According to the Global New Financial News of the Economic Voice of China Central Radio and Television Station, the expansion of photovoltaic industry capacity has recently attracted great attention from the market. A number of photovoltaic giants have released industrial chain expansion plans, and many enterprises are cross-border layout of photovoltaic capacity. The industry expects that China's photovoltaic capacity will reach 700 gigawatts this year, much higher than global demand for new photovoltaic installations. What are the reasons for the expansion of photovoltaic capacity? What's the impact? Since late
May, almost all the major photovoltaic giants have released plans to expand production. JinkoSolar plans to build a vertical integration base with an annual output of 56 gigawatts in Shanxi; the Ordos project of Jingao Technology is planned to produce 30 gigawatts of crystal pulling, silicon wafers, batteries and 10 gigawatts of modules; Longji Green Energy plans to build a silicon rod with an annual output of 20 gigawatts and a battery with an annual output of 24 gigawatts in Xi'an; Tongwei's Chengdu project plans to produce 25 gigawatts of batteries and 20 gigawatts of components annually. In addition, a number of enterprises have recently crossed the border into the photovoltaic industry, including some real estate, textile and garment enterprises. How big is the expansion scale of photovoltaic industry? The reporter consulted the China Photovoltaic Industry Association. Liu Yiyang, deputy Secretary-General of
China Photovoltaic Industry Association, responded: "The whole industry chain is more than 700 gigawatts, and the production capacity of each section, including polysilicon, silicon wafers, cells and components, is more than 700 gigawatts. This refers to the effective production capacity. No matter how many years have passed, it can reach more than 700 gigawatts by the end of this year." What is the concept of
700 GW? According to estimates by institutions and experts, the demand for new photovoltaic installations in China this year is between 100 gigawatts and 150 gigawatts, and the demand for new installations in the world is between 350 gigawatts and 400 gigawatts. That is to say, even if all the photovoltaic products in the world are supplied by China, the production capacity still exceeds the new demand by nearly one time. It is worth noting that this 700 gigawatts is only the effective capacity by the end of this year, and if we count the capacity under construction and planned to be put into operation after next year, this figure will exceed 1000 gigawatts. Why do enterprises have to expand production on a large scale when production capacity has exceeded demand so much? Many industry insiders said that the main reason is that they are optimistic about future demand. "From the overall power structure of the country, the proportion of clean energy is increasing, which can be seen in the annual data," said a senior executive of a
photovoltaic company. Therefore, at the level of the whole society, no matter whether enterprises make some choices or strategies independently, the green electricity structure in their electricity consumption will gradually rise. Fang Wenzheng, an analyst
at Longzhong Information, believes that the low threshold in the middle and lower reaches of the photovoltaic industry and the huge profits in the industrial chain are the main reasons for the expansion of the industry's production capacity.
Fang Wenzheng said: "It is relatively easy to enter the photovoltaic industry like cells and photovoltaic modules, because they are semi-finished products.". On the other hand, the whole photovoltaic industry chain is now relatively profitable, so profit is an important reason to attract cross-border production in various industries.
For photovoltaic giants, if they do not follow the expansion of production, market share will gradually be diluted by other enterprises, so this is the need for competition. Some experts have analyzed that the large-scale expansion of production in the photovoltaic industry may lead to a surplus of upstream and downstream products and a drop in prices. At present, the price of upstream silicon materials has fallen by more than 70% compared with last year's high point, and the price of silicon wafers and batteries has also fallen sharply recently. However, Fang Wenzheng said that due to the adjustment of production rhythm, the current inventory level of the industry is not too high.
Fang Wenzheng said: "If the downstream market demand is not optimistic, the start-up load of cells will drop immediately.". Now the statistics are between 50% and 60% every month, which is very low. Stocks should not be very high relative to other commodities.
Industry insiders believe that photovoltaic expansion is a normal cyclical fluctuation, and it is recommended to treat it rationally. Liu Yiyang believes that next, the fierce competition will intensify the survival of the fittest in the photovoltaic industry and promote enterprises to upgrade their technological level.
Liu Yiyang said: "The leading enterprises have the advantages of technology, talent, channel and market. After the expansion of production, the second and third-tier enterprises will be squeezed out. Of course, this is also a benign and normal market competition process.". But now the market competition environment is more intense and complex, so I suggest that new entrants should weigh, as to whether to vote or not, it is the entrepreneur's own business.
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