"The development of the PV industry last year could be described as 'mixed blessings,' but now it's a case of 'ice and fire,'" stated Wang Bohua, Honorary Chairman of the China Photovoltaic Industry Association, at the "2024 Mid-Year Review and Outlook Seminar" for the PV industry. On one hand, production and installation capacity have grown significantly, both in manufacturing and application. On the other hand, product prices, production value, and export volumes have all seen noticeable declines.
Industry experts have voiced that the Chinese PV industry urgently needs adjustment. They emphasize that it is better to act decisively and early, pushing for the elimination of outdated capacities and encouraging mergers and reorganizations. The industry also needs to transition from passive overseas expansion (1.0) to proactive global manufacturing (2.0).
Manufacturing Remains "Hot"
In the first half of this year, the PV industry's "fire" mainly manifested in the continued expansion of manufacturing and application scales. Specifically, in the manufacturing sector, the production of key components like polysilicon, wafers, cells, and modules saw year-on-year growth of over 30%. Polysilicon production reached approximately 1.06 million tons, up 60.6% year-on-year; wafer production was about 402 GW, up 58.9%; cell production was about 310 GW, up 37.8%; and module production was around 271 GW, up 32.2%.
Technological innovation in manufacturing remains active, especially in the cell sector, with new directions emerging. For example, LECO (Laser Enhanced Contact Opening)/LIF (Laser Induced Forward Transfer) technology is gradually replacing laser SE as the standard for TOPCon production capacity; silver-coated copper and copper electroplating technologies are further promoted; SMBB/0BB technology is applied more in cells and modules; several companies have launched BC cell products; and perovskite and perovskite tandem technologies are improving lab efficiency, helping to further reduce costs and increase efficiency in the industry.
In the application sector, PV installations reached 102.48 GW in the first half of the year, up 30.7% year-on-year, although the growth rate fell by 123%. Notably, for the first time in four years, there was a year-on-year decline in monthly new installations. March saw a decline of 4.27 GW, and April continued to decline by 0.28 GW compared to the same period last year. Wang Bohua attributed the March decline to the high base last year during the post-pandemic recovery and the rapid price drop this March, which led to some hesitation at the end-user level due to the lack of grid connection pressure. Additionally, expectations regarding policies and electricity prices affected some distributed new installations.
In terms of exports, PV products continued the trend of "volume increase, price decrease." In the first half of the year, China's total export value of PV products (wafers, cells, modules) was $18.67 billion, down 35.4% year-on-year. Export structure saw a decrease in the share of wafers and cells, while the share of module exports increased to 87%. Asia surpassed Europe as the largest export market for Chinese PV products in the first half of the year. Notably, Europe and Asia together accounted for over 80% of domestic module exports. Europe remained the largest export market for Chinese modules, but its market share dropped from 57.4% in the same period last year to 42.5%. Pakistan became the second-largest module export market in the first half, with significant growth in the Saudi Arabian market, ranking fifth among the top ten module export markets in the first half.
Despite these challenges, the China Photovoltaic Industry Association remains optimistic about the PV market, maintaining its earlier forecast of 390-430 GW of new global installations in 2024, with 190-220 GW expected in China.
Full Industry Chain Prices Encounter Cooling
However, the situation in terms of industry chain prices and overseas expansion has fallen into a "cold" state, with Wang Bohua describing it as "very severe." He noted that prices have dropped dramatically. In the first half of the year, polysilicon and wafer prices fell by over 40%; cell and module prices fell by over 15%, with polysilicon prices generally falling below companies' cost lines, and module bid prices continuing to decline.
In this context, companies face multiple challenges, and adjustments are not easy. Wang Bohua pointed out that "old players" in the industry face difficulties in transformation, dealing with heavy losses from old capacities, insufficient cost-effectiveness of technical upgrades, and slow clearance of outdated capacities. "Integrated" companies continue to bleed, while "new players" lack foundational capabilities, research and development technology, and intellectual property accumulation.
Wang Bohua mentioned that upgrading old production lines also faces practical difficulties: some lines have no room for upgrades, while others face high difficulty and low cost-effectiveness in modifications and debugging.
Overseas, trade protection issues continue to impact the export of domestic PV products, with Chinese companies' overseas capacities also encountering trade barrier problems.
Industry Adjustment Should Be Decisive and Swift
"Competition within and outside the industry is fierce, and the industry needs to 'lighten the load.' Adjustments should be decisive and timely, and the consolidation period should not be too long," Wang Bohua suggested. Industry management should guide the construction of advanced capacities, local governments should strictly control unreasonable market interventions, companies should cautiously invest in new projects, targeted acquisitions of cross-industry companies exiting the industry should be encouraged, and financial institutions should avoid "blood transfusions" to capacities that are about to be cleared. Promoting the clearance of outdated capacities and encouraging mergers and reorganizations is crucial.
Gao Jifan, Chairman of Trina Solar, proposed that the PV industry will undergo fierce competition in capacity clearing, and the whole society should actively guide better industry integration. "When guiding industry clearing, local governments and financial institutions should not simply support enterprises that are already in trouble or about to be cleared, but rather should guide leading enterprises in integrating and merging these companies, accelerating industry clustering, breaking the past fragmented and chaotic situation, and leading the industry to a more orderly and healthy development path, making the invested social funds and resources more valuable," Gao Jifan said.
Cooperation in overseas expansion and global manufacturing will also be key to breaking through in the PV industry. "The industry needs to transition from passive overseas expansion (1.0) to proactive global manufacturing (2.0)," said Qian Jing, Vice President of Jinko Solar. Many countries want Chinese PV companies' technology, experience, systems, and talent to help them form their own closed-loop industry chains, rather than just needing Chinese products. Local manufacturing, green electricity manufacturing, local service teams, and one-stop solutions for PV and storage are what are needed.
"Previously, the industry's definition of 'going out' was 'selling out,' now 'going out' means 'manufacturing out.' It involves moving from solo efforts to leveraging collective strength, from wholly-owned to joint ventures," Qian Jing said.
Lan Tianshi, Co-CEO of GCL Technology Holdings Limited, believes that while PV product globalization has been ongoing for many years, industrial globalization has just begun. Globalization is a must, but the possibility of large-scale manufacturing in a single market is decreasing. China's biggest advantage in PV lies in industrial chain coordination, where the value created by coordinated efforts in PV, including PV storage and PV hydrogen, far exceeds just building a factory. Coordinated efforts by PV enterprises going abroad can create more valuable, lower-cost, and more advantageous coordinated industries worldwide.
Moreover, many experts pointed out that unlike the previous "huddling for warmth," dispersed factory building may become the optimal solution for "capacity going abroad."
"Avoid clustering when Chinese PV goes abroad," said Chen Gang, Chairman of Aiko Solar. Lu Chuan, Chairman of Chint New Energy, similarly believes that if industries cluster in one country, that country will become the next target for trade barriers, requiring constant relocation.
Source：China Electronic News