Photovoltaic market has entered the cold winter domestic demand reengineering industry vitality

Recently, China's photovoltaic companies have begun to make waves. An alert issued on the website of the Ministry of Commerce of the People's Republic of China on December 19 suggested that India may initiate an anti-dumping investigation against solar panels originating in China within one month. Previously, Europe's cuts in solar subsidies and the United States' launch of the "double counter-survey" have caused a heavy blow to China's photovoltaic industry. In addition, the contradiction between overcapacity in the domestic photovoltaic industry has become increasingly prominent, and once the solar photovoltaic industry is in full swing into the winter.

In 2010, China's solar cell output reached 8,000 megawatts, which accounted for 50% of global production. In the same period, the newly installed capacity of solar photovoltaic systems was only 520 megawatts, and the rest was used for export. The export ratio was as high as 94%. The low domestic installation rate and high degree of export dependence are both the helpless predicament facing the PV industry and an important opportunity for future development.

Capital pursuit of photovoltaic industry

In the past few years, China's solar photovoltaic industry has entered a period of sustained growth, and the scale of PE investment in this area has also continued to grow. According to data from China Venture's China Investment Group, from 2005 to now, China's PV industry disclosed a total of 76 cases of VC/PE**, totaling US$2.121 billion. Among them, a total of 16 VC/PE** cases were disclosed in 2008, totaling 656 million U.S. dollars, and the number and size of enterprises have reached the highest level in history. From 2011 to now, 14 cases have been disclosed, totalling 445 million U.S. dollars.

In the capital market, from 2005 to the present, a total of 24 companies in the photovoltaic industry have achieved IPOs in the global capital market with a cumulative total of US$3.968 billion. Of these, 17 companies have achieved IPOs in the US-based offshore capital markets. In 2010, a total of 6 companies were successfully listed. The total amount was 1.116 billion U.S. dollars, which was the highest level in history. Since 2011, there have been three companies listed on the market, totaling 544 million U.S. dollars.

Despite continued pursuit of capital, the “cold winter” of the photovoltaic market has quietly come. Since the beginning of this year, with the deepening debt crisis in Europe, Germany, Italy and other European countries have lowered their subsidies for the photovoltaic industry. The European market, which originally occupied more than 70% of the world's photovoltaic installed capacity and 80% of the country's photovoltaic cell exports, has seen a sharp drop in demand. In mid-October of this year, 7 solar cell manufacturers such as Solar World jointly filed a complaint requesting a “double counter” investigation of China’s photovoltaic cells exported to the United States and levying a high punitive tariff of over 100%. On November 9, the U.S. Department of Commerce announced that it had initiated a US-registered solar battery project for China and launched the first “double counter” investigation on China’s clean energy products. 14 domestic PV companies including Suntech and Yingli responded to the case. On December 3, the U.S. International Trade Commission made a preliminary ruling on US anti-dumping and anti-subsidy measures against solar cells in China, and determined that China's imports of U.S. solar cells caused substantial damage to U.S. internal industries. If the "double reverse" is successful, the EU is likely to follow suit, which will bring a heavy blow to the Chinese PV industry.

The chill of the photovoltaic industry is particularly evident in the performance of listed companies. Among the 11 Chinese PV companies listed on the U.S., except for DQ.NYSE and JKS.NYSE, the remaining nine companies reported losses in the third quarter with cumulative losses of US$460 million. The profit also dropped sharply year-on-year. Among them, Suntech Power (STP.NYSE) suffered a loss of 116.4 million U.S. dollars in the third quarter, becoming the most serious photovoltaic company in the country. At the same time, the third-quarter performance of domestic listed photovoltaic companies also saw a significant decline, and both Sunflower and Topsun Energy suffered losses in the third quarter.

Domestic demand generates investment opportunities

The crisis itself is also an opportunity. The “winter” of the market will accelerate the consolidation of the industry. Enterprises with low productivity and efficiency, low management levels and obsolete business concepts will face the risk of being eliminated. This is conducive to promoting the adjustment and upgrading of the entire industry. In the long term, it will promote the sustainable development of the photovoltaic industry. In response, the state departments have also issued relevant policies to promote the industry in a more orderly and healthy direction. For example, the “Polysilicon Industry Access Requirements” refers to the establishment of an industry access system to guide and regulate the healthy development of the domestic polysilicon industry.

In addition to industry consolidation, the more important means for the Chinese PV industry to survive the "winter" is to open up the domestic market and get rid of the embarrassing situation of photovoltaic raw materials and products "two ends out". In response, the country has obvious policy orientation. In addition, the introduction of a nationwide unified on-grid tariff and an increase in renewable energy prices also indicate that the domestic photovoltaic market is about to start.

Li Ling, an analyst at ChinaVenture Investment Group, believes that the two ends of the photovoltaic industry chain, namely polysilicon and photovoltaic power generation systems, have significant room for growth in the future. Among them, photovoltaic inverters, which are the core components of photovoltaic power generation systems, have greater investment value. At present, the global leader in photovoltaic inverter industry SMA accounts for more than 40% of the market share, domestic photovoltaic inverter can not open the overseas PV market. If the domestic photovoltaic market can start, it will bring unprecedented opportunities for development for the domestic photovoltaic inverter industry.