On May 21, according to the official account of China Photovoltaic Industry Association (CPIA), China Photovoltaic Industry Association (CPIA) recently held a "Symposium on High Quality Development of Photovoltaic Industry" in Beijing. The meeting pointed out that efforts should be made to strengthen the crackdown on vicious competition in sales below cost prices; Encourage industry mergers and acquisitions, and facilitate market exit mechanisms.

Since the beginning of this year, prices of products in various links of the photovoltaic industry chain have experienced a comprehensive decline. According to data released by the Silicon Industry Branch of the China Nonferrous Metals Industry Association on May 15th, the current price of polycrystalline silicon has exceeded the cash cost of all enterprises in production. In the first quarter of this year, several top photovoltaic listed companies faced pressure on their performance, and the operating situation of second - and third tier photovoltaic enterprises became even more severe.

At the market level, the photovoltaic sector of A-shares has been constantly adjusting. As of the close on May 21, the Wind Photovoltaic Index closed at 2953.05 points, with a cumulative decline of over 20% this year. Compared to the highest point in August 2022, the cumulative decline has reached 52.2%. According to Wind data, the total market value of the photovoltaic sector in A-shares is currently about 1730 billion yuan.

Heavyweight conference

On May 21, according to the official account of China Photovoltaic Industry Association (CPIA), in the afternoon of May 17, under the guidance of the Electronic Information Department of the Ministry of Industry and Information Technology, China Photovoltaic Industry Association organized and held a "Symposium on High Quality Development of Photovoltaic Industry" in Beijing. The meeting pointed out that efforts should be made to strengthen the crackdown on vicious competition in sales below cost prices; Encourage industry mergers and acquisitions, and facilitate market exit mechanisms.

It is reported that from Trina Solar (20.460, -0.42, -2.01%), GCL Technology, Jinko Energy (7.690, -0.16, -2.04%), CSI (12.100, -0.28, -2.26%), Longji Green Energy (18.490, -0.04, -0.22%), Tongwei Shares (22.000, -0.31, -1.39%), Daquan Energy (25.080, -0.05, -0.20%), Yibin Municipal Government, the Development Research Center of the State Council, the National Research Think Tank, the Energy Research Institute of the National Development and Reform Commission, the National Engineering Research Center for Silicon based Material Preparation Technology, the National Development Bank, and Industrial Bank (18.320, 0.09, 0.49%) and other photovoltaic enterprises, research units, local governments, financial institutions, representatives of 14 units also attended the meeting, and representatives of the Standards and Technology Committee of China Photovoltaic Industry Association and the Intellectual Property Special Committee also attended and reported on the progress of related work. The meeting was chaired by Jiang Hua, Deputy Secretary General of the China Photovoltaic Industry Association, and attended by Jin Lei, Director of the Electronic Information Department of the Ministry of Industry and Information Technology, who delivered a speech.

The meeting pointed out that the photovoltaic industry is a highly market-oriented industry, and it is more appropriate to solve the current industry difficulties through market-oriented means. However, the tangible role of the government should also be fully utilized, including optimizing the guidance of photovoltaic manufacturing industry management policies on industry capacity construction and improving key technical indicators; Standardize the investment promotion policies of local governments and establish a unified national market; Adapt to the fast iteration speed of photovoltaic technology and establish effective intellectual property protection measures; Encourage industry mergers and acquisitions, and facilitate market exit mechanisms; Strengthen the crackdown on vicious competition in sales below cost prices; To ensure the stable growth of the domestic photovoltaic market, explore supporting the application of advanced technologies through demonstration projects, and transform the low price bidding situation.

The meeting stated that photovoltaic enterprises and the industry also need to do well in themselves, fully recognize their main responsibility for solving the current industry difficulties, eliminate vicious competition, truly stand on the industry's position in decision-making and action, adhere to innovation driven, long-term principles, win-win cooperation, and jointly maintain a fair competition order.

The China Photovoltaic Industry Association will focus on promoting the following work in the future:

One is to support the Electronic Department of the Ministry of Industry and Information Technology, fully leverage the role of the "Normative Conditions for the Photovoltaic Manufacturing Industry", and guide and regulate the development of the industry;

Secondly, we will continue to promote the construction of price index models and explore more reasonable domestic and international price formation mechanisms through photovoltaic module futures and other means;

The third plan is to hold a symposium on the calibration of TOPCon battery efficiency and the downshifting of storage, to explore the causes and solutions;

Fourthly, we will continue to strengthen industry monitoring work, and relevant industry information will be promptly released to the public to guide industry decision-making.

Overall decline

In the context of carbon neutrality, the photovoltaic new energy industry has ushered in unprecedented development opportunities, but currently also faces challenges of overcapacity and market saturation. The imbalance between supply and demand has led to a continuous decline in photovoltaic product prices, and some products have even fallen below the cost line.

Since the beginning of this year, prices of products in various links of the photovoltaic industry chain have experienced a comprehensive decline. Taking the price of N-type TOPCon components as an example, according to Infolink data, from 0.98 yuan/W in mid to early January, it has now dropped to 0.86 yuan/W, a decrease of 12%.

Industry analysis suggests that based on current battery prices, packaging costs, and competitive landscape, it is expected that component prices may continue to decline in the future.

According to data released by the Silicon Industry Branch of the China Nonferrous Metals Industry Association on May 15th, the current price of polycrystalline silicon has exceeded the cash cost of all enterprises in production. Under high inventory pressure, some small and old production capacities have been shut down for maintenance. The vast majority of enterprises have a strong willingness to support prices and choose not to sell at low prices.

Against the backdrop of the overall decline in prices in the photovoltaic industry chain, some companies have terminated project investments or postponed project construction.

Among them, ST Lingda (2.460, -0.20, -7.52%) (Lingda Shares) subsidiary Jinzhai Jiayue temporarily suspended the existing 3.5GW-182mm large-sized PERC high-efficiency solar cell production line (5.450, 0.15, 2.83%) from March 14, 2024. However, due to financial constraints and other factors, the shutdown time has been repeatedly extended. ST Lingda has also decided to terminate the construction of the Tongling high-efficiency photovoltaic cell industry base project.

Haiyuan Composite Materials (6.420, -0.05, -0.77%) announced in March this year that it had terminated the Chuzhou 15GW N-type high-efficiency photovoltaic cell and 3GW high-efficiency photovoltaic module projects, and transferred them to Aixu Technology for a price of 38 million yuan.

In early February of this year, Ainengju (6.180, 0.14, 2.32%) implemented a temporary shutdown of the production line for polycrystalline silicon solar cells. Originally planned to stop production until March 31, 2024, but due to unsatisfactory results in obtaining orders, the company decided to continue the shutdown of the polycrystalline silicon solar cell production line.

In addition, according to the latest financial report data, in the first quarter of this year, several top photovoltaic listed companies faced pressure on their performance, and the operating situation of second - and third tier photovoltaic enterprises was even more severe.

At the market level, the photovoltaic sector of A-shares is constantly adjusting. Taking the Wind Photovoltaic Index as an example, as of the close on May 21, the index fell 1.49% to 2953.05 points, with a cumulative decline of over 20% this year. Compared to the highest point in August 2022, the cumulative decline has reached 52.2%.

According to Wind data, as of the close of May 21st, the total market value of the photovoltaic sector in A-shares is approximately 1730 billion yuan.

Accelerate shuffling

Analysts point out that low price competition has to some extent affected the healthy development of the industry, and also limited the investment of enterprises in research and innovation, thereby affecting long-term industry competitiveness.

The "Symposium on High Quality Development of the Photovoltaic Industry" organized by the China Photovoltaic Industry Association emphasized the need to strengthen the crackdown on vicious competition in sales below cost prices; To ensure the stable growth of the domestic photovoltaic market, explore supporting the application of advanced technologies through demonstration projects, and transform the low price bidding situation.

In a saturated market environment, the importance of enterprise development strategies and market positioning is becoming increasingly prominent. The photovoltaic industry needs to find new growth points while maintaining healthy competition to avoid falling into a vicious cycle of low profits. However, multiple analysts believe that in the long run, the decline in photovoltaic product prices is limited.

The symposium on high-quality development of the photovoltaic industry also pointed out the encouragement of industry mergers and acquisitions, and the smooth operation of market exit mechanisms. This statement sends a signal of supply side reform in the industry.

It is worth noting that while competition in the photovoltaic industry intensifies and reshuffle accelerates, there were rare signs of a decline in the newly installed capacity of domestic photovoltaics in March this year. According to the national electricity industry statistics released by the National Energy Administration from January to March, the newly installed photovoltaic capacity in the first three months of this year was 45.74GW. According to the previously released data from January to February, the photovoltaic system added 9.02 GW of installed capacity in March, a year-on-year decrease of 32.13%.

According to the forecast of the China Photovoltaic Industry Association, the conservative estimate for the newly installed photovoltaic capacity in China in 2024 is 190GW, lower than 2023. Under optimistic circumstances, it is expected to be 220GW, which is basically the same as 2023.