-Poly is the first group to be led by nearly 20GW of polycrystalline silicon wafer production. The Group of 14 companies represented by Keelung, Jingke Energy, JA Solar and Zhonghuan shares together with GCL-Poly to cover domestic wafers. A share of 83% of production capacity.
In terms of the proportion of single crystal and polycrystalline production capacity, although it is still 16 years, polycrystalline is still a big part. However, in view of the natural advantages of high power generation and low attenuation in many wafers, the industry is generally more optimistic about the future development of single wafers. From the point of view of the cost of electricity, with the development of single crystal growth, the popularity of diamond wire flaking and the conversion efficiency of single crystal cells are constantly refreshing. Ultimately, the goal of diluting costs is achieved. There is reason to believe that the advantages of single crystal competitiveness will become more apparent.
With more and more manufacturers distributing single crystal shares, the existing industrial structure of GCL-Poly may have a rapid change in the next one to two years. For example, Longji, which has been committed to the development and production of single crystals for a long time, began to explore the use of diamond wire cutting in 2013. The use was successful in 2015, and the cost dropped significantly. The PERC was superimposed and the conversion rate increased. Achieved the dual goal of cost reduction + conversion rate improvement.
After the successful application of diamond wire in the single crystal, the cost has dropped drastically. Compared with the sand wire cutting, the cutting cost of the diamond wire has decreased by about 25%. In contrast, the price of wafers cut with sand lines is completely uncompetitive. Longji shares began to test the use of diamond wire instead of mortar wire cutting silicon wafers, 15 years of successful mass production, the cost achieved a significant decline. The company's gross profit margin before the price cut is over 30%, which is higher than the average level of the monocrystalline wafer industry by about 10%.
However, the polycrystalline silicon wafers with mortar line cutting, the gross profit margin level can not be compared with the single crystal; after the diamond fiber modified by the diamond wire, due to the surface light reflection problem, it is necessary to superimpose the black silicon technology to increase the light conversion rate.
At present, the domestic market leader and distributed accelerated single crystal replace polycrystalline, deep-growing single crystal enterprises are expanding production on a large scale, consolidating cost advantages; the original polysilicon wafer enterprises, guided by market demand, also began to expand the single crystal capacity upstream. The trend of replacing single crystals in silicon wafers will continue in 1-2 years.
Reduced investment costs + mitigation of power cuts, improved profitability of power station operators
In the downstream power station, the factors affecting the profitability of the power station are improving. The problem of consumption reduction in western power-limited areas is improving; the seventh batch of subsidies has been reported, and the trial of green certificates is expected to solve the pressure of subsidy gaps; there is a time lag between the downward adjustment of electricity prices and the decline in installed costs, and the new low-cost power plants have higher yields. With the accumulation of various factors, we have seen that the profitability of power station operators is improving.
According to the data of the first quarter, the photovoltaic power limiting rate is easing, but the overall power limiting rate is still high. In the first quarter, the national power generation capacity was 21.4 billion kWh, and the abandoned light limit was about 23 kWh, which was alleviated compared with the annual light rejection rate of 19.81% in 2016. In some areas, the lightening rate was obvious. For example, the light-receiving rate in Ningxia and Gansu was 10% and 19% respectively, down 10% and 20% respectively. The light-receiving rate in Qinghai, Shanxi and Inner Mongolia increased, and the light-receiving rate in Xinjiang was as high as 39%. No significant changes.
Since 2015, the National Development and Reform Commission and the Energy Bureau have tried to solve the problem of power cuts in the western region. At present, measures such as the construction of renewable energy for the UHV route and the near-regional consumption in the region have been put on the agenda.
In December 2016, the National Energy Administration issued the “13th Five-Year Plan for Solar Energy Utilization†to address the problem of eliminating power consumption in power-restricted areas. On the one hand, it is necessary to build a renewable energy power generation base station in an area close to the UHV delivery base; On the other hand, it lists the UHV projects under construction and feasibility feasibility. Among them, Xinjiang, Inner Mongolia, Gansu, Ningxia and Shanxi will have a number of UHVs in operation, and Qinghai and Inner Mongolia will have a number of UHVs. It will alleviate the problem of insufficient power delivery capacity in the northwest region.
The Development and Reform Commission, the Ministry of Finance, and the Energy Bureau of the three ministries jointly issued the "Notice on the Implementation of the Renewable Energy Green Power Certificate Issuance and Voluntary Subscription Trading System" on February 3, planning to carry out legal and voluntary subscription of renewable energy green certificates nationwide. The mechanism is implemented for photovoltaic and wind power generation.
On June 12, the National Renewable Energy Information Management Center released a message. The first batch of green card applications have been issued, including 20 renewable energy power generation projects of Huaneng, Huadian, China Energy Conservation and China Water Consultancy. The green card, which represents a total of 2,391,350 kwh of on-grid electricity, is mainly distributed in six provinces such as Jiangsu, Shandong, Hebei, and Xinjiang, with a total installed capacity of 1.125 GW. From July 1st, the green card will be officially listed on the national green card resource subscription platform. Enterprises can subscribe to the platform and purchase resources to realize green power consumption. Starting from 2018, the renewable energy power quota assessment and the green certificate mandatory transaction will be started in due course.
Two problems that constrain the operation of photovoltaic power plants—distribution of light and electricity, subsidy arrears, are gradually being solved. The profitability of enterprise stock power generation is improving year-on-year; the price of photovoltaic modules has dropped sharply since the third quarter of 2016, from 3.8 in the first half of 2016. /W fell to the price level of 3 yuan / W in the first half of the year, at present, the component price is about 2.8 yuan / W or so. The investment cost at the beginning of the power station dropped significantly. In 2018, while considering the cost reduction and subsidy reduction, the power station investment operation IRR is still at a relatively high level.
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