The photovoltaic industry is a strategic emerging industry with international competitive advantages in China, with a total output value of the industry exceeding 1.7 trillion yuan. However, since 2023, products in the photovoltaic industry chain have entered a "sale" mode. Why have the prices of the photovoltaic industry chain declined against the trend? What are the key issues that need urgent attention in the future photovoltaic market?

"A photovoltaic module workshop with an annual production capacity of 1 gigawatt, with 230 employees continuously producing for one month, and everyone is off the machine endlessly. When component prices drop sharply, it will lose 5 million yuan. If the workshop does not produce, all employees are off and only paid wages, which can save a sum of production utilities and equipment depreciation." At the recently held 2024 Photovoltaic Market Development Forum, a domestic component company expressed the embarrassment faced by photovoltaic companies.

The photovoltaic industry is a strategic emerging industry with international competitive advantages in China. It is active in technology research and development, the industrial chain is complete and complete, and the industrial scale continues to expand. The total output value of the industry has exceeded 1.7 trillion yuan. However, since 2023, products in the photovoltaic industry chain have entered a "sale" mode, and the prices of polysilicon and module products have dropped by more than 50%, falling below the production cost line, placing huge pressure on corporate profits. Against the background of a significant increase in global photovoltaic installed capacity, why did the prices of the photovoltaic industry chain decline against the trend? How will the photovoltaic market evolve in the future? What other key issues need urgent attention?

Reasonably treat periodic fluctuations

Since 2023, photovoltaic industry chain companies such as polysilicon, silicon wafers, batteries, and modules have significantly expanded their production, causing an oversupply in the market. "The price has dropped too much, and TOPCon and heterojunction battery products are selling at a loss. This is not a reasonable price system." Tian Jiehua, senior director of Anhui Huasheng New Energy Product Development and Management Center, pointed out that the market itself has a regulatory function. When some enterprises have insufficient reserve funds to cover losses, they will naturally be eliminated, and the prices of photovoltaic products will return to a reasonable range.

“The pursuit of low prices is very unfavorable to the long-term development of the photovoltaic module industry. ”通威股份光伏商务部国内技术负责人尹海斌指出，光伏组件技术更新迭代快，现在开发的TOPCon、HJT、钙钛矿/混合型BC等技术，整体适配性在短期内很难进行调整，也就是说规模越大，风险可能越高。“光伏产业链价格已经相对透明，要保留每个环节的合理利润空间。”

"Now is a period of pain for manufacturing companies and a period of joy for development companies, but it will definitely gradually adjust to a relatively balanced state in the future." Tang Zhengkai, director of strategic products and marketing for Trina Solar in China, said that the continued decline in photovoltaic costs will exchange for investment profit margins for photovoltaic power plants, but most of this profit margin will be obtained by the development process, which is unreasonable in itself. "At present, photovoltaic power generation is not yet a stable power supply, and profit margins should be invested in turning photovoltaic power generation from unstable power supply to relatively stable power supply. The reduction in photovoltaic costs to a certain extent must lead to the development of photovoltaic power generation in the direction of a more friendly and stable power supply."

optimistic about long-term development prospects

Despite the current fierce market competition, practitioners generally believe that the photovoltaic industry will continue to maintain rapid development.

Tao Ye, deputy director of the Renewable Energy Center of the Energy Research Institute of the National Development and Reform Commission, pointed out that as renewable energy consumption and consumption responsibilities are further transmitted to various key energy-using enterprises and end power users, the awareness of green consumption in the whole society has been further enhanced, and green electricity consumption in export-oriented industries, high-tech equipment manufacturing, and modern service industries is expected to show rapid growth, and the scale of green power transactions will achieve multiple growth.

Tao Ye predicts that in 2024, the proportion of non-fossil energy power generation installed capacity in China will increase to about 55%, wind power and solar power generation will account for more than 17% of the country's total power generation, and the proportion of non-fossil energy in energy consumption will increase to Around 18.9%, the proportion of terminal power consumption will continue to increase.

Green and low-carbon transformation has become an international consensus. Yin Haibin pointed out that the commitments concluded by countries at the 28th United Nations Climate Change Conference (COP28) and the "Sunshine Country Statement on Strengthening Cooperation to Address the Climate Crisis" jointly issued by China and the United States both proposed to make global renewable energy by 2030. The installed capacity of renewable energy has increased by three times.

"The global installed capacity of renewable energy will reach about 11000 GW. From the perspective of the photovoltaic industry, the global installed photovoltaic capacity will be 1054 GW in 2022 and will reach 5457 GW by 2030, equivalent to an increase of about 550 GW per year. The scale is quite large. We are optimistic about the development trend of the photovoltaic industry in the next few years. Positive judgment." Yin Haibin said.

Yu Hanbo, director of global photovoltaic solutions at Jinko Energy, predicts that the growth rate of the global mainstream photovoltaic market will exceed 24% in 2024. "Last year, the top 4 companies in the industry accounted for 57% of total shipments, and the top 7 companies in the industry had a market share of 73%. Industry competition will further intensify this year, the advantages of leading companies will be further amplified, and the market share of the top 4 companies is expected to exceed 60%."

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Take multiple measures to relieve pressure

Against the background of rapid development of new energy, consumption problems have become increasingly prominent. Data shows that in 2023, China's new energy power generation capacity will be 1.47 trillion kilowatt-hours, of which wind power generation capacity will be 885.8 billion kilowatt-hours and photovoltaic power generation capacity will be 583.3 billion kilowatt-hours. The new energy utilization rate will reach 97.6%, exceeding 95% for five consecutive years.

Zhang Jinping, director of the New Energy Dispatch and Operation Office of the New Energy Research Center of the China Electric Power Research Academy, further pointed out that as the penetration rate of new energy power generation exceeds the critical value, the decline in overall utilization rate is an objective law and inevitable trend. "According to the current installed capacity trend forecast, it is expected that by the end of 2025, the cumulative installed capacity of new energy across the country will exceed 1.4 billion kilowatts, achieving the target of 1.2 billion kilowatts of total installed capacity in 2030 ahead of schedule. China's new energy utilization rate may drop below 95% this year and will further decline in 2025. The overall utilization rate may drop to around 90% in 2030."

"According to relevant research, China's new energy industry has entered a new stage of development, taking wind and solar power generation as the dividing line as 15% of the electricity consumption of the whole society, which will lead to an increase in system consumption costs." Li Qionghui, a senior expert at the Institute of New Energy and Statistics of the State Grid Energy Research Institute, pointed out that in 2012 and 2016, China experienced large-scale new energy consumption problems, and the current consumption pressure still exists.

李琼慧表示，值得关注的是，早些年的消纳问题和现在的消纳问题有本质区别，彼时新能源产业处于起步阶段，产品功率穿越能力不足、系统调节能力薄弱造成的脱网问题较严重，由此导致局部地区弃风、弃光率居高不下。“ As the proportion of new energy power generation continues to increase, it is necessary to solve consumption problems through market-based means, promote technological progress through bidding competition, and ultimately achieve the goal of promoting energy transformation at the lowest cost.”

Zhang Jinping suggested optimizing the operation mode of the power system and the timing of grid connection of new energy sources, early warning of new energy consumption risks, and improving the level of power prediction. "The prediction accuracy of wind power and photovoltaic power generation power will be increased by 1 percentage point each, the utilization rate of new energy can be increased by 0.2-0.9 percentage points, the capacity of new energy power generation can be increased by 190 - 660 million kilowatt hours, and the scale of thermal power transformation will be reduced on average by about 1.5 million kilowatts, saving 200 million yuan in flexible transformation costs."