by the sustained rise in industry prosperity, the operation of photovoltaic module enterprises has been very satisfactory since this year. Among the 13 listed companies in the A-share photovoltaic module related industry chain, 10 of them achieved a year-on-year increase in net profit attributable to the parent company in the first quarter.
Photovoltaic module is the most important equipment in photovoltaic power generation system. Its power generation efficiency, service life, production cost and selling price will largely determine the cost of photovoltaic power generation.
From 2010 to 2021, the production capacity and output of PV modules in China showed a continuous growth trend, of which the module production capacity increased from 20GW to 359.1GW, with a compound annual growth rate of 30%, and the module production capacity increased from 10.8GW to 182GW.
PV modules mainly convert light energy into electricity in the PV power generation system, and the newly installed PV capacity will directly drive the growth of the demand for PV modules. From 2018 to 2022, the demand for newly installed PV modules in China will increase from 53.4G W to 104.9 GW.
According to the Action Plan for Carbon Peak by 2030, China will comprehensively promote the large-scale development and high-quality development of wind and solar power, adhere to both centralized and distributed development, and accelerate the construction of wind and photovoltaic power bases. By 2030, the cumulative installed capacity of wind and photovoltaic power will reach more than 1.2 billion kilowatts.
It is expected that with the construction of large-scale wind and solar bases in China and the continuous development of distributed PV, the demand for new PV installed modules in China will reach 153.6GW by 2027, with a compound annual growth rate of 7 from 2022 to 2027.
So, what is the current situation of China's PV module industry? What are the development opportunities and pain points in the industrial chain? Photovoltaic module is the most important equipment in photovoltaic power generation system. Its power generation efficiency, service life, production cost and price largely determine the cost of photovoltaic power generation. Technological progress in
various production and industrial chain links accelerated the improvement of conversion efficiency of PV modules: from 2010 to 2016, the conversion efficiency of PV modules increased by an average of 0.3% -0.4% annually. Its conversion efficiency increases by an average of 0 per year.
Optical optimization: There are two main ways of optical optimization, namely, reducing the optical loss of light and improving the light absorption capacity of photovoltaic modules. Among them, the main methods to reduce the optical loss are the replacement of new materials and the reduction of light reflection; the main methods to improve the light absorption capacity are the optimization of the structure of the solder strip and the splicing technology of the cells and the reduction of the gap between the cells.
Electrical optimization: Electrical optimization refers to the reduction of resistance loss by optimizing the current trend inside the battery and the connection structure between the cells. The main methods of electrical optimization are half chip, multi-main grid and shingle technology.
Structural optimization: Structural optimization mainly refers to the change of PV module arrangement and structure, or the structural optimization based on the breakthrough of upstream technology. The main methods of structural optimization are double-sided module technology and large silicon wafer module technology.
PV Main Industry Chain Price Overview
The current situation
of China's photovoltaic module industry From 2010 to 2021, China's photovoltaic module production capacity and output showed a continuous growth trend, of which, the module production capacity increased from 20GW to 359.1GW. The compound annual growth rate was 30%, and the module production capacity increased from 10.8 GW to 182 GW, with a compound annual growth rate of 29.
The production capacity of PV modules was mainly determined by the expectations of module manufacturers for the future development of the PV industry, such as the soaring global energy prices from 2021 to 2022 due to geopolitical factors. Both at home and abroad have accelerated the layout of new energy sources such as photovoltaic and wind power. Component enterprises expect that the demand for components will rise rapidly, and strive to expand the layout of production capacity, rapidly raising the level of photovoltaic module production capacity.
As the production of PV modules is relatively flexible, the output of PV modules mainly depends on factors such as the supply and demand relationship between the upstream and downstream of the industrial chain, the cost price, and the expectations of enterprises, such as the high level of raw materials, the slowdown in the construction of PV power plants, and the accumulation of inventory, which will limit the actual output of PV modules. The overall concentration of the
photovoltaic industry chain has been continuously improved, and the CR5 of the head enterprise of photovoltaic modules has been improved rapidly. In recent years, the photovoltaic industry as a whole has entered the stage of integration. The leading enterprises in each link of the industrial chain have been expanding their existing scale by virtue of the advantages of capital, technology, cost, brand and channel, and the small and medium-sized photovoltaic enterprises and backward production capacity have been accelerated to be cleared. Compared with CR5 in 2020, the change range of silicon wafer, polysilicon and battery is relatively small, among which the industrial concentration of silicon wafer and polysilicon has slightly decreased. In the
component sector, CR5 increased from 42.8% in 2019 to 63% in 2021. Horizontal comparison shows that the concentration of the cell industry is relatively low, mainly due to the fact that the head component enterprises will purchase from the outside while producing their own cells. In order to reduce the risk of excessive concentration of suppliers and insufficient production capacity of batteries, thus lowering the industrial concentration. Compared
with other links in the photovoltaic industry chain, the photovoltaic module industry has the characteristics of relatively low investment per unit capacity, relatively shorter construction cycle and relatively flexible production scheduling. Compared with the relatively high investment in the construction of silicon materials, silicon wafers, photovoltaic cells and photovoltaic glass, the unit investment of photovoltaic modules is about 0.6 billion yuan/GW to 1.
From the point of view of the difficulty of starting and stopping each link of the industrial chain, the production of silicon materials, glass and photovoltaic cells has a strong continuity. For example, once the photovoltaic glass furnace is ignited, it needs to continue to produce until the end of the whole life cycle, and the photovoltaic cells also need continuous production to ensure the yield and conversion efficiency of its products, while the difficulty of starting and stopping the production line of photovoltaic modules is relatively small, so its production is more flexible, and it can closely follow the market changes and the production schedule of enterprises to operate the production line accordingly. In addition, the construction cycle and start-stop difficulty of photovoltaic film production line are similar to those of modules, and the unit investment amount is slightly lower than that of module production line. The gross profit rate of silicon and glass head enterprises in
the photovoltaic industry chain has been maintained at a high level all the year round, while the gross profit rate of component enterprises is relatively low. From the point of view of the change of gross profit rate in some links of photovoltaic industry chain, the gross profit rate of silicon material and photovoltaic glass head enterprises is relatively high, because the investment level and expansion cycle of silicon material and photovoltaic glass are at a higher level in the industry chain. The tight supply of photovoltaic glass in 2020 and the tight supply of silicon materials from 2021 to 2022 will concentrate the profits of the industrial chain on the upstream links in the short term. The gross profit rate of PV module head enterprises has been at a low level in the industrial chain for a long time. From 2017 to 2022 H1, the gross profit rate of modules has been stable in the range of 10% to 20% for a long time, with a relatively small amplitude, indicating that the long-term supply and demand pattern of modules and the profit pricing model of enterprises are relatively stable. The market scale
of
China's PV module industry PV modules mainly play the role of converting light energy into electricity in the PV power generation system, and the newly installed PV units will directly drive the growth of the demand for PV modules. On May 31, 2018, the National Development and Reform Commission, the Ministry of Finance and the National Energy Administration jointly issued the Notice on Matters Relating to Photovoltaic Power Generation in 2018 to gradually promote the de-subsidization of photovoltaic power generation. Therefore, from the second half of 2018 to 2019, the photovoltaic industry in China was greatly impacted in the short term, and the new investment in ground photovoltaic power plants was close to stagnation. Since the second quarter of 2018, the growth rate of new photovoltaic installed capacity in China has turned negative, and it did not return to positive growth until the fourth quarter of 2019. The introduction of the 531 New Deal marked the entry of China's photovoltaic industry into the era of parity access to the Internet, accelerated the clearance of China's excess and backward production capacity, and laid the foundation for the follow-up high-quality development of the photovoltaic industry. In 2021, the National Energy Administration issued the Notice on Organizing and Declaring the Pilot Scheme of Rooftop Distributed Photovoltaic Development in the Whole County (City, District), and distributed photovoltaic ushered in a high-speed development era. In 2021, the newly installed capacity of distributed photovoltaic exceeded the newly installed capacity of centralized photovoltaic power stations for the first time, becoming one of the important increments in the demand for photovoltaic modules in China.
China announced at the 75th General Assembly of the United Nations on September 22, 2020 that it would strive to achieve carbon peak by 2030 and carbon neutrality by 2050. Under the background of "30 · 60" double carbon target, China's demand for clean energy is particularly urgent. According to the Action Plan for Carbon Peak by 2030, China will comprehensively promote the large-scale development and high-quality development of wind and solar power, adhere to both centralized and distributed development, and accelerate the construction of wind and photovoltaic power bases. By 2030, the cumulative installed capacity of wind and photovoltaic power will reach more than 1.2 billion kilowatts. It is expected that with the construction of large-scale wind and solar bases in China and the sustained development of distributed photovoltaic, the demand for new photovoltaic installed components in China will reach 153.6GW by 2027. Industry chain map of
the
PV module industry in China upstream of the PV module industry chain mainly includes PV cells, PV glass, PV film, PV connection equipment, other auxiliary materials and module production equipment; the midstream mainly includes various module production enterprises; The downstream is photovoltaic power station and distributed photovoltaic. The competition pattern
in the middle reaches of the
photovoltaic module industry chain can be seen by comparing some listed photovoltaic module enterprises from three dimensions: Longji Green Energy, JinkoSolar, Trina Solar and Jingao Technology are the leading enterprises in the photovoltaic module industry, with the characteristics of high module production capacity and high gross profit margin, while the operating income of module business is also higher than that of other module enterprises. The production capacity of
Atlas, Dongfang Risheng, Xiexin Integration and Zhengtai Electrical Appliances is above 20GW, which is in the middle of the industry, but their gross interest rate level is not significantly different from other enterprises with smaller production capacity and revenue. This shows that the relevant businesses of the leading enterprises in the PV module industry can enjoy higher profitability by virtue of their competitive advantages such as industrial chain management ability, cost control ability and brand premium ability, while there is no significant difference in the profitability of the module enterprises except the leading enterprises. At present, the production capacity of TCL Zhonghuan, Yijing Optoelectronics, Haitai Xinneng, CECEP Solar Energy and Aerospace Mechatronics is relatively small, and the operating income of its component-related business is also at a low level, but the gross profit rate is not far from that of the midstream enterprises such as Atlas and Dongfang Risheng.
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