Time has passed! China's photovoltaic industry has smashed the world's wool

In the past, all industries in China were mowed by the world because of the low price and good quality, because there was no core technology, and because they wanted to seize the global market, photovoltaics were no exception. Whether it’s the three-headed-out-of-home era or China’s number one new photovoltaic installed capacity for eight consecutive years, China’s photovoltaic industry has always been responsible for global manufacturing, but because of its low price, it has always been the piece of land that has been mowed by the world. The woolly sheep.

Time has changed, and in 2021, China's photovoltaic industry will smash the world's wool.

1. 2021, the world's best new PV installations

2021 is probably the year with the largest number of new PV installations in the world.

As of the third quarter of 2021, the world's major photovoltaic markets China, the United States, India, Australia, Germany... have all received the best news of "historical records". It is expected that China, the United States, and India will become the world's top three new photovoltaic installations in 2021.

China: The world's total photovoltaic installed capacity and new installed capacity doubled, with 25.56GW of new photovoltaics in the first three quarters, an increase of 44.3% year-on-year. Among them, residential and industrial and commercial rooftop photovoltaics have reached new highs.

The United States: The global PV installed capacity and newly installed capacity are the second most expensive, with an increase of 15.7GW in the first three quarters, a year-on-year increase of 44.04%, and a record high.

India: The future of global photovoltaic installations, 8.811 GW of photovoltaics were added in the first three quarters, an increase of 280% over the same period last year, and also a record high of newly installed capacity in the first three quarters.

Other major markets, such as Germany and Australia, also saw significantly higher capacity additions this year than in previous years.

2. The volume rises rapidly, and the LCOE returns to three years ago

The global installed PV capacity is expected to reach around 160GW in 2021, an increase of around 20% over last year. Contrary to the trend of photovoltaic cost reduction and efficiency improvement, the price of photovoltaic modules this year has also increased by 20% compared with last year.

According to the third-quarter photovoltaic market report released by the US solar energy industry association SEIA, the price of photovoltaic modules in the United States has been in a downward channel for the past decade, but the price of photovoltaic modules in 2021 has risen back to the price of two years ago. Since the beginning of this year, the cost of fixed support systems has increased by 11.7%, and the price of single-axis tracking projects has increased by 8.5%. In all market segments except household photovoltaics, the year-on-year price increase is the highest since 2014. Equipment procurement and pricing for the project under development was the most challenging project they had ever worked on.

The latest report released by India's Mercom pointed out that India has faced six consecutive months of module price increases, and the quarterly increase of PV project costs is more than 10%, the largest increase so far.

Not only in overseas markets, but also in China's domestic PV prices are rising out of control. The price of modules rose to 2.2 yuan per watt a month ago, more than 35% higher than a year ago; due to the shortage of chips and bulk materials, the prices of inverters, brackets and trackers in the photovoltaic balance system are also increasing.

It was originally thought that this year will be able to access the Internet at a par, but the subsidies have been cancelled, and the pace of parity has been disturbed by the price increase.

But even so, the price increase has not stopped the pace of global PV installations growth, and major markets such as China, the United States, India, Australia, Germany, Japan, etc. are surprisingly consistent: utility PV has slowed down, residential and industrial and commercial installations soared.

The price increase has made global PV investors, including China, face an embarrassing dilemma.

3. Shocked, China's photovoltaics smash the world's wool

Different from the dilemma of investors, photovoltaic material manufacturers have enjoyed this year's price increase dividend.

According to the previous report of Global Photovoltaic: the upstream polysilicon enterprises of photovoltaics are enjoying a good time of not opening for one year, and opening for 30 years.

Relevant information shows that the cash cost of polysilicon first-line production capacity is about 45 yuan/kg, while the price of polysilicon has exceeded 100 yuan at the beginning of this year, and exceeded 200 yuan in the middle of the year. to 500%.

Since China's photovoltaic industry is responsible for about 80% of the world's polysilicon raw materials, 90% of silicon wafers and cells, and 75% of module manufacturing, China's product price is the global product price. Even if the price soars, global users must accept it. .

Therefore, fifteen years ago, the Chinese photovoltaic industry, which had to import 20 US dollars of silicon material at a cost of 500 US dollars from overseas, is selling 45 yuan of silicon material to the world at a price of 270 yuan in 2021.

Among them, Chinese end-users also bear 30% of the high-priced raw materials, but the remaining 70% are paid by overseas users, even if there is another hand that smashes wool - soaring shipping costs, from silicon materials to silicon wafers From batteries to components, they are being chased by the end market.

Even upstream of polysilicon, industrial silicon suppliers can't help but stab in the side, pulling a few hairs from polysilicon manufacturers to share a little dividend from price increases. China's industrial silicon supply accounts for 70% of the global market, and China's industrial silicon for photovoltaics accounts for more than 80% of the market. The increase in the price of polysilicon material contributed to 80% of the increase in the price of photovoltaic modules, and the dividends of the increase in the price of global polysilicon material were eaten by Chinese manufacturers by 80%.

In addition to the price increase of silicon materials, aluminum frames, brackets, trackers, silver paste, even EVA, POE, fluorine-containing backplanes, and chips are mostly controlled by overseas manufacturers. Make a fortune with the parts factory. The final cost will be paid by the global photovoltaic power station investors.

Wool is so good, even Hopson Silicon has announced its entry into photovoltaic silicon materials, silicon wafers, cells and modules.

4. Accidental, not intentional

However, Chinese photovoltaic manufacturers scooped up the world's wool this time, not intentionally, but purely accidental.

From the perspective of the supply chain, the global polysilicon production in 2021 can exceed 600,000 tons, corresponding to a photovoltaic installed capacity of more than 200GW, and the actual demand is only about 160GW. Whether it is silicon material or the intermediate link of the industrial chain, it is actually a surplus. of.

From a supply glut perspective, it is only logical that prices should fall when competition is fierce. But this year, it was an accident.

The analysis believes that due to the high expectations of the market in the intermediate links of the photovoltaic industry chain and the rapid expansion of production capacity, for example, the production capacity of cells and modules has approached 400GW, resulting in obvious asymmetry between the production capacity of polysilicon and the midstream production capacity. Prepare 10% safe and reasonable inventory in any link, and polysilicon will face a serious supply shortage.

This shortage has been amplified by many midstream manufacturers, coupled with the United States' return to the climate agreement, the conclusion of the global carbon emissions agreement, optimistic expectations for global PV installed capacity, and the amplification of analysts and media. Since the beginning of the year, polysilicon materials have formed hard to find.

When all polysilicon manufacturers show their empty warehouses to buyers who come to rush for goods, they spread their hands and express their helplessness. The only option left to buyers is to increase prices and continue to rush to buy.

Polysilicon is a hurdle at 220 yuan, because each link must have a certain profit; at 270 yuan, it is a hurdle, because the cost of parity Internet access is blocked. But even such price hikes cannot stop the enthusiasm for global PV installations.

As described in the Solar Energy Industry Association's Q4 Solar Insights Report: Installers admit that expectations would have been higher if there were no supply chain constraints. U.S. PV developers grappled with delayed deliveries, rising product costs and contract negotiations, with multiple gigawatt projects being pushed back online from 2022 to 2023 or later.

It can be seen that, even if there is no 10% safety stock of each company in the midstream link to occupy raw materials, the market demand will make silicon materials in short supply and push up the price of silicon materials.

Picking wool, cutting straw, China's photovoltaics are not intentional, the global dual-carbon goal has achieved huge profits in China's photovoltaic silicon materials, it is really an accident, very good!

In your opinion, how long will this be good?