Photovoltaic power generation is one of the most important ways to use solar energy in the world today. Faced with the serious fossil energy crisis and environmental crisis facing the world today, photovoltaic power generation has obvious advantages from the perspectives of resource sustainability and environmental friendliness. As an important representative of the emerging industries in the world, it has broad prospects in the long run. , attracting a large number of companies to participate and invest.
The development of China's photovoltaic industry in the past decade
With the global focus on energy and environmental crises, the photovoltaic industry has experienced a rapid development stage in the past decade. At the same time, China's economy is also experiencing leaps and bounds, and its economic aggregate ranks second in the world, second only to the United States. As a major manufacturing country and a major energy consumer in the world, China's photovoltaic industry has played a very important role in the rapid development of the world's photovoltaic industry, and has also experienced several stages of industrial development.
On January 10, 2014, at the China PV Industry Integration Symposium hosted by China Minsheng Bank, Mr. Wang Bohua, Secretary General of China Photovoltaic Industry Alliance, summarized the important stages of the development of the photovoltaic industry over the past decade. Review, as shown in Figure 1.
Rapid development period (2004~2008)
With the introduction of the EGG Act in Germany, European countries have heavily subsidized the support of the photovoltaic power generation industry. In this context, China's photovoltaic manufacturing industry has rapidly used foreign markets, technologies and capital to form scale. In 2007, China overtook Japan to become the world's largest producer of photovoltaic power generation equipment. A group of photovoltaic manufacturing enterprises represented by Suntech Power and Jiangxi Saiwei have successively landed in the US capital market and have been sought after by the market. The price of polysilicon, the core raw material for photovoltaic power generation equipment, exceeded $400/kg.
First adjustment period (2008~2009)
The global financial crisis broke out, the financing of photovoltaic power plants was difficult, and the support policies in Europe and other countries such as Spain caused the demand to decline. China's PV manufacturing industry experienced a severe decline, and the price of products fell rapidly. The price of polysilicon fell to about. The level of 40 USD / kg.
Explosive recovery period (2009~2010)
In the background of the expected reduction in the subsidies for photovoltaic power generation in the German and Italian markets and the fall in the price of photovoltaic products caused by the financial crisis, the wave of rushing out of the market broke out and the market recovered rapidly. At the same time, China has issued a 4 trillion yuan bailout policy, and the photovoltaic industry has been positioned as a strategic emerging industry, which has spawned a new round of investment in the photovoltaic industry. The price of polysilicon, which is a barometer of the photovoltaic industry, has also rapidly rebounded to the level of $90/kg.
Industry adjustment period (2011~2013)
The explosive growth of the previous stage led to the rapid growth of photovoltaic manufacturing capacity, but the slowdown in market growth caused by the reduction of subsidies in Europe led to a serious phased surplus in photovoltaic manufacturing, a sharp decline in product prices, and trade protectionism. Rise. China's photovoltaic manufacturing industry has once again experienced setbacks and almost fell into losses throughout the industry. Polysilicon prices fell to a record low of about $15/kg during this period.
The industry is gradually recovering (2013-present)
Japan’s unprecedented efforts to subsidize photovoltaic power generation have eased the contradiction between supply and demand in the market. At the same time, the Sino-European PV trade disputes were resolved through a commitment mechanism. China's photovoltaic industry support policy represented by the State Council's No. 24 document was intensively introduced, and supporting measures were quickly implemented. China has thus set off a wave of photovoltaic installations, driving the price of photovoltaic products to start to rise, and the price of polysilicon has risen slightly to about US$18/kg.
The core issue of the photovoltaic industry - serious subsidy dependence
From the historical stage of the development of China's photovoltaic industry, it is obvious that the photovoltaic industry's dependence on subsidy policies and the dependence of subsidy policies on the industrial cycle and ups and downs due to dependence on subsidies.
With the rapid development of the photovoltaic industry and the improvement of technology level in the past decade, the efficiency of photovoltaic power generation has been continuously improved, and the price of components has continued to fall, but the cost of photovoltaic power generation is still high compared to other power generation methods. Among them, the cost of thermal power generation is about 0.4 yuan / kWh, the cost of power generation of hydropower is 0.2 ~ 0.3 yuan / kWh, the cost of generating electricity for nuclear power is 0.3 ~ 0.4 yuan / kWh, and the cost of generating electricity for wind power, one of the important new energy sources, is 0.6 yuan / kWh, however, the cost of photovoltaic power generation is still as high as 0.9 ~ 1.0 yuan / kWh. Therefore, at least under the current technical level, photovoltaic power generation still relies heavily on government subsidies, and has no ability to separate from subsidies and independently participate in the power market competition.
At the same time, the "only horses are the vision" of subsidies further leads to the imbalance of risk distribution between the upstream and downstream of the photovoltaic industry chain. One end is the relatively low risk of photovoltaic power generation applications, while the other end is the relatively high risk of PV manufacturing.
Since the policy subsidy is easily affected by factors such as the macroeconomic cycle, the economic weakness is likely to lead to the tightening of subsidies, and Europe is the most lively example in front of us.
The weakening of subsidies has an impact on investors of PV power plants, but at best it is to allow investors to reduce the scale of investment or not to invest, at most to disrupt investment plans, not too much loss; but for those who have already put into production and enjoyed subsidies The policy of photovoltaic power plants has almost no impact. The so-called "old-age policy, newcomers and new policies", the subsidy policies that have been enjoyed by the power plants have generally promised a duration and can still maintain the original income level. Therefore, although the changes in policies bring uncertainty to the development of the photovoltaic industry, the impact on the application of photovoltaic power generation is relatively small.
However, for upstream PV manufacturing, changes in subsidy policies have had a huge impact. Photovoltaic manufacturing, especially in the most upstream polysilicon manufacturing industry, is a highly capital-intensive industry with huge investment. In the period of increasing and continuing subsidies for photovoltaic power generation, due to the active investment in power plants, the demand for upstream components and raw materials is strong, and the photovoltaic manufacturing industry has relatively stable and good revenue space. The polysilicon industry has even experienced a profiteering stage. However, once subsidies are cut, power station investment will slow down or require upstream products to cut prices. In the upstream and downstream games, because of the huge upstream production capacity, the game between manufacturers and power station investors is high and low, and the risks are naturally transferred to the upstream manufacturing process. Under this circumstance, it is necessary for PV manufacturing enterprises to adjust prices to accelerate sales, make up for huge fixed costs, maintain book profits, and “deliver homework†to the capital market, while maintaining the operation of the capital chain. However, if the subsidy adjustment is too large, the weak demand will cause the price of the product to fall so that even the variable cost cannot be covered, and the manufacturing company will generate a cash loss. In order to prevent the transition from blood loss, the company will only be able to stop production, or use improper means such as shoddy, but this is tantamount to drinking and quenching thirst, and can not continue. At the same time, corporate operating performance declines, and the tight capital chain will lead to domino effect, such as high capital market financing costs, refinancing difficulties, commercial credit tightening of upstream raw material suppliers, and defensive credit contraction of financial institutions. Manufacturing companies are undoubtedly worse. When negative energy is accumulated to a certain extent, the company will eventually collapse. The example of the former Chinese PV industry pioneer and leader "Shangde Power" is just around the corner.
Prospects for China's PV industry investment
In the second half of 2013, the State Council issued the “Several Opinions of the State Council on Promoting the Healthy Development of the Photovoltaic Industryâ€, which is commonly referred to as Circular 24. After that, the supporting measures and policies of the relevant departments have also been put in place. The most important documents and policies include the Notice of the Ministry of Finance on Relevant Issues Concerning the Implementation of Electricity-Subsidy Policies for Distributed Photovoltaic Power Generation, and the National Development and Reform Commission's Matters Concerning the Adjustment of Additional Standards for Renewable Energy Price and Environmental Electricity Price. Notice and the Notice of the National Development and Reform Commission on Promoting the Healthy Development of the Photovoltaic Industry by Playing the Role of Price Leverage. The core contents of these support policies include: the target of PV installed capacity will be raised from 21GW to 35GW during the “Twelfth Five-Year Plan†period; the subsidized electricity price level will be determined, and the on-grid price of large-scale grid-connected photovoltaic power stations will be 0.9 yuan/kWh and 0.95 yuan respectively in three regions. / degree, 1.0 yuan / kW of on-grid electricity price, distributed photovoltaic power generation enjoy 0.42 yuan / kW of full-power subsidies, self-use part of the local coal-fired units benchmarking on-grid price online access policy; clear subsidy period of 20 years; clear and substantial The source of subsidy funds is to explicitly raise subsidy funds by charging non-resident electricity users with renewable energy tariff surcharges, and raise the existing standard from 8% to 1.5 cents/degree.
In the simple reading, all of them are good for the photovoltaic industry, and the capital market is very responsive. Take a look at the rising trend of the A-share PV concept stocks before and after the 2013 policy.
Nowadays, the distance policy has been released for more than half a year. With the steady market sentiment, we should calm down and carefully consider whether this kind of benefit is quick-acting, or Yanshou Dan, or returning to the old age.
The high uncertainty of photovoltaic manufacturing has not been alleviated
China's support policies have spurred the development of the domestic PV installation market, which will help change the pattern of China's PV manufacturing market, which is almost "two-headed, subject to people." Compared with China's PV manufacturing industry, it has already ranked first in the world as early as 2007, and the growth of China's PV installed capacity is relatively slow.
At the end of 2009, the cumulative installed capacity of photovoltaics in China was only 0.3GW. Insufficient domestic demand has made China's huge PV manufacturing industry face a double risk, in addition to relying on subsidies and relying heavily on the external market.
After experiencing the first adjustment period of the PV industry in 2008~2009, China launched the "Golden Sun" demonstration project in 2009, which opened the prelude to the acceleration of China's PV installation. In 2011, 2.5GW was added, and in 2012, 5.0GW was added. With the introduction of the new support policy of 2013, the newly installed capacity was 10GW (the newest in the world), and it is expected that the installed capacity will not be lower than 10GW in the next three years.
What is the concept of 10GW? China's existing PV manufacturing capacity is about 35~40GW per year, which means that the domestic demand is equivalent to 25%~30% of the existing annual production capacity of China's PV manufacturing industry. Although this ratio is not too high, compared with the situation of relying on overseas markets in the past few years, the new policy will definitely have a significant effect on reducing the risk of external market dependence of China's PV manufacturing industry. Of course, the new demand may also stimulate some resurgence of backward production capacity, or once again set off a boom in the photovoltaic manufacturing industry to increase production capacity. However, the policies introduced this time are actually positive and negative, in addition to encouraging photovoltaic power generation applications, but also for the photovoltaic manufacturing industry. Constraint restrictions have clearly improved the threshold for entry, but the market is more willing to mention "good" and "encourage". This part of the policy to control production capacity is less mentioned by the media.
China's PV manufacturing industry has reduced the risk of dependence on the external market, but the inherent subsidy-dependent risk and the weak situation of the game with the downstream PV power generation have not changed substantially, and still show high-risk characteristics.
At the same time, photovoltaic power generation technology is still in a relatively rapid technological change period, new technologies and processes may appear at any time, such as the transformation of polysilicon preparation process routes, or technological breakthroughs in thin film materials, existing technologies and already put into production capacity. Companies may face the risk of being replaced at any time, which further increases the uncertainty of PV manufacturing investment.
Therefore, in addition to the industry giants with deep technical innovation strength, other institutions should be cautious if they consider investing in photovoltaic manufacturing.
The key to PV power plant investment is financial leverage. The biggest uncertainty risk is rapid technological advancement.
Let's talk about the downstream of the photovoltaic industry, that is, the investment in photovoltaic power plants.
The advantages of PV power plant investment are: one investment, long-term return, low follow-up operation and maintenance cost, and stable income. In particular, the latest domestic subsidy policy was introduced, and the 20-year subsidy period was clarified, further consolidating the stability of investment income.
Many domestic analysts and research institutes have calculated and analyzed the return rate of domestic PV power plant investment based on the domestic subsidy price level and the existing power station investment level. The results show that the project return rate of PV power plant investment can basically By 10%, the return on capital can even exceed 15%.
However, since it is measured, there are some key assumptions, such as the leverage ratio of the project and the price of the leverage. After reading several well-known calculation reports in detail, we can see that these all assume that the total investment of the project can get 70%~80% of long-term loan support, the deadline is 8~10 years, and the loan is annualized. The cost is based on the benchmark interest rate of domestic medium and long-term loans or a slight adjustment, at the level of 6% to 7%.
Under the current background of domestic interest rate marketization, the probability of such a time limit and capital leverage cost seems to be relatively small. The size and cost of leverage are the most critical factors for the success of PV power plant investments.
In addition, the rapid update of the technology in the photovoltaic industry also makes power plant investment as a project with a investment cycle of more than 20 years facing uncertainties such as future power generation efficiency, M&A technology, and equipment maintenance and update brought about by new technologies.
For the PV power plant assets, the A-shares are limited to increase the exit premium income space is limited, cross-border fixed increase is worth exploring
The realization of the investment income of photovoltaic power plants is nothing more than the holding of the operation due and transfer.
Photovoltaic power generation projects have an average period of 15 to 20 years, which may be too long for most investors. At present, in addition to the "national team players", investors who are willing to hold maturity are estimated to be rare. Therefore, obtaining income through transfer or docking with the capital market after completion is a way for most investors to achieve income.
In the current M&A and reorganization of the A-share market, the placement of PV power plant assets into listed companies in a private placement is a preferred exit channel for many power station investors to seek financing from various “golden ownersâ€, and power station investors often Describes the wonderful prospect of a premium exit.
However, based on the increasingly rational assumptions of the market, we are still relatively cautious about the additional premium of PV assets, especially in the domestic stock market. The stable income of photovoltaic power plants is its advantage, but on the other hand, it also means that it lacks imaginable growth space and limits the premium space. The power generation is stable, there is almost no maintenance cost in the follow-up, and the term is fixed. In theory, the value of PV power plant assets can be calculated by a very simple DCF model.
If you have to say some imagination of photovoltaic power plant assets, then there is nothing more than the rise in electricity prices and the cost of refinancing. The expectation of long-term rise in electricity prices is certainly there, but looking back at the fluctuations in coal prices and electricity prices over the past decade, we still believe that electricity prices will still be under the strict supervision of the government. After all, for China, a big manufacturing country and a populous country. The impact of electricity prices on inflation is too great.
Another imaginary space is the reduction of long-term financing costs in the future, and the gains from refinancing, but this requires the market to build sufficient confidence in the future long-term stable growth of the domestic macro economy, and to build this confidence during the current domestic economic transformation. time. Considering that the investment for the purpose of loading assets into listed companies usually has a limited duration, on average, about two years, whether it can wait until the domestic economic situation is truly stable is indeed a question mark.
Of course, another way to reduce financing costs is to open up channels for cross-border financing, such as listing assets in Hong Kong or major international capital markets, and replacing domestic financing through foreign currency financing, which may be a path that can be explored at present. Especially for investors who already have an overseas listing platform.
The right asset is a "premium" asset
In the long run, in a mature market environment, any investment cannot circumvent the basic principle of the investment of “risk and benefit matchingâ€. Even if some investments have short-term arbitrage space, they will be quickly repaired by the market. Therefore, for investors, assets are not good or bad, but only inappropriate, in line with their own investment philosophy. Being able to match the investor's risk-return preferences is the right asset, which is a "premium" asset.
Therefore, the author believes that long-term, stable income photovoltaic power plant investment, for insurance companies, social security funds and other institutions, is undoubtedly a very suitable asset allocation choice, which is conducive to these institutions to conduct relatively stable asset and liability management and portfolio.
Of course, from the operational level, there are still some problems to be solved in guiding the insurance companies and social security funds to participate in the investment field of photovoltaic power plants.
For example, the standardization of assets. As of now, because PV power plant assets are not standardized financial assets, if insurance funds or social security fund investments want to intervene, they can only use indirect investment methods, such as the LP method of investing in photovoltaic power station funds. However, non-standard investment methods will limit the scale of participation, the efficiency of decision-making, the liquidity of assets, and the rapid consideration of risks to a certain extent. At the same time, non-standard assets have high disposal costs and poor liquidity, which is not conducive to the adjustment of investment portfolio by insurance companies or social security funds. Therefore, through the securitization method, the stable cash flow of PV power plant assets will be packaged and secured, and the securities will be placed on the main trading platform for on-market transactions, which will undoubtedly attract and facilitate the wider participation of insurance companies and social security funds. .
In the process of standardization of photovoltaic power plant assets, there is also an indispensable supporting measure, which is photovoltaic power station insurance. After all, although photovoltaic power generation is stable in theory, there are some risk factors that affect it as the basic assets of standardized securities, such as abnormal changes in lighting levels and long-term stability of component quality. To solve these problems, insurance cannot be separated.
Moreover, by introducing and promoting the PV power station insurance system, and even using it as a compulsory means, it is also possible for insurance companies to increase the number of new insurance contracts and expand their business scope. At the same time, the insurance system will further effectively stimulate and constrain the upstream of the photovoltaic power station, that is, the photovoltaic manufacturing industry, and pass the product access examination under the compulsory insurance system, urging upstream manufacturing to improve the technical level and ensure product quality, thereby making photovoltaic The industry's upstream and downstream industry chains form a benign interaction and promotion mechanism.
By perfecting the supporting measures, the insurance company and the social security fund will be widely involved in the investment link of the photovoltaic power station, and the appropriate investment will be used to make suitable investment, which will form a relay with the social funds that have been invested in the previous period, which will greatly promote the development of China's photovoltaic power generation industry. In an attempt to win and win, the institutions that try to do so will undoubtedly have more lucrative benefits and bring more stable and sustainable development to the photovoltaic industry.
The development of China's photovoltaic industry in the past decade
With the global focus on energy and environmental crises, the photovoltaic industry has experienced a rapid development stage in the past decade. At the same time, China's economy is also experiencing leaps and bounds, and its economic aggregate ranks second in the world, second only to the United States. As a major manufacturing country and a major energy consumer in the world, China's photovoltaic industry has played a very important role in the rapid development of the world's photovoltaic industry, and has also experienced several stages of industrial development.
On January 10, 2014, at the China PV Industry Integration Symposium hosted by China Minsheng Bank, Mr. Wang Bohua, Secretary General of China Photovoltaic Industry Alliance, summarized the important stages of the development of the photovoltaic industry over the past decade. Review, as shown in Figure 1.
Rapid development period (2004~2008)
With the introduction of the EGG Act in Germany, European countries have heavily subsidized the support of the photovoltaic power generation industry. In this context, China's photovoltaic manufacturing industry has rapidly used foreign markets, technologies and capital to form scale. In 2007, China overtook Japan to become the world's largest producer of photovoltaic power generation equipment. A group of photovoltaic manufacturing enterprises represented by Suntech Power and Jiangxi Saiwei have successively landed in the US capital market and have been sought after by the market. The price of polysilicon, the core raw material for photovoltaic power generation equipment, exceeded $400/kg.
First adjustment period (2008~2009)
The global financial crisis broke out, the financing of photovoltaic power plants was difficult, and the support policies in Europe and other countries such as Spain caused the demand to decline. China's PV manufacturing industry experienced a severe decline, and the price of products fell rapidly. The price of polysilicon fell to about. The level of 40 USD / kg.
Explosive recovery period (2009~2010)
In the background of the expected reduction in the subsidies for photovoltaic power generation in the German and Italian markets and the fall in the price of photovoltaic products caused by the financial crisis, the wave of rushing out of the market broke out and the market recovered rapidly. At the same time, China has issued a 4 trillion yuan bailout policy, and the photovoltaic industry has been positioned as a strategic emerging industry, which has spawned a new round of investment in the photovoltaic industry. The price of polysilicon, which is a barometer of the photovoltaic industry, has also rapidly rebounded to the level of $90/kg.
Industry adjustment period (2011~2013)
The explosive growth of the previous stage led to the rapid growth of photovoltaic manufacturing capacity, but the slowdown in market growth caused by the reduction of subsidies in Europe led to a serious phased surplus in photovoltaic manufacturing, a sharp decline in product prices, and trade protectionism. Rise. China's photovoltaic manufacturing industry has once again experienced setbacks and almost fell into losses throughout the industry. Polysilicon prices fell to a record low of about $15/kg during this period.
The industry is gradually recovering (2013-present)
Japan’s unprecedented efforts to subsidize photovoltaic power generation have eased the contradiction between supply and demand in the market. At the same time, the Sino-European PV trade disputes were resolved through a commitment mechanism. China's photovoltaic industry support policy represented by the State Council's No. 24 document was intensively introduced, and supporting measures were quickly implemented. China has thus set off a wave of photovoltaic installations, driving the price of photovoltaic products to start to rise, and the price of polysilicon has risen slightly to about US$18/kg.
The core issue of the photovoltaic industry - serious subsidy dependence
From the historical stage of the development of China's photovoltaic industry, it is obvious that the photovoltaic industry's dependence on subsidy policies and the dependence of subsidy policies on the industrial cycle and ups and downs due to dependence on subsidies.
With the rapid development of the photovoltaic industry and the improvement of technology level in the past decade, the efficiency of photovoltaic power generation has been continuously improved, and the price of components has continued to fall, but the cost of photovoltaic power generation is still high compared to other power generation methods. Among them, the cost of thermal power generation is about 0.4 yuan / kWh, the cost of power generation of hydropower is 0.2 ~ 0.3 yuan / kWh, the cost of generating electricity for nuclear power is 0.3 ~ 0.4 yuan / kWh, and the cost of generating electricity for wind power, one of the important new energy sources, is 0.6 yuan / kWh, however, the cost of photovoltaic power generation is still as high as 0.9 ~ 1.0 yuan / kWh. Therefore, at least under the current technical level, photovoltaic power generation still relies heavily on government subsidies, and has no ability to separate from subsidies and independently participate in the power market competition.
At the same time, the "only horses are the vision" of subsidies further leads to the imbalance of risk distribution between the upstream and downstream of the photovoltaic industry chain. One end is the relatively low risk of photovoltaic power generation applications, while the other end is the relatively high risk of PV manufacturing.
Since the policy subsidy is easily affected by factors such as the macroeconomic cycle, the economic weakness is likely to lead to the tightening of subsidies, and Europe is the most lively example in front of us.
The weakening of subsidies has an impact on investors of PV power plants, but at best it is to allow investors to reduce the scale of investment or not to invest, at most to disrupt investment plans, not too much loss; but for those who have already put into production and enjoyed subsidies The policy of photovoltaic power plants has almost no impact. The so-called "old-age policy, newcomers and new policies", the subsidy policies that have been enjoyed by the power plants have generally promised a duration and can still maintain the original income level. Therefore, although the changes in policies bring uncertainty to the development of the photovoltaic industry, the impact on the application of photovoltaic power generation is relatively small.
However, for upstream PV manufacturing, changes in subsidy policies have had a huge impact. Photovoltaic manufacturing, especially in the most upstream polysilicon manufacturing industry, is a highly capital-intensive industry with huge investment. In the period of increasing and continuing subsidies for photovoltaic power generation, due to the active investment in power plants, the demand for upstream components and raw materials is strong, and the photovoltaic manufacturing industry has relatively stable and good revenue space. The polysilicon industry has even experienced a profiteering stage. However, once subsidies are cut, power station investment will slow down or require upstream products to cut prices. In the upstream and downstream games, because of the huge upstream production capacity, the game between manufacturers and power station investors is high and low, and the risks are naturally transferred to the upstream manufacturing process. Under this circumstance, it is necessary for PV manufacturing enterprises to adjust prices to accelerate sales, make up for huge fixed costs, maintain book profits, and “deliver homework†to the capital market, while maintaining the operation of the capital chain. However, if the subsidy adjustment is too large, the weak demand will cause the price of the product to fall so that even the variable cost cannot be covered, and the manufacturing company will generate a cash loss. In order to prevent the transition from blood loss, the company will only be able to stop production, or use improper means such as shoddy, but this is tantamount to drinking and quenching thirst, and can not continue. At the same time, corporate operating performance declines, and the tight capital chain will lead to domino effect, such as high capital market financing costs, refinancing difficulties, commercial credit tightening of upstream raw material suppliers, and defensive credit contraction of financial institutions. Manufacturing companies are undoubtedly worse. When negative energy is accumulated to a certain extent, the company will eventually collapse. The example of the former Chinese PV industry pioneer and leader "Shangde Power" is just around the corner.
Prospects for China's PV industry investment
In the second half of 2013, the State Council issued the “Several Opinions of the State Council on Promoting the Healthy Development of the Photovoltaic Industryâ€, which is commonly referred to as Circular 24. After that, the supporting measures and policies of the relevant departments have also been put in place. The most important documents and policies include the Notice of the Ministry of Finance on Relevant Issues Concerning the Implementation of Electricity-Subsidy Policies for Distributed Photovoltaic Power Generation, and the National Development and Reform Commission's Matters Concerning the Adjustment of Additional Standards for Renewable Energy Price and Environmental Electricity Price. Notice and the Notice of the National Development and Reform Commission on Promoting the Healthy Development of the Photovoltaic Industry by Playing the Role of Price Leverage. The core contents of these support policies include: the target of PV installed capacity will be raised from 21GW to 35GW during the “Twelfth Five-Year Plan†period; the subsidized electricity price level will be determined, and the on-grid price of large-scale grid-connected photovoltaic power stations will be 0.9 yuan/kWh and 0.95 yuan respectively in three regions. / degree, 1.0 yuan / kW of on-grid electricity price, distributed photovoltaic power generation enjoy 0.42 yuan / kW of full-power subsidies, self-use part of the local coal-fired units benchmarking on-grid price online access policy; clear subsidy period of 20 years; clear and substantial The source of subsidy funds is to explicitly raise subsidy funds by charging non-resident electricity users with renewable energy tariff surcharges, and raise the existing standard from 8% to 1.5 cents/degree.
In the simple reading, all of them are good for the photovoltaic industry, and the capital market is very responsive. Take a look at the rising trend of the A-share PV concept stocks before and after the 2013 policy.
Nowadays, the distance policy has been released for more than half a year. With the steady market sentiment, we should calm down and carefully consider whether this kind of benefit is quick-acting, or Yanshou Dan, or returning to the old age.
The high uncertainty of photovoltaic manufacturing has not been alleviated
China's support policies have spurred the development of the domestic PV installation market, which will help change the pattern of China's PV manufacturing market, which is almost "two-headed, subject to people." Compared with China's PV manufacturing industry, it has already ranked first in the world as early as 2007, and the growth of China's PV installed capacity is relatively slow.
At the end of 2009, the cumulative installed capacity of photovoltaics in China was only 0.3GW. Insufficient domestic demand has made China's huge PV manufacturing industry face a double risk, in addition to relying on subsidies and relying heavily on the external market.
After experiencing the first adjustment period of the PV industry in 2008~2009, China launched the "Golden Sun" demonstration project in 2009, which opened the prelude to the acceleration of China's PV installation. In 2011, 2.5GW was added, and in 2012, 5.0GW was added. With the introduction of the new support policy of 2013, the newly installed capacity was 10GW (the newest in the world), and it is expected that the installed capacity will not be lower than 10GW in the next three years.
What is the concept of 10GW? China's existing PV manufacturing capacity is about 35~40GW per year, which means that the domestic demand is equivalent to 25%~30% of the existing annual production capacity of China's PV manufacturing industry. Although this ratio is not too high, compared with the situation of relying on overseas markets in the past few years, the new policy will definitely have a significant effect on reducing the risk of external market dependence of China's PV manufacturing industry. Of course, the new demand may also stimulate some resurgence of backward production capacity, or once again set off a boom in the photovoltaic manufacturing industry to increase production capacity. However, the policies introduced this time are actually positive and negative, in addition to encouraging photovoltaic power generation applications, but also for the photovoltaic manufacturing industry. Constraint restrictions have clearly improved the threshold for entry, but the market is more willing to mention "good" and "encourage". This part of the policy to control production capacity is less mentioned by the media.
China's PV manufacturing industry has reduced the risk of dependence on the external market, but the inherent subsidy-dependent risk and the weak situation of the game with the downstream PV power generation have not changed substantially, and still show high-risk characteristics.
At the same time, photovoltaic power generation technology is still in a relatively rapid technological change period, new technologies and processes may appear at any time, such as the transformation of polysilicon preparation process routes, or technological breakthroughs in thin film materials, existing technologies and already put into production capacity. Companies may face the risk of being replaced at any time, which further increases the uncertainty of PV manufacturing investment.
Therefore, in addition to the industry giants with deep technical innovation strength, other institutions should be cautious if they consider investing in photovoltaic manufacturing.
The key to PV power plant investment is financial leverage. The biggest uncertainty risk is rapid technological advancement.
Let's talk about the downstream of the photovoltaic industry, that is, the investment in photovoltaic power plants.
The advantages of PV power plant investment are: one investment, long-term return, low follow-up operation and maintenance cost, and stable income. In particular, the latest domestic subsidy policy was introduced, and the 20-year subsidy period was clarified, further consolidating the stability of investment income.
Many domestic analysts and research institutes have calculated and analyzed the return rate of domestic PV power plant investment based on the domestic subsidy price level and the existing power station investment level. The results show that the project return rate of PV power plant investment can basically By 10%, the return on capital can even exceed 15%.
However, since it is measured, there are some key assumptions, such as the leverage ratio of the project and the price of the leverage. After reading several well-known calculation reports in detail, we can see that these all assume that the total investment of the project can get 70%~80% of long-term loan support, the deadline is 8~10 years, and the loan is annualized. The cost is based on the benchmark interest rate of domestic medium and long-term loans or a slight adjustment, at the level of 6% to 7%.
Under the current background of domestic interest rate marketization, the probability of such a time limit and capital leverage cost seems to be relatively small. The size and cost of leverage are the most critical factors for the success of PV power plant investments.
In addition, the rapid update of the technology in the photovoltaic industry also makes power plant investment as a project with a investment cycle of more than 20 years facing uncertainties such as future power generation efficiency, M&A technology, and equipment maintenance and update brought about by new technologies.
For the PV power plant assets, the A-shares are limited to increase the exit premium income space is limited, cross-border fixed increase is worth exploring
The realization of the investment income of photovoltaic power plants is nothing more than the holding of the operation due and transfer.
Photovoltaic power generation projects have an average period of 15 to 20 years, which may be too long for most investors. At present, in addition to the "national team players", investors who are willing to hold maturity are estimated to be rare. Therefore, obtaining income through transfer or docking with the capital market after completion is a way for most investors to achieve income.
In the current M&A and reorganization of the A-share market, the placement of PV power plant assets into listed companies in a private placement is a preferred exit channel for many power station investors to seek financing from various “golden ownersâ€, and power station investors often Describes the wonderful prospect of a premium exit.
However, based on the increasingly rational assumptions of the market, we are still relatively cautious about the additional premium of PV assets, especially in the domestic stock market. The stable income of photovoltaic power plants is its advantage, but on the other hand, it also means that it lacks imaginable growth space and limits the premium space. The power generation is stable, there is almost no maintenance cost in the follow-up, and the term is fixed. In theory, the value of PV power plant assets can be calculated by a very simple DCF model.
If you have to say some imagination of photovoltaic power plant assets, then there is nothing more than the rise in electricity prices and the cost of refinancing. The expectation of long-term rise in electricity prices is certainly there, but looking back at the fluctuations in coal prices and electricity prices over the past decade, we still believe that electricity prices will still be under the strict supervision of the government. After all, for China, a big manufacturing country and a populous country. The impact of electricity prices on inflation is too great.
Another imaginary space is the reduction of long-term financing costs in the future, and the gains from refinancing, but this requires the market to build sufficient confidence in the future long-term stable growth of the domestic macro economy, and to build this confidence during the current domestic economic transformation. time. Considering that the investment for the purpose of loading assets into listed companies usually has a limited duration, on average, about two years, whether it can wait until the domestic economic situation is truly stable is indeed a question mark.
Of course, another way to reduce financing costs is to open up channels for cross-border financing, such as listing assets in Hong Kong or major international capital markets, and replacing domestic financing through foreign currency financing, which may be a path that can be explored at present. Especially for investors who already have an overseas listing platform.
The right asset is a "premium" asset
In the long run, in a mature market environment, any investment cannot circumvent the basic principle of the investment of “risk and benefit matchingâ€. Even if some investments have short-term arbitrage space, they will be quickly repaired by the market. Therefore, for investors, assets are not good or bad, but only inappropriate, in line with their own investment philosophy. Being able to match the investor's risk-return preferences is the right asset, which is a "premium" asset.
Therefore, the author believes that long-term, stable income photovoltaic power plant investment, for insurance companies, social security funds and other institutions, is undoubtedly a very suitable asset allocation choice, which is conducive to these institutions to conduct relatively stable asset and liability management and portfolio.
Of course, from the operational level, there are still some problems to be solved in guiding the insurance companies and social security funds to participate in the investment field of photovoltaic power plants.
For example, the standardization of assets. As of now, because PV power plant assets are not standardized financial assets, if insurance funds or social security fund investments want to intervene, they can only use indirect investment methods, such as the LP method of investing in photovoltaic power station funds. However, non-standard investment methods will limit the scale of participation, the efficiency of decision-making, the liquidity of assets, and the rapid consideration of risks to a certain extent. At the same time, non-standard assets have high disposal costs and poor liquidity, which is not conducive to the adjustment of investment portfolio by insurance companies or social security funds. Therefore, through the securitization method, the stable cash flow of PV power plant assets will be packaged and secured, and the securities will be placed on the main trading platform for on-market transactions, which will undoubtedly attract and facilitate the wider participation of insurance companies and social security funds. .
In the process of standardization of photovoltaic power plant assets, there is also an indispensable supporting measure, which is photovoltaic power station insurance. After all, although photovoltaic power generation is stable in theory, there are some risk factors that affect it as the basic assets of standardized securities, such as abnormal changes in lighting levels and long-term stability of component quality. To solve these problems, insurance cannot be separated.
Moreover, by introducing and promoting the PV power station insurance system, and even using it as a compulsory means, it is also possible for insurance companies to increase the number of new insurance contracts and expand their business scope. At the same time, the insurance system will further effectively stimulate and constrain the upstream of the photovoltaic power station, that is, the photovoltaic manufacturing industry, and pass the product access examination under the compulsory insurance system, urging upstream manufacturing to improve the technical level and ensure product quality, thereby making photovoltaic The industry's upstream and downstream industry chains form a benign interaction and promotion mechanism.
By perfecting the supporting measures, the insurance company and the social security fund will be widely involved in the investment link of the photovoltaic power station, and the appropriate investment will be used to make suitable investment, which will form a relay with the social funds that have been invested in the previous period, which will greatly promote the development of China's photovoltaic power generation industry. In an attempt to win and win, the institutions that try to do so will undoubtedly have more lucrative benefits and bring more stable and sustainable development to the photovoltaic industry.
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