China's PV market may break out in 2014

“Now China's PV industry is not clear, and many companies will have different plans next year. There are many versions, and everyone is changing, some are doing systems, some are power plants, and they have switched to other industries. , Need to look at the next year, 2013 may be another year of surprise.” – Li Xianshou, chief executive officer of Zhejiang Yanhui Sunshine Energy Co., Ltd. Li Xianshou, predicts that banks will liberalize photovoltaic loans next year.

China's PV industry, which already had excess capacity, has suffered bad news this year. The European and American markets, which account for 80% of the world's installed capacity, hold high sticks for China's “double reverse” countervailing and anti-dumping trade, adding to the over 80% of Chinese PV companies exporting products overseas. .

When will the Chinese PV industry in deep winter be able to feel the breath of spring? On November 26th, Zhejiang Yanhui Sunshine Energy Co., Ltd. SOL.Nasdaq, said that the founder of Yan Huiguang and Chief Executive Officer Li Xianshou were interviewed by the Morning Post reporter. Say, or in 2014.

Li Xianshou predicted that the full-scale outbreak of China's PV market will take place after 2014. For Europe and the United States, the "double reverse", Yan Huiguang the immediate countermeasure is to allow overseas photovoltaic companies, even let the European photovoltaic companies to Yan Huiguang OEM production, as a circumvention.

Yanhui Sunshine is currently the second largest wafer company in the world. The silicon wafer is the upper process of the photovoltaic cell, and the photovoltaic cell is the upper process of the photovoltaic module.

“We are currently a rare photovoltaic company with rising revenues,” said Li Xianshou.

For current photovoltaic loans that are basically frozen in China, Li Xianshou predicts that banks will liberalize next year.

"Or buy a component factory in Europe"

The European component factory is now very cheap, with a few hundred megawatts of component production capacity, which can be bought in millions of dollars, which is much simpler than building a factory. Now we are also looking at some European factories to assess the financial outlook. However, it will not be rushed. If the "double reverse" is not established or the tax rate is very low, then it is unnecessary.

Q: How do you plan to evade the negative effects of “double reverse”?

Li Xianshou: To internationalize. Unlike Japan, Taiwan, and other countries and regions, our talents and markets have become internationalized and rely on management and technology to participate in market competition. The mainland is mainly based on the advantages of government, labor, electricity, and low-cost resources.

At present, many large solar energy companies in China are going international fast. However, in the European, American and emerging markets, their internationalization stays at the stage of setting up localization offices, and the manufacturing industry has not yet achieved localization. Europe and the United States manufacturing industry believes that we are using unfavorable resources and subsidies to defeat our competitors. Therefore, to be internationalized in the manufacturing end, such as using European resources, manpower, and electricity to compete with each other. The more internationalized the PV companies in China, the wider the road will be.

Chinese companies originally used low-cost advantages to help others do OEM. Today, after the manufacturing industry has been upgraded, it has begun to have its own brand and can try to reverse it, allowing European companies to OEM Chinese companies and OEM companies for Chinese companies.

Many people think that the "double opposition" will definitely cause a blow to China's manufacturing industry. I think this may just be an opportunity to adjust its structure and truly transform itself into a global company. This is the best time for internationalization. point. The battery link we are no longer developed, now mainly by Chinese Taiwanese companies.

The European component factory is now very cheap, with a few hundred megawatts of component production capacity, which can be bought in millions of dollars, which is much simpler than building a factory. Now we are also looking at some European factories to assess the financial outlook. However, it will not be rushed. If the "double reverse" is not established or the tax rate is very low, then it is unnecessary. Therefore, we are still waiting to see, but we are already in contact with many factories.

"The next year may be a year of surprise."

The current problem is that there is a policy, but the matching did not keep up. For example, in 2009, Golden Sun, building integration and other projects were launched, but until now, many power plants cannot be connected to the grid. For example, now the National Development and Reform Commission has subsidized the 2010 PV project. You think that before the government owed the company money, it would not be natural to support the company.

Q: Talk about the views on production capacity and the views of corporate transformation?

Li Xianshou: In the early days of the industry, everyone thought that the bigger the production capacity was, who would make money, but now the situation is that the greater the production capacity, the higher the probability of problems.

It is not appropriate to simply talk about production capacity. We have to do additions and we must increase revenue and shipments. Now that the industry situation is uncertain, many companies will have different plans for the next year. There are many versions. Everyone is changing, some are doing systems, some are power plants, and others have switched to other industries. Whether this type of choice is correct requires a look at the next year and 2013 may be another year of surprise.

Domestic banks are also speculating on photovoltaic loans, and I believe they will be liberalized next year. If the loan comes to an abrupt end, the entire industry will regress.

Q: From an industry perspective, does the policy play a major role in supporting China's PV market?

Li Xianshou: Objectively speaking, China's policy of supporting solar energy has not really been implemented so far, and it has failed to stimulate the market. It is a semi-finished product policy.

The population of Germany is one-tenth of China, and the land area is one-thirtieth that of China. If calculated by population ratio, China should make 80 GW of 1 GW = 1000 MW a year, and 1 MW = 1000 kW. However, only 2-3 GW of photovoltaic installations were installed last year. China's PV application policy is not to say that Germany is much weaker than Spain, the United Kingdom, and France. Now it is only in its infancy. It is only a concept.

The current problem is that there is a policy, but the matching did not keep up. For example, in 2009, Golden Sun, building integration and other projects were launched, but until now, many power plants cannot be connected to the grid. For example, now the National Development and Reform Commission has subsidized the 2010 PV project. You think that before the government owed the company money, it would not be natural to support the company.

The support is not in place. I think it is because China is too big. It is estimated that it will take a few years to mature. The same is true in Japan. In March this year, subsidy policies for photovoltaic applications were introduced. However, there are few subsidies, and there are always lags in the policies.

We estimate that after 1-2 years, the current renewable energy surcharge will continue to increase from 8 cents/degree.

Q: Yanhui Sunshine plans to complete a 150 MW ground power station in China this year.

Li Xianshou: This year, the project will be able to complete about 70 megawatts. Our original target was set very high. We must now exercise appropriate control and conditions, and if we do not have the conditions, we would rather give up. You may do so much next year.

Without going to the power station, we do not know what the power station is like, so we will not give up. We strive for a market share of 10% in each market, and gradually. Actually doing a power plant is a very complicated matter. The capital turnover is very slow. From the approval, approval, construction, and power generation, there is no eight or nine months to do. It is so much time to put money there. It is very stressful. To adjust.

Q: What is the amount of R&D funding for Yan Huiguang's current year?

Li Xianshou: 20 million to 30 million US dollars in investment a year.

Formerly known as Yuhui is a silicon company, we have now come up with a new statement - the world's leading component companies. The reason why this year's revenue does not fall is due to its involvement in the component field. Next year will be further involved in system integration. This year has launched a micro-inverter, next year will launch a small energy storage system.

We are also preparing to develop large-scale energy storage systems, including off-grid access to large-scale power grid systems, etc. Integration of companies, components, inverters, and brackets for system integration can be installed by consumers themselves.

The integrated system does not do a lot of things, such as photovoltaic power generation, the system efficiency is only a little more than 85%, in fact, to achieve at least 90%. I estimate that 95% will be achieved in the future. This involves perfecting the matching of the entire system. For example, if the sun's angle changes during the day, it needs to track the technology. The temperature difference is very large throughout the year. Theoretically, for every one degree Celsius increase in the module temperature, the module's efficiency value will drop by 4%. How to ensure that the temperature does not rise is a problem. If it is resolved, it means that the cost of power generation will drop. The efficiency of power generation has gone up, and there will be about 30% reduction in power generation cost in the future. Now that the cost of electricity generation has reached 6-7 cents per kilowatt-hour, and another 30%, it will be possible to compete with traditional energy sources. In Europe and the United States, labor costs for assembling solar energy are very expensive. Therefore, the development of a plug-and-play system can save costs.

In addition, many remote regions in the world still use diesel and natural gas to generate electricity, and the overall scale is roughly 600 GW. The cost of electricity generated by these technologies is about RMB 2 per kilowatt-hour, which is mainly concentrated in South America. This is very unreasonable. If the future large-scale use of clean energy instead of diesel power generation, this market is very large, we are also developing new products, especially off-grid systems, large-scale integrated systems to occupy this market.

"The polysilicon market is expected to rebound in the second quarter of next year."

Polysilicon which is currently sold on the market at a lower cost than cash is definitely inventories. The impact of stopping production and maintenance will be lagging. After 3 months, the inventory will be less and less. After the inventory is digested, it is estimated that in the second quarter of next year, the overall market will be significantly improved at that time and prices will rebound.

Q: Why is grid grid not active?

Li Xianshou: In fact, China's power grid technology is very new, much better than those old grids in Europe and the United States. In the United States, if a power station is built, it will be difficult to connect to the network without two years of time. In China, it will be very fast. In such remote places as Qinghai and Tibet, it will be able to pick up in half a year.

The power grid is a monopoly industry. The adjustment of the entire interest structure and reforms can not be accomplished in one day or two. The key now is that our electricity prices do not reflect the costs that we should have. The true cost of electricity in China is certainly more than one yuan per degree, but because the country has subsidies for power groups, the current price remains low.

However, if there is no subsidy, the price of electricity is more than one yuan, so that the power grid to purchase electricity from photovoltaic power plants, the price will be high, the grid will not go to acquisitions, so that solar power plants will be difficult to survive, so now the state introduced a policy to support, we go again and When local grids talk about acquisitions, they will also accelerate their actions.

Q: The price of polysilicon products is very low. How do you view the price trend?

Li Xianshou: I said in 2006 that there are more than 40 polysilicon manufacturers in China and most of them will die in the future. Globally, the production capacity is very large now, but now it can achieve a cost of less than 20 US dollars per kilogram, and there are less than 10 in the world. At the moment, these core polysilicon plants are also cutting production. In the fourth quarter, including some major Chinese manufacturers, they stopped production and overhauled a lot. Polysilicon which is currently sold on the market at a lower cost than cash is definitely inventories. However, the impact of stopping production and maintenance will be lagging. After 3 months, the inventory will be less and less. After the inventory is digested, I estimate that in the second quarter of next year, the overall market will have a marked improvement at that time and prices will rebound.

Q: Your polysilicon expansion plan?

Li Xianshou: Our current polysilicon production capacity is 4,500 tons, and in January next year, 6,000 tons will be expanded and put into operation, and the total production capacity will reach more than 10,000 tons. Editor's note: Based on this calculation, it will account for more than 10% of China's total production capacity.

"China will still look at ground power stations for the next two years."

Now in China's investment power plants, Qinghai and Xinjiang, they will invest 10 yuan, and they will be able to recover 1.5 yuan a year. It can be seen that this is a very good industry. The loan will be 80%, the bank interest will be calculated at 7%, and the cost will be recovered in 3 years. . But why can't we get together? Many problems have not been solved, such as grid connection and loans.

Q: For overseas markets, what does Shin Hui think? In addition, does Shin Hui choose a distributed power station or a large ground power station as the main direction for future expansion?

Li Xianshou: Let us first talk about the market. From the perspective of the market, we regard Europe, the United States, Japan, and Australia as mature markets. The characteristics of a mature market are: Their PV application subsidies are guaranteed by legislation, and the risk is small, including financing is also simple, the entire industry has a very strong risk tolerance. Unlike China, we are still discussing what we can and cannot do. The mature market has evolved from the original subsidized FIT on-grid tariff to the PPA agreement on electricity sales. The original power station was subsidized by the government and is now sold directly to the power grid and even sold to companies that directly use electricity, such as Wal-Mart. This change is very evident in Europe.

Taking the example of Germany, many photovoltaic power plants sell electricity directly to power companies and sign an agreement. They sell electricity at a price higher than the government's subsidies. Many commercial systems typically have a price of 0.2 euros and a government subsidy of only 0.1 euros. Examples have also appeared in France and the United Kingdom. The overall view is to cancel the state subsidies, access the Internet at a low price, and sell electricity to users. Australia is now also issuing certificates, and some companies can sell electricity directly to users. In the past, only power companies were able to sell electricity, and PV power plants can now sell electricity directly.

Subsidies are gradually falling, even until cancelled, which is a mature market trend. Editor's note: The latest research commissioned by the European Union shows that as production costs decrease and optoelectronic efficiency increases, EU countries’ subsidies for the photovoltaic industry will gradually cease in the next 25 years.

Behind this trend is a centralized ground power station, which has just started and has a lot of land. It is easy to find. But slowly, Germany has installed 8 gigawatts a year. It is difficult to find large swaths of land. Germany is not much bigger than Zhejiang. As a result, Germany is now mainly distributed, encouraging small-scale commercial systems and residential systems with installed capacity ranging from 40 kW to 5 megawatts. It is hoped that the proportion will continue to increase, and the proportion of centralized ground stations will decrease. In the U.S., we have seen many small commercial systems, ranging from 0.5 megawatts to 5 megawatts, with a very large roof. Nowadays, the development of photovoltaic systems in schools and shops in the United States is very fast. This year, it has grown by 50%, and the growth rate has surpassed that of ground power stations. This is another feature of the developed countries. The process from large ground power stations to small business systems and residential development is in line with its actual conditions. These markets cannot be lost.

Another large market is China, India, Indonesia, Malaysia, South Africa, Latin America and other economically underdeveloped regions. The land in these areas is large, cheap, and the light is good. According to the business model, the return is very high. In some areas, it even reaches 20% to 30%, and it is recovered in more than three years. However, the level of education in these areas is poor, the market is immature, and China is in good condition. There is great hope for companies in these emerging markets, but the risks are not small. These countries either have incomplete policies or are short of money or have other problems. Development is slow. I estimate that it will take 2-3 years to really form a market.

As far as China is concerned, there is a real explosion in the photovoltaic application market. It should be until 2014, when it is easy to install 10 GW. It is generally expected by the market that there will be a situation where supply falls short of demand. Now in China's investment power plants, Qinghai and Xinjiang, they will invest 10 yuan, and they will be able to recover 1.5 yuan a year. It can be seen that this is a very good industry. The loan will be 80%, the bank interest will be calculated at 7%, and the cost will be recovered in 3 years. . But why can't we get together? Many problems have not been solved, such as grid connection and loans.

I personally expect that China will still look at the ground power station for the next two years. After a period of time, it will be more mature. Two years after the outbreak of the ground power station, look at the distribution again. This stage of development cannot be crossed and cannot be achieved in one step.