Xinhua Finance and Economics Nanjing, April 25th (Reporter Zhu Cheng) As of April 20th, 23 photovoltaic companies including Jingke Energy and GCL Integration have successively released their 2023 annual reports. Among them, equipment provider Quartz Group's net profit attributable to the parent company surged by 378.92% year-on-year, while battery packaging company Mingguan New Materials's net profit decreased by 122.76% year-on-year, showing obvious performance differentiation characteristics.
Recently, reporters interviewed several industry insiders and learned that due to the fierce competition in photovoltaics, the industry as a whole is under pressure to move forward, and this year has accelerated the reshuffle process. Several industry insiders have stated that as the crystalline silicon photovoltaic PERC technology approaches the ceiling of power generation efficiency, exploring the next generation of photovoltaic technology has become a common choice for the industry.
Component quotations hit a new low point
Recently, the news of Longji Green Energy and GCL Technology signing a large order worth over 20 billion yuan has attracted widespread attention in the photovoltaic industry. Song Hao, Assistant Vice President of GCL Technology, believes that this is not only a normal action of routine long orders from both sides, but also reflects the fierce competition in the red sea of crystalline silicon photovoltaics. "The current lowest component quotation has fallen below 9 cents per watt, which is lower than the production cost of most enterprises, and the pressure has been transmitted upstream."
A set of data can reveal the current fierce competition. In 2023, the annual production of crystalline silicon modules in China reached 499GW. According to data released by the International Energy Agency, the global photovoltaic installed capacity in the same year was 420GW. In the first two months of this year, China's polysilicon production was about 330000 tons, and the production of crystalline silicon components was 76GW, a year-on-year increase of 39.4%. Cao Renxian, Chairman of Sunshine Power, stated that in recent years, China's photovoltaic industry has rapidly expanded, and product prices have dropped too quickly. This has put great pressure on the survival of many enterprises. In addition, downstream non-technical costs have risen instead of falling, and the dividends of the decline in industry chain prices have not effectively transformed into returns on project investment to a certain extent.
It is worth noting that in the eyes of some industry insiders, the demand for photovoltaic modules in the global market is still maintaining a rapid growth trend. The main reason for the industry's "price war" is not due to insufficient demand, nor is it due to the clearance of old technologies during the iteration process of new and old technologies. Instead, it stems from the high degree of homogenization on the supply side, and enterprise competition can only choose to force production capacity to be cleared through price.
"Currently, many enterprises are exploring integrated development, which may seem to reduce costs, but in reality, due to a lack of professional ability, it is difficult to cover all aspects, and it is easy to fall into a closed situation, resulting in insufficient professional innovation ability and a lack of differentiated competitiveness for enterprises." said Ge Hengfeng, partner of Yida Capital.
This risk can be seen in the debt ratio of many photovoltaic companies. The reporter found through searching based on the industry classification of CITIC Securities that, under the overall method calculation, the asset liability ratio of the photovoltaic sector increased by over 9% at the end of 2023 compared to the beginning of 2022. According to the third quarter report of 2023, the asset liability ratio of the leading enterprise Longji Green Energy was 56.35%, while Jingke Energy reached 73.29%.
The risks in the industry have raised concerns in the capital market. The Photovoltaic Concept Index (885531) shows that since reaching a historical high of 3718.5 in August 2022, the closing price on April 22, 2024 was only 2430.47, a drop of more than one-third. Several industry insiders have stated that the photovoltaic industry, which is heavily invested in assets, is facing accelerated reshuffling due to a lack of capital support.
Where will the next generation technology go
In the current era of intensified competition, seeking productivity from technology has become a choice for many enterprises. As traditional P-type batteries are approaching the limit of power generation efficiency, more and more companies are betting on the next generation of photovoltaic technology, presenting a parallel development trend of multiple technology routes such as TOPcon (an N-type silicon wafer battery technology), HJT (heterojunction battery), perovskite, CIGS (copper indium gallium selenium), etc. Among them, TOPcon and HJT batteries inherit existing crystalline silicon technology, which is currently the focus of industrialization for major enterprises. For example, companies such as Jingke Energy and Trina Solar choose TOPCon, while Dongfang Risheng and others are optimistic about HJT battery technology.
"Under the halo of successful crystalline silicon photovoltaics, major domestic photovoltaic companies have increased their research and development efforts in next-generation photovoltaic technology, presenting a diversified development trend of new technologies such as HJT, perovskite, CIGS, TOPcon, etc." said Zhong Dalong, Technical Director of Solar Energy at Beijing Low Carbon Clean Energy Research Institute.
It is worth mentioning that in addition to crystalline silicon batteries such as HJT and TOPcon, thin film batteries such as perovskite and CIGS are also increasingly receiving market attention.
During the reporter's research, it was found that the perovskite thin film battery developed by Taisho Microelectronics is as thin as hard cardboard and can generate electricity under weak light such as desk lamps. A 100 MW production line has been built in Xiamen. The CIGS thin-film solar cell developed by Shenghuilai Nanjing Energy Technology Company weighs only 1.5 kilograms per square meter. The battery folded into a trolley box can meet the daily electricity needs of an ordinary household.
"Flexible solar cells are flexible and foldable, lightweight, and can be applied in areas such as rooftops of buildings, car roofs, walls, and street lights, with the potential to generate electricity from all things." Sun Hongliang, President of Shenghui Lai, said that the company is cooperating with enterprises such as State Power Investment Corporation to explore the construction of offshore floating power stations, which can enable ocean going ships to use clean electricity in countries with power shortages.
Flexible solar films can not only be used alone, but also have higher potential for improving photovoltaic conversion efficiency compared to crystalline silicon cells. They can be stacked with crystalline silicon to enhance the upper limit of conversion efficiency of existing photovoltaic products. Song Hao stated that the company's newly built GW level perovskite module production line has laid the foundation and started construction. The company has signed agreements with multiple companies to develop stacked batteries.
Intensified intellectual property disputes
Although photovoltaic companies are trying to find a way out of technological innovation, reporters found in interviews that intellectual property disputes between companies have also increased.
"The technology iteration in the photovoltaic industry is very fast. In this situation, if innovation is not protected as it should be, it will dampen the enthusiasm of enterprises," said Yao Ziran, the general legal advisor of Tianhe Solar Energy Co., Ltd.
Recently, patent infringement lawsuits in the photovoltaic industry have been common. Recently, TCL Central's equity holding company Maxeon filed a lawsuit against CSIQ, the controlling shareholder of Atlas, over three patents. Last year, Maxeon's subsidiary also filed a patent infringement lawsuit against Tongwei Solar Energy (Hefei) Co., Ltd. and its subsidiaries.
"The competition in the domestic photovoltaic industry is fierce, and companies poach people from each other, making new technologies generally only 'fresh' for 3 to 6 months. This makes it difficult for cooperation that could have been achieved through patent exchange when facing international competition." Song Hao said.
Industry insiders such as Yao Ziran suggest that the national level should strengthen positive guidance on enterprise intellectual property protection, crack down on intellectual property infringement cases with severity, create a clean and positive industry atmosphere through typical precedents, and encourage cooperation through industry self-discipline and strengthening cross authorization of intellectual property. At the same time, more application pilot projects will be provided in a project-based manner, providing opportunities for testing and improving different technological routes in practical combat.