Data recently released by the National Energy Administration shows that in the first quarter of this year, the newly installed and grid-connected capacity of domestic photovoltaics reached 33.65GW, a year-on-year increase of 154.8%. So far, China's cumulative installed photovoltaic capacity has reached 425.89GW, surpassing the installed hydropower capacity of 415.46GW, leaping to become the second largest power source in the country.
The data of photovoltaic enterprises is also very impressive. The 2022 annual reports released by 77 listed companies in the photovoltaic sector show that the total operating income of these enterprises increased by nearly 490 billion yuan compared with the previous year, reaching 1.26 trillion yuan. Among them, 25 companies achieved operating income exceeding 10 billion yuan, 19 companies had non-net profits exceeding 1 billion yuan after deducting non-recurring gains and losses, and 12 companies achieved double-digit growth in operating income during the period.
Insiders said that it is not difficult to predict that 2023 should be another year with a large installed capacity of photovoltaics if there are no accidents. Faced with the high prosperity of the market and the booming start in the first quarter, almost all enterprises in the industrial chain have tried their best to state to investors in their annual reports that there are huge opportunities for the future development of the industry. A judgment of "time and tide wait for no man" runs through the upper and lower reaches of the industrial chain.
However, some insiders also remind that although the entire photovoltaic industry seems to have a promising future, there are some hidden worries. In the 2022 photovoltaic industry report card, polysilicon enterprises contributed the most. In their annual reports, most of these enterprises attributed their high performance growth to the continuous rise in the prices of raw materials such as polysilicon during the reporting period. Last year, China's polysilicon market was in short supply, which made the overall price of polysilicon rise and hit record highs repeatedly. However, the benefits brought by the structural shortage of production capacity cannot last long.
In fact, China's photovoltaic industry has always had structural problems. In 2008, affected by national support policies, China's photovoltaic industry entered a period of expansion. However, starting from 2011, the industry saw large-scale overcapacity. By 2016, the market was obviously oversupplied, with serious overcapacity, and many enterprises went bankrupt due to unbearable pressure. At present, there seems to be a sign of overcapacity. Among the "four giants" of polysilicon, Tongwei Co., Ltd. plans to achieve a high-purity polysilicon production capacity of 800,000 to 1 million tons from 2024 to 2026; Daquan Energy is currently expanding its production, and it is expected that by the end of this year, the company's production capacity will reach 300,000 tons; TBEA and GCL Technology also plan to achieve 200,000 to 300,000 tons of production capacity this year. Data from the Silicon Industry Branch of the China Nonferrous Metals Industry Association shows that in 2022, domestic polysilicon output was 811,000 tons. In the next few years, China's polysilicon output will surge several times.
Not only polysilicon, but all links of the entire photovoltaic industry chain are in a state of rapid capacity expansion. Some research institutions predict that by the end of 2023, the overall production capacity of China's photovoltaic industry will exceed 800GW, while the actual new installed capacity in the country is expected to be 95GW-120GW this year. Obviously, in the next few years, China's photovoltaic production capacity will be in a "surplus" state, and the photovoltaic manufacturing end has already overdrawn market demand for several years in advance.
The current overcapacity is essentially structural overcapacity, that is, overcapacity in low-end and medium-end products, while there is a shortage of advanced production capacity (such as N-type polysilicon, large-size silicon wafers, battery wafers, etc.). This situation will lead to some negative problems, such as periodic supply-demand mismatch in the industry, sharp price fluctuations in some supply chains, hoarding and profiteering in individual links, and market fragmentation and regional closure in some places.
These hidden worries will have an extremely adverse impact on the long-term health of China's photovoltaic industry, and we must find ways to solve them from the root. This requires various departments and localities to scientifically plan and manage the development of the photovoltaic industry, and actively, steadily and orderly promote the construction of the national photovoltaic market. It is necessary to balance development and security, strengthen the guidance of norms and standards, reasonably guide the pace of construction and expansion of upstream and downstream links according to the development characteristics of each link of the industrial chain, optimize the regional layout of the industry, and avoid industrial convergence, vicious competition and market monopoly. Optimize the business environment, standardize market order, support all types of market entities to participate in market competition on an equal footing, and guide all types of capital to participate in the photovoltaic industry in accordance with the dual-carbon goals.
Strengthening system connection and deepening full-chain cooperation is extremely important for the development of the entire photovoltaic industry. Various departments and localities should effectively utilize the domestic large photovoltaic market, guide enterprises in the upper and lower reaches of the industrial chain to conduct in-depth docking and exchanges, coordinate the construction of existing photovoltaic projects, strengthen the reserves of new projects such as polysilicon, and steadily accelerate capacity release and orderly expansion according to downstream demand. Encourage in-depth cooperation between upstream and downstream enterprises, establish long-term cooperation mechanisms through strategic alliances and signing long-term orders, carry out joint research based on capital, technology and brands, and promote industrial quality improvement, cost reduction and efficiency increase.
Overall, China's photovoltaic industry has huge potential and a bright future, but it also faces many challenges. The government and enterprises need to work together to solve hidden problems through policy adjustments and industry self-discipline, so as to ensure the healthy development of the industry.
Reprinted from: China Quality News
