The second half of the global photovoltaic market or current machine

“The next five years will enter a stage of rational growth, turning the policy-driven city into a marketized market.”

Guest Wu Wucheng Vice Chairman and Secretary-General of Photovoltaic Committee of China Renewable Energy Society Su Weili Founder and Chairman of Tianhua Sunshine Holdings Co., Ltd. Xiao Xiaowei President of CSI (NASDAQ) CSI may become a milestone in China's PV market in 2011 One year. On August 1st, the National Development and Reform Commission released the long-awaited online benchmark price for the industry, which is considered as a key event in opening China's PV market.

However, it is worth noting that, since the first half of this year, the global photovoltaic market has also been experiencing a slump, the installation volume has been slow, and the prices of components, silicon wafers, and polysilicon have continued to decline. Many domestic small PV module manufacturers have stopped production or even stopped production. What are the reasons for the cold weather in the first half of this year? Has the global PV market entered the "second half"? What is the significance of China's introduction of photovoltaic benchmark on-grid tariff? Where will the future of global photovoltaics go? The Morning Post reporter invited Vice Chairman and Secretary-General of the Photovoltaic Committee of the Chinese Renewable Energy Society Wu Dacheng, Chairman of the Founder of Tianhua Sunshine Holdings Co., Ltd. Su Weili, CSI nasdaq President Xiaoqi Yao and Huatai United Securities Power Equipment. Wang Haisheng, chief analyst of the new energy industry, discussed these issues together.

This year is the "small year" of the photovoltaic market.

Oriental Morning Post: In your opinion, what is the difference between the PV market in 2011 and previous years? Is the global PV market now in a boom cycle?

Wu Dacheng: Obviously, there is a big change in the PV market in the first half of 2011 compared with previous years. Mainly because of the economic situation in Europe and some major adjustments in national policies for photovoltaic applications, the market has been depressed. This resulted in a significant drop in component supplier orders, reduced profits, and even no profit. As a result, system integrators began their price game and forced them to lower prices upstream.

Thus, the overall situation in the first half of the year is that the prices of all aspects of the industry chain have a downward trend. However, in the second half of the year, a new balance has been basically formed and the market is recovering.

I think the market in the second half of this year may be better than next year. In the second half of this year, Europe will recover relatively quickly. In addition, other emerging markets, including China's photovoltaic market, are also starting large-scale.

From a fundamental point of view, for the sake of environmental protection, energy conservation and emission reduction, and consideration of factors such as the increasing maturity of photovoltaic power generation technologies, I think that the overall trend of market development in the future is still good and there will be no disruptive changes.

Xiaoyan Xiao: I think the past year of 2010 was a rare year for the solar energy industry because the total installed capacity in the world in 2010 was more than double the number in 2009, and the price went up. This is different from what we all expected. Because solar energy, like all renewable energy sources, has to go into millions of households, its price must gradually go down, so that it can achieve parity Internet access. So 2010 is a very different year. In this context, I think that 2011 is a normal year because the solar industry has restored its original situation, which means that the market has a reasonable increase, but at the same time, it needs the manufacturers to work hard in terms of cost, technology, quality, and service. Therefore, this year's solar market will not be as good as it was in 2010.

Suvili: This year's Italy is similar to Spain's performance in 2008. The reason for this stagnation is that photovoltaics have developed so fast that the market was once saturated and the government’s financial resources were not available.

Another important market was also stalled earlier in the Czech Republic. Therefore, the two countries that have a good installed capacity in 2009 and 2010 will have relatively limited capacity to contribute in 2011.

In Germany, the world's largest photovoltaic application market, it was decided on June 30 that it would not lower its subsidies in the second half of the year. Prior to this, photovoltaic operators were basically waiting, so the performance of the German market in the first half of the year was not satisfactory.

Due to the small amount of installations in the first half of the year, Germany announced that it will not lower the on-grid tariff (FIT) until the end of 2011. In this case, Germany has once again become a main market. Then in July Bulgaria declared its FIT policy unchanged for 20 years. At this point, Bulgaria has become an emerging market, replacing the previous Czech market in Eastern Europe.

In addition, due to the European Union’s relief of the Greek debt crisis, Greece will also be an important supplement to the photovoltaic application market this year. Greece changed its subsidy policy in previous years this year, making the photovoltaic project more operational. It can be predicted that there will be a good growth in the Greek market this year.

In summary, Germany will resume its leading position in the second half of the year. The rise of Bulgaria and Greece will offset the decline in Spain and the Czech Republic. The market will be much better in the second half of the year.

Wang Haisheng: The overall boom of the PV market this year is a historically low one. Market growth has exceeded 20%, but component prices have fallen by 40%. Therefore, this year's market style is comparable to that of 2009 and is the market for PV. A "small year."

Market growth will not be faster next year Oriental Morning Post: The photovoltaic industry has experienced rapid growth in the first five years. What will happen in the next five years?

Wu Dacheng: The development of the photovoltaic market in the future will be relatively rational. As far as photovoltaics are concerned, both the government and the enterprises hope that the photovoltaic industry will grow rapidly. However, it should be noted that the main driving force of the global PV market is still the incentive and support of the policy. To promote PV utilization, you have to subsidize and you have to use funds. Whether this fund is withdrawn from the government's financial resources or digested from the whole network's sharing mechanism, you must have enough money to do this. With government financial funds, if the market develops too quickly, there will be gaps in the funds, causing economic burdens. If the whole network is used for sharing, if it develops too quickly, it will need to raise the price of electricity. If the increase is too large, it will have a major side effect on the entire economy. Therefore, it is necessary to grasp a certain degree.

After so many years of exploration, countries all over the world have summed up their experience in controlling photovoltaic development. For example, some countries represented by Germany have proposed that the on-grid tariffs should be tied with the market size. If the growth of photovoltaic uses is rapid, it will accelerate the reduction of subsidies and control the rhythm in this way.

I think that the substantial increase in the proportion of photovoltaic applications will occur at some time points, such as when the user side or even the high-voltage side achieves parity access. Before this, the speed of development of the photovoltaic market was mainly influenced by policies. So it will maintain a certain growth rate, but it will not be particularly fast.

Xiaoxiao Yan: For the next five years, it is difficult to make an expectation. Five years is a short period for the solar energy industry. I think that in the next five years, the photovoltaic industry will experience an integration period. During this period, for enterprises, the money will not be so good at first. In two or three years, the industry will be more orderly, and then there will be three to five large-scale photovoltaic companies with long-term strategies in the world. At the same time, the cost and price of solar energy products should continue to decline, making it easier to achieve parity. .

Su Weili: The previous five years were market dominated by policies. The photovoltaic market in the next five years is a marketized market. During this period, the market will exhibit the following characteristics: First, the cost of photovoltaic equipment will be reduced. In addition, it will be possible to achieve parity online access in different local markets in the next five years.

Wang Haisheng: We are optimistic about the medium term. It is expected that the cost of the photovoltaic market will approach that of traditional energy sources in the next five years. This will lead to an outbreak, but the next year may be more difficult, and the growth in market demand will still be more comparable. Slow, the price will still fall, so that the cost of photovoltaic power generation can get closer to traditional energy sources.

Oriental Morning Post: In your opinion, which markets in the world are in an expansion phase and which markets are beginning to shrink?

Xiao Xiaoyu: I think this year's German market is a steady state. The Italian market did not soar as many people expected, but compared with last year, the Italian market also grew this year. Compared with last year, the US market should also be fine. The Japanese market was affected by the previous earthquake, with some interruptions. The overall global market may be at a flat or slightly higher level than last year.

Wang Haisheng: It is now clear that several major European markets, including Germany, Italy and France, will achieve a very significant decline next year. In the next few years, we think that the European market will certainly be bad and the prices of components will come down. However, some emerging countries in the photovoltaic market like China and the United States will have significant increases in the next year, but this increase will be offset by the decline in European countries. Therefore, we think that the market should grow less in the next year.

Oriental Morning Post: Some time ago, from the polysilicon material to the final assembly, the prices of photovoltaic products at various stages all fell. What impact will this bring to the photovoltaic industry?

Wang Haisheng: What we really look at is the decline in the cost of electricity. The decline in the price of the entire system is the most important. Components currently account for about 60% of the system cost, so no matter what the price of such an industrial chain is from polysilicon to battery components. The decline should be very helpful to reduce the cost of electricity. Of course, at the same time as the inverter, bracket, and construction, we still feel that there is still a very large price drop.

Xiaoxiao Yan: We are a vertical integration company, but emphasis on the entire industry chain in the back-end, so the rational recovery of raw material prices is good for us, I think the whole solar industry is good.

Wu reached: The overall price reduction is normal. However, in the actual implementation process, although the market capacity continues to increase, the price reduction of photovoltaic products is not particularly significant. This will inevitably have some incentives, such as the last significant price reduction because of the impact of the international financial crisis. The price of this round was due to the reversal of the supply and demand relationship in the market, from the seller’s market to the buyer’s market.

Looking back at past history, we can see that when demand for photovoltaic applications grows rapidly, there will often be a phased supply shortage in the upper reaches, so that upstream product prices remain high. The high profit rate at this stage is not normal, and its downward conduction will cause the price of the end product to remain high. This would be detrimental to the further development of the photovoltaic market. The original design of the fixed price of electricity on the Internet is based on the expansion of the sales and production scale of photovoltaic products, and through the advancement of technology and market competition, its cost has been declining. That is, through the subsidy mechanism, the era of affordable Internet access has come. I think that as long as it does not affect the survival of the enterprise, the cost should be able to continue to decline, otherwise it loses its meaning.

Benchmark price should consider regional differences Oriental Morning Post: For the newly introduced 1.15 yuan and 1 yuan after the benchmark price of Internet access, do you think it can open China's photovoltaic application market, what is the significance of photovoltaic manufacturing?

Xiaoxiao Yan: Through our calculations, the once-per-day on-grid price may have a certain rate of return in some parts of China, but in some places it may not be profitable. So I think that on the one hand, the state will need to make some adjustments to the subsidy policy in the future. On the other hand, at the local level, such as the provincial level, some appropriate adjustments will be made according to the lighting conditions of the province, and different installation types, such as general For small distributed power generation, the roof system will cost a little more than the large one, but there will be no loss or cost of power transmission. In the future, it will also be worth making some adjustments. So, in general, this iconic event is very positive. The incident, but on the other hand, I also look forward to the central and local governments, to make some policy adjustments to these issues, making the policy for the photovoltaic industry more reasonable.

Wu reached: Recently, the on-grid tariff introduced by the National Development and Reform Commission attracted much attention. I personally think that the introduction of the on-grid tariff is not too early, but it is somewhat late. The main reason for the delay in the introduction of the report is that the cost of photovoltaic power generation is relatively high. Can the domestic economy be able to withstand it? Where does photovoltaic power generation stand in terms of its energy structure? How much is the electricity price on the Internet reasonable? How can the differences in different regions be balanced? For these issues, the relevant departments have been studying. Through the concession tender, it was conducted twice in total and it was to explore a so-called reasonable electricity price. However, there are often contradictions between the actual and the results. The calculations by the companies at the time of bidding are not only the economic reasons for investment recovery, but also other factors.

This matter is not prolonged. It is better to introduce such a price now. This is of positive significance. This electricity price can at least play a role in promoting the photovoltaic market. However, we also see that there may be some details on the operation of this policy. For example, differences in different regions. The second time the subsidy is not given, including the number of hours or the number of full hours. If this deadline is not given, it is obviously impossible for investors to measure the revenue. These must be gradually improved.

Oriental Morning Post: From polysilicon to downstream components, there has been a certain decline in the first half of this year. Do you think this means the industry's merger and reorganization opportunities?

Wang Haisheng: In fact, the degree of concentration in the overseas PV market is very high, but because it has been good in the past few years in China, large companies sometimes cannot easily expand their production capacity so much, so it is mainly in the midstream, from buying. Silicon material, that is, cut silicon, do a few components of the battery to do a lot of small and medium-sized enterprises, these companies are currently listed, we think we should be able to survive better, because they have a very good capital platform , especially as listed on the A-share market. Companies that are not yet listed may be squeezed out. There are about a few hundred PV companies now. I think the last few dozen will still be left.

Xiaoxiao Yan: I haven’t seen much yet. I don’t want to go for it. It should be a merger and reunification. Just like a marriage, it’s a matter of wishful thinking. It’s not a matter of forced marriage. It’s not fun when forced to fight. So I think the industry is such a The change has only just begun. For two or three months, the time is short. See it over time.