Photovoltaic Product Price Reduction Survey | Behind the Price Reduction, Who is Happy and Who is Worried?-Anhui Sungeter energy

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Photovoltaic Product Price Reduction Survey | Behind the Price Reduction, Who is Happy and Who is Worried?

Release time：

2021-11-12

　　According to the Economic Voice of China Central Radio and Television, "Tianxia Finance and Economics", the photovoltaic market has experienced significant fluctuations recently, with prices of photovoltaic modules significantly decreasing. For the first time in history, prices below 1 yuan per watt have appeared, which is only about half of the price at the beginning of the year. Against the backdrop of significant growth in global photovoltaic installation, why has the price of photovoltaic modules fallen against the trend? The third article in the Economic Voice series, "Investigation of Photovoltaic Product Price Reduction," was launched on November 26th: Who is happy and who is worried about the price reduction?

　　In theory, the most direct impact of photovoltaic module price reduction on downstream is to reduce installation costs and stimulate installation demand. In interviews with reporters, it is true that some photovoltaic project developers have reported a significant increase in demand for photovoltaic installation and a significant increase in order volume recently.

　　Developer A of Distributed Photovoltaic Projects: There are many installations of distributed photovoltaics now, and we have approximately 3000 clients.

　　Distributed photovoltaic project developer B: Since March this year, we have installed nearly 6000 households.

　　For photovoltaic ground power stations, the situation is more complex. According to calculations, in areas with good lighting conditions such as Xinjiang, photovoltaic power stations can theoretically reduce the cost of electricity per kilowatt hour to below 0.1 yuan, far lower than thermal power, under the premise of full capacity. However, industry insiders point out that the overall investment in ground power plants is huge, and there is limited space for the continued decline in photovoltaic module prices, making it difficult to drive a significant increase in installed capacity demand. "Any power station can be built as long as it receives approval, and the yield is good. Now it is already 1 yuan per watt, and even if it drops further, it cannot fall by 0.9 yuan like this year. It is just another drop of 0.05 yuan, 0.1 yuan, etc. In absolute terms, the impact on the cost of the power station is negligible. All the power stations that can be built now are being built, and they cannot be built because they cannot be developed."

　　Compared with distributed photovoltaics, ground power plants have higher costs in terms of land, energy storage, access, and operation, and some projects are also more difficult to consume. Zhou Dadi, academic advisor to the China Energy Research Association, said that some places have raised these costs to hedge against the benefits of component price reductions, and developers may not necessarily benefit from them.

　　Zhou Dadi introduced, "From the aspects of land use, internet access, and even electricity prices, the previous discounts are no longer available, and we still have to bear a lot of services for the existing power system, including the power grid, coal-fired power, and other aspects. The price pressure on new energy is also increasing."

　　For the production side, the price reduction at each link of the photovoltaic industry chain indicates that supply exceeds demand, and industry competition will intensify. In order to seize the market and accelerate shipment speed, some enterprises will continue to engage in price wars, and those without a full industry chain advantage will face a significant decline in profits or even losses. Industry insiders say that this means the photovoltaic industry will accelerate its reshuffle. "Nowadays, every large enterprise has a net profit of 2% to 5%. Of course, without advantages in cost, technology, or industrial chain, it is not possible. In this situation, enterprises without vertically integrated industrial chains will be more miserable, which is survival of the fittest."

　　At present, from the perspective of the operating rate of the photovoltaic industry, the gap is quite obvious. The operating rate of top enterprises is still generally high, above 90%. The operating rate of small factories has rapidly decreased to 30% to 40%. In the view of Liu Yiyang, Deputy Secretary General of the China Photovoltaic Industry Association, this indicates that the industry reshuffle and survival of the fittest have begun.

　　Liu Yiyang said, "The operating rate of the industry has decreased slightly, after all, prices have decreased, which is also a process of clearing. If the operating rate is very high, how can there be a phenomenon of clearing? The operating rate has begun to differentiate, and some newly entered enterprises have started selling equipment, or they have not ordered equipment, but the operating rate of top enterprises is relatively high."

　　For the entire photovoltaic industry, both price increases and price reductions have gone through multiple rounds before. Liu Yiyang said that the price reduction may seem like a low point in the industry on the surface, but after this period, excellent enterprises will stand out or grow stronger, promoting high-quality development of the industry.

　　Liu Yiyang said, "Price reduction is a normal behavior in a market economy, which will make excellent enterprises stand out. Some poorly managed enterprises need to be cleared. After these enterprises are cleared, the industry will once again usher in high-quality development, which is a normal phenomenon."

SUNGETER