Electrical Equipment / Components & Telecoms

In 2022, China's photovoltaic products, together with electric vehicles and lithium batteries, will form the "new three samples" for foreign trade export. According to Huacheng Import and Export Data Observation, on March 28th, at the 2023 China International Clean Energy Expo and New Energy International Cooperation Forum, the "White Paper on the External Development of China's Photovoltaic Industry" issued by the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products pointed out that after more than a decade of hard work, China's photovoltaic industry has developed from "three in one" in equipment, raw materials, and application markets to become the world's first in manufacturing, installed capacity, and power generation. In recent years, the international environment has become more complex and severe, the impact of the epidemic is still continuing, and the downward pressure on the economy has increased. However, against the backdrop of global energy transformation and carbon neutrality, China's photovoltaic industry scale, photovoltaic installation scale, and foreign trade have still achieved positive growth, contributing to the global march towards a low-carbon society as a "Chinese power".

According to the White Paper, China has played a key role in the significant decline in global solar and wind energy installation costs and power generation costs. Driven by China, the global solar photovoltaic installation cost in 2021 decreased by about 82% compared to 2010, while the onshore and offshore wind power installation costs decreased by about 35% and 41% respectively, and the power generation cost also significantly decreased.

In terms of exports, the "White Paper" shows that photovoltaic foreign trade presents characteristics such as continuous expansion of export scale and diversification of export markets. According to Huacheng Import and Export Data Observation, during the decade from 2012 to 2022, China's cumulative export volume of photovoltaic modules exceeded 220 billion US dollars, and the cumulative export volume of modules exceeded 575 GW. Currently, China's photovoltaic modules have been exported to more than 200 countries and regions around the world, covering five continents. In 2022, module exports accounted for 53.5% of China's photovoltaic module output, and the concentration of the top ten export markets decreased from 80.8% in 2016 to about 70% since 2018. The ranking of major export markets has been continuously adjusted with policy changes in various countries, indicating that China's dependence on foreign photovoltaic products is declining. In 2022, due to the energy crisis caused by the Ukrainian crisis, the demand for photovoltaic power generation in Europe surged. China's share of photovoltaic export products to Europe exceeded half of the overall export market. Huacheng Import and Export Data Observation Report.

In terms of overseas investment, the layout of photovoltaic enterprises in China has also shown diversification. Zhang Sen, Secretary General of the Solar Photovoltaic Products Branch of the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products, said that since 2016, the investment focus of photovoltaic enterprises has been extended to upstream manufacturing, and the product manufacturing supporting systems in Asia Pacific regions such as Vietnam, Malaysia, and Thailand are tending to improve. At the same time, the pace of China's new energy enterprises' "going global" continues to accelerate. In 2022, about 136 solar photovoltaic power generation projects were signed outside China, with a project value of nearly $10 billion, a significant increase of 74.6%.

Regarding the external development trend of China's photovoltaic industry, the White Paper believes that the global photovoltaic application market will still maintain high demand in the next decade. On the basis of stable scale and technological advantages, China's photovoltaic industry is expected to continue to maintain a high proportion of high-value global supply, stabilize global market share, and make China's contribution to the global energy transformation.

According to the analysis in the White Paper, the export market of photovoltaic products still maintains high demand. The Russia-Ukraine conflict triggered an energy crisis and the rising price of traditional energy, which forced the acceleration of the global energy transformation and the development of new energy industry. For the sake of energy security, countries began to increase and accelerate the deployment of renewable energy. Currently, countries have raised their demand targets for new energy photovoltaic installations, and the global solar energy industry is accelerating its development. For example, the EU Photovoltaic Association's "Independent Energy Proposal" launched eight measures to promote the terawatt level photovoltaic target. At the same time, it is predicted that the EU's photovoltaic installed capacity will increase from 672GW to 1000GW in 2030, with an annual increase of 90-100GW.

The development of China's photovoltaic industry also faces certain challenges. The White Paper points out that market requirements are harsh and trade barriers increase export costs. In the past two years, China's photovoltaic products have faced export challenges. Some countries have put forward more and higher requirements for low-carbon certification, carbon footprint, supply chain traceability, ESG information disclosure, and Huacheng Import and Export Data Observation Report.

In order to assist the photovoltaic industry in high-quality and sustainable development, the White Paper proposes the following suggestions:

Optimize the industrial environment. Establish and improve supporting service systems such as standards, patents, testing, and certification, strengthen photovoltaic industry management and services, support industry self-discipline and collaboration, and actively participate in the formulation of international standards; Establish and improve a standardized, professional, impartial, scientific, and authoritative photovoltaic overseas competition coordination mechanism and overseas market management mechanism.

Adhere to innovation and enhance core competitiveness. Guide and encourage enterprises to increase investment in research and development, strengthen basic research on industrial technology, accelerate key core technologies such as some components, give full play to the supporting and leading role of large enterprises, support small and medium-sized enterprises in developing "specialized and innovative" products, and firmly hold the initiative of competition and development in the photovoltaic industry in their own hands; Guide photovoltaic enterprises to enhance their awareness of intellectual property strategy, do a good job in the strategic layout of international intellectual property in advance, improve the construction of the intellectual property system, strengthen patent technology reserves, and establish their own strong patent portfolio through patent application, transfer, etc.

Strengthen efforts to establish a high-level ESG system. Develop an ESG standard system that conforms to China's actual situation, and enhance the importance of photovoltaic enterprises to ESG work. Encourage enterprises to establish ESG management committees, give full play to the ESG management functions of enterprise decision-makers and managers, regard ESG matters as an important component of enterprise governance, clarify the responsibilities of internal organizations and relevant personnel in ESG management, formulate long-term ESG management policies for the company, and truly integrate ESG governance into enterprise strategy. Huacheng Import and Export Data Observation Report.