After investing 8 billion yuan to expand the base at the end of last year, the photovoltaic company Dongfang Risheng recently invested 2 billion yuan to build a new base. In recent years, various PV companies are conducting capacity competitions, but in recent years, early warning of overcapacity in photovoltaics has emerged one after another. However, in the context of overcapacity, PV companies are still accelerating capacity expansion. In this context, the future development opportunities and challenges of the photovoltaic industry coexist.
Frequency expansion capacity
The photovoltaic market continued to prosper, and the Oriental Sunrise began to expand aggressively. Following the announcement of a $8 billion expansion plan at the end of last year, a new round of 2 billion yuan agreement has been signed. Dongfang Risheng recently announced that the company, as Party B and Yiwu Information Optoelectronics High-tech Industrial Park Management Committee signed the "5GW Solar Cell Module Production Base Project Investment Framework Agreement" on February 21, with a total planned investment of 2 billion yuan. About 350 mu, the project is divided into two phases, and the construction period is expected to be two years. This is the second large-scale expansion project of Dongfang Risheng in 3 months, after Jiangsu Jintan invested 8 billion yuan to build 5GW photovoltaic cells and 5GW photovoltaic module base.
In December 2017, the company announced an agreement with the People's Government of Jintan District, Changzhou City, Jiangsu Province, to invest 8 billion yuan to build a photovoltaic manufacturing base of 5GW photovoltaic cells and 5GW photovoltaic modules in Jintan, Jiangsu. Dongfang Risheng said that the base has been quickly put on the construction schedule. The 5GW double-sided high-efficiency PERC single polycrystalline photovoltaic cell and component manufacturing plant is in preparation and is expected to be officially opened in Changzhou Jintan Zhixi Town Industrial Park. If the framework agreement is successfully implemented, it will further enhance the company's photovoltaic module and related product capacity, enhance the company's photovoltaic module and related product manufacturing technology level, automation level, cost control, international brand image and other core competitiveness, expand the company's photovoltaic The share of products in the global market has a certain positive impact on the company's performance.
In 2017, the number of shipments of Dongfang Risheng components increased significantly. It is predicted that in 2017, Dongfang Risheng is expected to rank sixth in domestic component shipments. As of 2016, Dongfang Risheng's cell capacity is 1.5GW and its component capacity is 3.1GW. However, in just one year, it has increased several times, and the scale has reached tens of billions of yuan. In the future, the PV module production capacity of the East will rise rapidly to 13.1GW, which will become the leader in China's first-line component companies. Zhuang Yinghong, director of the global market of Dongfang Risheng, said that this capacity expansion may bring a new round of industry consolidation, but the integration is mainly high-efficiency production capacity or enterprises.
In recent years, the global PV market has continued to grow, and national policies have continued to improve. China's PV market continues to grow at a high rate, higher than industry expectations. New domestic installed capacity and cumulative installed capacity continue to occupy the global highlands. Data show that in 2017, China's battery production was 68GW, an increase of 33.3%; component production was 76GW, an increase of 43.3%. The production scale of all links in the industrial chain accounts for more than 50% of the global total, and continues to be the world's first. At the same time, the photovoltaic industry chain is constantly improving, and the photovoltaic market is constantly regulated. All major companies are looking at opportunities to upgrade technology and expand production capacity in order to gain a larger market share.
Excess warning
In fact, at the same time as the expansion of domestic PV companies, the voice of over-capacity in the industry has already appeared. The data show that in 2009-2011, in the global PV market, especially the European PV market, China's PV production capacity has further expanded rapidly. However, as the market growth rate remains above 70%, the imbalance between industrial supply and demand has not been highlighted. In 2012, the global PV new market growth rate was only 6%, the global polysilicon production capacity exceeded 400,000 tons, and the actual production and demand was only 236,000 tons and 230,000 tons, far below the production level.
Affected by it, in 2012, 90% of China's polysilicon enterprises were forced to stop production. In 2011, there were 262 photovoltaic companies in China, which had dropped to 112 in 2012. Even so, the capacity of PV modules built in China in 2012 reached 45GW, an increase of 700% compared with 2009. In the case of a sudden slowdown in the market, overcapacity problems have been concentrated, product prices have fallen sharply, capacity utilization is seriously insufficient, and production and operation are difficult.
In February of this year, Tongwei shares executives said in an institutional survey that at the beginning of February, the price of polycrystalline silicon cells has stabilized and rebounded. After 1.7 yuan/W fell to 1.3 yuan/W in early January, it has risen to 1.35 yuan/W. The price of single crystal cells has not dropped much, and has dropped from around 1.7 yuan/W to 1.6 yuan/W since January. "Many cell manufacturers have begun to lose money, such as Taiwanese manufacturers, have begun to lose cash flow production status."
At the same time, Longji shares warned in a notice that with the rapid development of the photovoltaic industry, some small and medium-sized enterprises that were originally facing market elimination began to resume production, resulting in the elimination of excess capacity. On the other hand, the backbone enterprises in the industry rely on scale. Advantages have also expanded production capacity. The recovery of backward production capacity and new production capacity will intensify disorderly competition within the industry. The PV industry may once again face the risk of market environment changes brought about by overcapacity. Zhuang Yinghong said that the overcapacity of the photovoltaic industry is still related to technological innovation and industrial policy issues. Insufficient innovation is the core issue of overcapacity. As the progress of photovoltaic technology is more moderate, it is impossible to effectively replace the existing capacity and eliminate the old capacity.
The industry believes that China's photovoltaic capacity growth is too fast, affected by both internal and external factors. First of all, the photovoltaic industry has a large investment and a large number of employees, which can not only create GDP but also promote employment. Many local governments have developed photovoltaics as a key industry. In addition, the photovoltaic manufacturing industry has a typical economies of scale, and only by continuously expanding the scale can it effectively reduce costs. At the same time, the company itself has the will to further expand production capacity and market share to squeeze competitors, which will also lead to overcapacity.
Difficulties and opportunities
China defines an industry with a production capacity exceeding 25% of market demand as an overcapacity industry. The data shows that the photovoltaic industry's capacity utilization rate in 2015 is only about 60%. Under the conditions of market economy, moderate overcapacity is conducive to the role of competition mechanism. However, at present, overcapacity in some industries in China has exceeded the normal market tolerance, which will have a serious impact on economic growth and smooth operation.
In the first round of capacity competition that appeared ten years ago, photovoltaic companies that were supported by local governments rushed to expand aggressively, resulting in a serious overcapacity in the industry. Jiangxi Saiwei and Wuxi Suntech collapsed after tens of billions of debts. Nowadays, with the industry continuing to rise, giants such as Tongwei, GCL, Central and Longji are accelerating their capacity expansion. For example, Tongwei announced an investment plan of over 30 billion yuan last year. In January of this year, Longji announced its three-year expansion plan. Based on the 150 GW wafer capacity at the end of 2017, it will strive to achieve a capacity of 28 GW of monocrystalline silicon wafers by the end of 2018 and 45 GW by the end of 2020.
For the photovoltaic industry under the overcapacity warning, Zhuang Yinghong said that the current dilemma facing the photovoltaic industry is mainly the continuous double-counter policy of the overseas PV market, such as the United States and India. This makes it difficult for domestic PV companies to make a big push in these markets overseas. However, the dilemma is also an opportunity. Overseas emerging markets and cities along the “Belt and Road†have gradually entered the eyes of domestic PV companies, and the “going out†strategy has seen new developments. In addition, the overcapacity of the photovoltaic industry and the decline in product prices are also a major problem nowadays. It is also because of this situation that enterprises have begun to expand their production capacity of new technologies, research and develop low-cost and high-efficiency products, and strive to make photovoltaics available online at an early price.
In addition, industry insiders said that as the current PV market is still in the early stage of development, it will maintain its growth momentum for a long time to come, so the current overcapacity does not mean that there will be surplus in the future. At the same time, China's photovoltaic industry has a strong competitive advantage in the global market, and has occupied more than 70% of the global market. Therefore, China's photovoltaic production capacity corresponds to the global market. From the comparison of the annual installed capacity of the global market and China's photovoltaic production capacity, The problem of overcapacity in photovoltaics is not obvious.
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