Eight trends in the next year to change the pattern of the photovoltaic industry

2015 was a year in which China's photovoltaic industry achieved a leap-forward development. By the end of the year, the installed capacity of photovoltaic power generation is expected to exceed 39 million kilowatts. The scale of new installed capacity and cumulative installed capacity are far higher than those of other countries.

In 2016, China's photovoltaic industry is about to usher in the first year of the “Thirteenth Five-Year Plan” period. Whether the industry can make a good start and how to cope with opportunities and challenges has become a matter of great concern for every photovoltaic company. Although there are thousands of clues, the following points need attention:

1. The Chinese government firmly develops confidence in the photovoltaic industry

Whether it is the Paris agreement reached after the arduous negotiations in 2015 or the document submitted by China to the United Nations for the country’s independent contributions to address climate change, it all demonstrates the Chinese government’s determination and attitude in launching energy and promoting green and low-carbon development. The coal industry as a representative of traditional fossil energy has gradually become hazy, and the new energy industry represented by the photovoltaic industry has ushered in historic development opportunities.

According to the policy level, during the “13th Five-Year Plan” period, the annual average installed capacity of photovoltaic power generation is expected to reach 20 million kilowatts, and the cumulative new installed capacity is expected to reach 150 million kilowatts. Faced with huge market space and favorable policies, the photovoltaic industry in 2016 is expected to continue its rapid growth.

2. The cost of photovoltaic system is gradually reduced, which is good for the development of the entire industry

At present, the main reason for restricting the large-scale development of the photovoltaic industry is its high system cost. Photovoltaic power generation must rely on subsidies to ensure its benefits. In recent years, photovoltaic modules, which account for the largest part of the cost of photovoltaic systems, have been declining year by year due to factors such as declining raw material costs and technological process upgrades. Based on the current innovative research and development results of photovoltaic modules, the cost of photovoltaic modules is in a relatively definite cost reduction channel. In addition, the competition in the equipment market such as inverters has caused the cost to continue to decline. With the continuous decline in the cost of photovoltaic systems, even if the subsidies are not timely in place in the case of subsidies, the competitiveness of photovoltaic power will gradually increase, and ultimately achieve the goal of photovoltaic parity Internet access.

3. Weakened subsidies depend on

The country's renewable energy development ** gap for the payment of renewable energy subsidies has been expanding year after year, mainly due to the fact that renewable energy price surcharges have failed to achieve full collection. Although, in 2013, China has increased the renewable energy price surcharge standard to 1.5 cents/kWh, the growth rate of renewable energy development is far from meeting the demand for newly installed subsidies for renewable energy.

In order to weaken the PV industry's reliance on subsidies, prices have forced the PV industry to upgrade its technology and reduce costs. At the end of the year, the NDRC once again lowered the PV benchmark price by 0.02-0.1 yuan/kWh. In conjunction with onshore wind power, the adjustment of the benchmark electricity prices in 2016 and 2018 is different. The price adjustment has not yet established the benchmark price of photovoltaic power generation after 2017, which reflects the policy direction of continuing to support the development of the photovoltaic market.

4. Pay attention to the coordinated development of resources, load, and power grid

The impact of major unresolved issues such as UHV construction during the “12th Five-Year Plan” period has not been confirmed. After nearly two years of shelving, the government did not launch the power industry plan but instead launched energy development planning and renewable energy. Energy development planning. The time-space mismatch between the ambitious renewable energy development goals and the delays in the construction of grid supporting facilities has led to the “wide-range, normal-state” phenomenon of power curtailment. Coupled with the slowdown in economic development and the lack of electricity demand, the photovoltaic industry has experienced an unprecedented crisis of power curtailment.

The “13th Five-Year Plan for Power Industry Development in 2016” will be compiled with the most important plans and is expected to be released in 2017. The development of the photovoltaic industry will be expected to return to rationality, attach importance to the unified planning and coordinated development of regional power installations and grid construction, achieve a time and space balance between resources and grid construction support, and let photovoltaic panels lie no longer alone on the ground.

5, industry consolidation, mergers and acquisitions will become the mainstream

Photovoltaic module manufacturers tend to operate lighter assets after they emerge from the cold winter. In 2015, all major PV companies were basically full-scale production, while the excess portion was inclined to adopt the outsourcing processing model. From the macro level, the government supports the merger, acquisition, and reorganization of outdated production capacity companies in the upper reaches of the PV industry through policies such as the “leader plan” and promotes industrial technology upgrading.

Some photovoltaic power generation companies have rapidly expanded in a high-debt model. However, cash flow cannot cover interest expenses due to factors such as subsidy inefficiencies and power cuts. In 2016, the capital chain of photovoltaic power generation companies will remain tense. PV power companies are forced to transfer power plants or Acquired, and will become a trend.

In addition, the enterprises that traditional industries are trying to transform into the photovoltaic industry will also enter the photovoltaic industry quickly by means of mergers and acquisitions. In 2016, they will become the year of integration and merger and acquisition of the photovoltaic industry.

6, electricity reform to activate the new development of photovoltaic power

The “** Several Opinions of the Central and State Council on Further Deepening the Reform of the Electric Power System” (Zhongfa [2015] No. 9) and related supporting documents were issued, which can be said to bring significant benefits to photovoltaic power generation. The document clearly stipulates the preferential purchase of photovoltaics, etc. Renewable energy. Since then, the National Energy Administration’s “Management Measures for Fully Guaranteed Generation of Renewable Energy for Electricity Generation” has asked for opinions that users with distributed wind power and solar power generation will not participate in market competition for the time being, and the amount of on-grid electricity will be purchased in full by grid companies.

Under the current situation where the mismatch between load and resources cannot be resolved within a short period of time, electric power reform will effectively mitigate the serious phenomenon of current light curtailment from the institutional and practical aspects, and the distributed photovoltaic model will usher in opportunities on a large scale.

7. Overseas PV market has become a new growth point in the market

After years of entanglements with the EU on the "double reverse" issue, Chinese PV companies have gradually shifted their market focus to emerging markets. Demand for PV products in emerging markets such as India and Africa has increased year by year, and demand for PV markets in the “One Belt and One Road” region has gradually been released. In 2016, the overseas PV market will become a key competition area for Chinese PV companies.

8, photovoltaic financing issues still to be cracked

The financing cost of China's PV companies is much higher than the average level in the United States and Europe. The heavy capital burden and cash flow beyond their means make many PV companies miserable. In particular, the development of distributed photovoltaic power generation is dominated by small and medium-sized enterprises, credit rating is low, and there are few optional financing tools. High financing costs inhibit the willingness of small and medium-sized enterprises to develop distributed photovoltaics.

At present, financial leasing, yieldco, asset securitization, crowdfunding and other methods have different degrees of restriction. Cracking the photovoltaic financing problem basically depends on a bank with a lot of money. In the latest industry over-capacity industry directory published by the Ministry of Industry and Information Technology, the wind power and photovoltaic industries have been removed, and the "thirsty funding" of the photovoltaic industry is expected to be solved by banks.

In order to solve the problem of distributed photovoltaic financing, the Shanghai Municipal Development and Reform Commission and the Finance Bureau took the lead in launching the distributed PV “Sunshine Loan” project**, which was officially introduced into the SME financing guarantee agency to attract banks to distribute to distributed developers.

With policy guidance and government support, bank funds will hopefully increase the speed of inflows into the photovoltaic industry, which will help reduce the industry-wide cost and promote the further development of the photovoltaic industry.