Abstract Recently, Morgan Stanley released the 2017 Solar Energy Industry Report and Corporate Investment Proposal (referred to as the “Reportâ€) to global investors. Incremental decline, oversupply, and brutal competition have become the focus of attention in the report...
Recently, Morgan Stanley released the 2017 Solar Energy Industry Report and Corporate Investment Proposal (referred to as the “Reportâ€) to global investors. Incremental declines, oversupply, and brutal competition have become the key concerns in the report. With the global mainstream market shifting and the policy environment tightening, the global PV market is about to enter the industry trough. Affected by this, China's PV companies will be in a more severe living environment this year and next, and the state of development through industrial integration will continue to exist. Trend 1: The market is expected to increase in the second half of the year
The slow-growing market size combined with the tightened policy environment, this year's global PV market will compete at a lower price and more efficient products under the dual factors.
According to the "Report", the global PV market's new installed capacity in this year and 2018 is about 67 GW, which is about 6% lower than the 72 GW in 2016.
The decline in demand in China, Japan, and Europe has directly led to a reduction in new installed capacity worldwide.
According to the "Report", China is expected to install 27 GW of new aircraft this year, including 17 GW and 10 GW in the first half and the second half respectively.
Compared with the 2016 new installed capacity of 34 GW, the forecast is reduced by 20%. The new installations in the first half of this year are exciting. Wang Yingge, assistant to the chairman of Longji Leye Photovoltaic, said: "At present, except for the 'leaders' and distributed projects (mainly for self-use), most of the photovoltaic power plant projects are robbing 630. This situation is similar to last year, so the first In the second quarter, the installation climax will be ushered in. The newly installed capacity in the first half of the year is expected to be 18~20 GW." According to the introduction of the first quarter of 2017, the first quarter of this year, the national photovoltaic power generation is maintained. Faster growth, new installed capacity reached 7.21 million kilowatts, basically the same as in the same period of 2016.
In connection with the actual shipments of the first half of the year, the goal of adding 20 GW in the first half of the year is still convincing. It is understood that Shangneng Electric Co., Ltd. has exceeded 4 GW in the first half of the year, a significant increase over the same period last year. Li Jianfei, vice president of Shangneng Electric Co., Ltd., said: "The industry is still in a period of rapid development. Recently, there have been reports released by the forum. According to 630, the newly added ordinary photovoltaic project in the first half of the year was 8 GW, and the photovoltaic poverty alleviation was 5.16 GW. Formula 4 GW, the supplementary indicator of 3.7 GW, the total amount of more than 20 GW, the upper can be considered more credible." Morgan Stanley's forecast for the Chinese market's incremental decline is not groundless. Wang Yingge said: "The total amount of new installed capacity in China this year is difficult to predict. It is not unrelated to many uncertain factors. The progress of the second-phase project and the development speed of the distributed market are uncertain. Experience, there will be a new year's PV price policy introduced at the end of the year, the new price will make the new quarter become uncertain."
Trend 2: Product competitiveness is high
In the case of a lower incremental rate, the production capacity of all links in the industrial chain is still expanding at a growth rate of about 10%. The "Report" predicts that the component link will face a price decline of around 20%, and the corresponding corporate gross margin will also decline.
Capacity growth in all segments of the component is worth considering in the context of the lack of growth in the global PV market. Whether the newly added capacity of manufacturing enterprises is competitive in the market, and whether there are innovative technologies to support them... A series of judgments on new capacity is about success or failure.
Wang Yingge said: "Capacity construction has a cyclical nature. The new capacity added this year comes from the release of the expansion part since 2016. The rational new capacity planning will also be arranged according to market demand. In general, polysilicon, silicon wafer, The batteries and components are surplus. In terms of structure, the high-efficiency production capacity is in a phased shortage. For example, monocrystalline silicon wafers, PERC production capacity, etc., the staged shortage of high-efficiency production capacity will gradually achieve a balance between supply and demand in the second half of this year. Enterprises with excellent performance in assets and liabilities at the stage benefited from the early deployment of high-efficiency production capacity. According to the report, Longji, Daquan and Jingke became the preferred three Chinese companies to increase their holdings. It is understood that Longji’s first-quarter results announcement shows that the company’s net profit in the first quarter was 400 million yuan to 450 million yuan, a year-on-year increase of 50% to 70%.
Apart from the technical factors, the power of rapid integration of the industrial chain makes the imagination of the company to increase the profit level. Wang Yingge said: "Industry integration is far from over. Relatively speaking, polysilicon and silicon wafers are better integrated, industry concentration is high, and there is still a large integration space for batteries and components. For photovoltaic manufacturers, the future The way out lies in technological innovation, who is technologically fast, and who has a healthier and more sustainable financial ability, who can continue to lead."
Trend 3: The proportion of single crystals continues to rise
The demand for efficient production in the global market in the future provides an answer to the long-standing component route dispute. The Report shows that high-efficiency monocrystalline modules will gain a larger market share in the next 3 to 5 years. The market share of single crystals is expected to grow to 35% globally and is expected to grow to 50% by 2020.
The growing share of single crystals is mainly due to the rapid decline in costs and better adaptability to future technologies. It is understood that the total component shipments in the first quarter of this year are 8 GW, of which 2.8 GW is single crystal, involving 50 MW of the “Leader†project, accounting for only 1.7%.
With the gradual return of single crystals in China and the global market, single crystals account for more than 50% of the purchases of major PV power plant investors in China, and even more than 70%. The power of the 60-type module is about to enter the 300-watt era from 255 watts two years ago, and single crystal technology has accelerated the early arrival of this situation.
Wang Yingge said: "The single crystal products still have huge cost reduction space. The single crystal silicon rods will have more than 30% of the cost reduction space in the next three years. The thinning of the diamond wire will make the cost of monocrystalline silicon wafers more competitive. The popularity of PERC technology will further reduce the cost per unit of watt-hour battery and module. In the next three years, the global market share of monocrystalline is a recognized trend, and the specific share is increased. I think it depends on competitiveness. Monocrystalline silicon wafers, PERC capacity expansion speed." "Report" also reflects the great confidence in the future trend of single crystal, the controversy about the new standard of "leaders" base, "Report" believes that as long as the single polycrystalline conversion efficiency standard deviation Keeping it within 1.5 points will not affect the competitive advantage of single crystal and single crystal PERC.
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