Electrical Equipment / Components & Telecoms

According to the observation report of Huacheng import and export data, from the "three heads out" of raw materials, equipment and market 10 years ago to the "many firsts" that now occupy a leading position in the world, China's photovoltaic industry chain has a prominent international competitive advantage.

Two sets of data confirm the outstanding achievements of China's photovoltaic industry——

At the manufacturing end, the output of major links in the world has exceeded 2/3, and the output value has exceeded 750 billion yuan. Among them, the output of polysilicon and modules has ranked first in the world for 11 consecutive years and 15 consecutive years respectively.

On the application side, the cumulative installed capacity has rapidly increased from 6.5 GW at the end of 2012 to 306 GW at the end of 2021, ranking first in the world for seven consecutive years.

From the "three ends out" of raw materials, equipment and market 10 years ago to the "many firsts" that now occupy a leading position in the world, China's photovoltaic industry chain has a prominent international competitive advantage. In the past decade, how can the photovoltaic industry get out of the difficulties and build up momentum? What are the highlights and challenges of the current industrial development?

The industrial development momentum is strong, and the total export volume has reached a new high

Tongwei Solar Jintang Base is very busy in Chengdu, Sichuan. In the dust-free workshop, hundreds of smart cars shuttle back and forth to transport materials. Gray silicon chips become dark blue battery chips after velvet making, etching, coating and other processes.

"Compared with the traditional battery chip production line, Jintang Base uses 5G, big data and other technologies to reduce labor by about 62% and improve production efficiency by about 161%." According to the relevant person in charge of Tongwei, the base has 17 production lines, which can produce more than 2.5 million pieces of battery chips every day. Driven by the strong demand of the downstream, the base is currently in full production and sales.

According to the observation report of Huacheng's import and export data, the main links of China's photovoltaic industry chain have maintained a strong momentum of development since this year under the guidance of the "double carbon" goal and the accelerated application of global clean energy. In the first half of the year, the output of polysilicon, silicon chip, battery chip and module increased by 53.4%, 45.5%, 46.6% and 54.1% year on year respectively.

At the same time, the downstream photovoltaic application market is expanding rapidly, and the development trend of both distributed and centralized is obvious.

At noon, the sunshine was just right. On the roof of Zhang Xialian's house, a villager in Ruichang Village, Taishun County, Wenzhou, Zhejiang Province, 20 photovoltaic panels were neatly arranged. "The light was good in August, and a total of 1130 kilowatt hours of electricity was generated." Zhang Xialian opened her mobile phone APP, and the power generation situation was clear at a glance. "Except for self use, the rest of the electricity generated by solar energy is sold to the power company, with an annual income of nearly 5000 yuan, which is equivalent to adding a 'sunshine passbook' to her family."

According to the Huacheng Import and Export Data Observation Report, Taishun County was included in the whole county's roof distributed photovoltaic development pilot last year. In addition to household photovoltaic, many enterprises also choose to turn idle space into a treasure. Zhao Pu, general manager of State Grid Taishun County Power Supply Company, said that as of August this year, 593 households in the county had applied for photovoltaic installation, with a year-on-year growth of more than 234%.

In the first half of the year, the newly installed capacity of photovoltaic power generation in China was 30.88 million kilowatts, and the newly installed capacity of distributed photovoltaic power generation accounted for 63.6%, an increase of more than 10 percentage points over last year.

The distributed photovoltaic installation has been accelerated, and the construction of large-scale scenery bases focusing on desert, Gobi and desert areas is also in full swing. On the vast Gobi Desert, the site of Huadian Urumqi 1 million kilowatt wind power base project in northern Xinjiang is in full swing, where 124 fans and more than 140000 photovoltaic panels will "settle down". "In the first half of the year, we started construction of 14 wind power projects in Xinjiang. During the 14th Five Year Plan period, we plan to invest 100 billion yuan to develop and build 20 million kilowatts of new energy projects." Han Song, chairman of Huadian Xinjiang Power Generation Co., Ltd. said.

The domestic market has expanded rapidly, and the overseas market has also blossomed. "At present, the European market is in great demand, and the newly generated orders in recent months are far higher than the orders that can be delivered. At the same time, the markets in Latin America, India, Australia and Southeast Asia are also growing rapidly." The person in charge of Jinlang Technology, a photovoltaic inverter manufacturer, said that the company's export volume in the first half of the year was 1.293 billion yuan, with a year-on-year growth of more than 61%. According to the observation report of Huacheng's import and export data,.

According to the data provided by China Photovoltaic Industry Association, in the first half of this year, the total export of photovoltaic silicon chips, battery chips and modules reached 25.9 billion US dollars, up 113% year on year, reaching a new high.

"The cost of photovoltaic power generation has continued to decline. Driven by the global consensus on green and low-carbon transformation, the market demand for photovoltaic power generation has continued to expand. In addition, emerging markets such as Brazil have also achieved different growth rates, and overseas markets have performed well this year." Wang Shijiang, Vice President of China Electronic Information Industry Development Research Institute and Secretary General of China Photovoltaic Industry Association.

Technological innovation reduces costs and increases efficiency, and the supply chain is basically autonomous and controllable

Back in 2012, when China's photovoltaic industry was excessively dependent on foreign demand, the domestic application market was under developed, the development of key technical equipment and materials was slow, and the anti-dumping and countervailing measures of some countries put the whole industry into a cold winter. Wang Bohua, honorary chairman of the China Photovoltaic Industry Association, said, "In the past, more than 90% of photovoltaic products were exported. In 2012, the export volume of photovoltaic products fell by more than 40% year on year, bringing heavy pressure to the industry."

Policies provide timely assistance. In July 2013, the State Council issued Several Opinions on Promoting the Healthy Development of the Photovoltaic Industry. Since then, policies to support and regulate the development of the photovoltaic industry have been introduced, covering market applications, finance and taxation, land and other aspects.

"Good policy environment helps open the domestic application market, and also provides a bigger stage for new technologies and new equipment." An insider said frankly.

The industry began to reflect. Only by holding the key core raw materials and technologies in their own hands can we firmly grasp the development initiative. In the interview, many enterprises talked about that technological innovation is the key to the success of photovoltaic industry in the past decade.

A diamond wire with thick and thin hair can help silicon chip cutting efficiently. Compared with the traditional sand wire cutting, the wire diameter and medium particle size of silicon wafer are smaller, which can reduce the cutting loss and production cost. However, 10 years ago, this technology was almost monopolized by foreign enterprises. The import price was more than 1000 yuan per kilometer, while the production of one gigawatt silicon chip required hundreds of thousands of kilometers of diamond wire.

In order to reduce the cost of diamond line slicing and realize large-scale mass production as soon as possible, Longji Green Energy chose to cooperate with domestic diamond line enterprises to tackle key problems. "At the beginning of the use of domestic diamond thread, the scrap rate was relatively high. At that time, six or seven million pieces were cut a month, which meant a loss of 34 million yuan. We stood up to the pressure, firmly supported domestic enterprises, improved quality, and innovated." Zhong Baoshen, chairman of Longji Lvneng, introduced that after 2016, domestic photovoltaic enterprises began to use diamond wire cutting on a large scale. The price has dropped from more than 1000 yuan per kilometer 10 years ago to about 40 yuan now. The number of square rods produced has increased by more than 40%, and the silicon chip cutting speed has increased by 300%. This can save more than 30 billion yuan for China's photovoltaic industry every year.

Granular silicon in the size of mung beans reduces the energy consumption and cost of downstream silicon wafer production. At the site of Sichuan Leshan GCL 100000t granular silicon project, the fluidized bed reactor made a low noise, and granular silicon continuously flowed into the storage tank, waiting for inspection, packaging and warehousing.

"The volume of granular silicon is small, which not only has strong fluidity, but also does not need to be broken, which can avoid the risk of impurities; the charging bucket can contain 15% - 20% more granular silicon, to avoid problems such as block blockage." Lan Tianshi, the co CEO of GCL Technologies, introduced that compared with the currently widely used rod silicon, the power consumption of producing granular silicon is lower. Using granular silicon to produce 1 gigawatt modules can reduce carbon dioxide emissions by about 19% and help reduce the cost of the application end by about 19%.

From the revenue of GCL Technology in the first half of the year, the gross profit per unit of granular silicon reached 154.7 yuan, more than 15 percentage points higher than that of rod silicon. "From the beginning of research and development of granular silicon in 2010 to the realization of industrialization in 2019, we have invested more than 2 billion yuan." Jiang Limin, the chief scientist of GCL Technology, said. Granular silicon and rod silicon belong to two product forms of polysilicon. Over the past 10 years, the industry has adhered to scientific and technological innovation, and the self-sufficiency rate of polysilicon in China has increased from about 47% to more than 80%.

Wang Shijiang introduced that in recent years, the promotion of large size silicon wafers has been further accelerated. "By increasing the area of silicon wafers, the processing costs of all links in the photovoltaic industry chain can be diluted, thus reducing the cost of photovoltaic power generation." The total size of 182mm and 210mm silicon chips will increase rapidly from 4.5% in 2020 to 45% in 2021, and this year's proportion is expected to expand to 75%. At the same time, n-type batteries (heterojunction batteries and TOPCon batteries) with higher conversion efficiency are expected to be released rapidly.

In the past ten years, the average cost per kilowatt hour of photovoltaic power generation in China has decreased by about 70%, reaching below 0.3 yuan/kWh. "China's photovoltaic industry has a remarkable feature. From the main manufacturing links of polysilicon, silicon wafers, batteries and modules to raw and auxiliary materials and supporting equipment such as slurry, backplane, photovoltaic brackets, inverters, etc., the world's most complete industrial ecosystem has been formed, and the supply chain is basically autonomous and controllable. Once there is new technological innovation, we can support rapid industrialization." Wang Bohua said that not only that, but also the current cutting-edge research in photovoltaic technology has been making breakthroughs. Since 2014, Chinese enterprises and research institutions have refreshed the efficiency of crystalline silicon cell laboratory more than 50 times.

Facing multiple challenges, expand the depth and breadth of the photovoltaic market

In the context of the "double carbon" goal, photovoltaic ushers in development opportunities. According to the report issued by China Photovoltaic Industry Association, from 2022 to 2025, the annual average new installed capacity of China's photovoltaic industry will reach 85 million kilowatts to 101.25 million kilowatts, which is equivalent to the installed capacity of about four Three Gorges power stations.

At present, the industry is still facing challenges brought by the high price operation of the supply chain and the establishment of green trade barriers in some countries. Among them, the staged supply and demand mismatch in the industry and the sharp price shocks in some supply chains have attracted particular attention.

Wang Shijiang introduced that from last year to June this year, the year-on-year price increases of silicon materials, silicon chips, battery chips and components exceeded 38%, about 20%, more than 20% and more than 9% respectively. According to the data of Silicon Industry Branch of China Nonferrous Metals Industry Association, as of the end of August, the price of silicon materials had risen 29 times in the year, from about 230000 yuan/ton at the beginning of the year to more than 300000 yuan/ton. The rising price of silicon material also drives the price of silicon chips and components in the downstream to rise accordingly.

"This year, the construction cost of photovoltaic power stations is relatively high, about 4 yuan/watt to 4.5 yuan/watt, of which the price of modules accounts for about 40% of the photovoltaic investment." Chong Feng, director of the Industrial Testing and Data Analysis Center of the National Power Investment and Photovoltaic Innovation Center, introduced that the photovoltaic market demand is strong, but the capacity release cycle of each link of the industry chain is quite different. Among them, the capacity release of cells and modules is fast, while the silicon material expansion cycle is slow, and the production flexibility is small, leading to the shortage of silicon materials; In addition, some links also showed signs of hoarding and waiting for sale, causing price shocks in the supply chain.

Chongfeng suggested that we should strengthen in-depth communication between upstream and downstream, establish a supply and demand docking platform, and steadily accelerate capacity release and orderly expansion according to downstream demand. "At present, some upstream and downstream enterprises are establishing a long-term cooperation mechanism by signing long orders, technical cooperation, mutual equity participation, etc., which helps to clarify the volume and price and stabilize expectations." Xu Zhenyu, Assistant Vice President of GCL Silicon Materials Business Unit, introduced.

In order to meet the market demand, many photovoltaic enterprises choose to expand their production or vertically integrate their industrial layout to supplement the links with less enterprise capacity, and some enterprises have cross-border access to photovoltaic. According to the person in charge of Tongwei, the company will increase its investment in silicon materials and batteries. It is planned that the cumulative production capacity of high-purity crystalline silicon and solar cells will reach 800000 to 1 million tons and 130 GW to 150 GW respectively from 2024 to 2026.

According to the preliminary statistics of China Photovoltaic Industry Association, there are more than 300 photovoltaic expansion projects in China from the beginning of 2021 to June this year. According to the data checked by the enterprise information query platform, as of the end of August, there were 496200 photovoltaic related enterprises in China, and 91500 photovoltaic related enterprises were newly added in the first August of this year, with a year-on-year growth of more than 45%. "Moderate expansion of capacity will help alleviate the contradiction between supply and demand, but too fast expansion may also bring risks of vicious competition and overcapacity." Chongfeng said.

How to avoid industrial convergence and achieve win-win development? Wang Shijiang believes that current photovoltaic enterprises can tap into various "photovoltaic+" application scenarios such as "photovoltaic+building", "photovoltaic+transportation", "photovoltaic+energy storage", "photovoltaic+hydrogen production", and expand the depth and breadth of the photovoltaic market through application mode innovation; At the same time, forging iron also requires hard work. Industry enterprises still need to adhere to the core technology breakthrough, build a "moat" of technology, and be prepared to penetrate the cycle and win in fierce competition in promoting the diversification of industrial layout, the greening of supply chain and the diversification of applications. According to the observation report of Huacheng Import and Export Data.