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The importance of overseas production capacity of Chinese enterprises in the layout of photovoltaic auxiliary materials and auxiliary materials is increasing
2023/7/21
On July 20, a seminar on the review of the development of the photovoltaic industry in the first half of 2023 and the outlook for the second half of the year was held in Xuancheng City, Anhui Province. Wang Bohua, honorary chairman of the China Photovoltaic Industry Association, made a review of the development of the photovoltaic industry in the first half of the year and an outlook report on the situation in the second half of the year.
Wang Bohua said that China's photovoltaic industry is developing very rapidly, and this year it has reached a new level. However, the global photovoltaic industry structure is being restructured at an accelerated pace. Overseas photovoltaic trade barriers are becoming increasingly stringent, and the importance of Chinese enterprises' overseas production capacity of photovoltaic auxiliary materials is increasing.
"The industry has reached a new level this year"
Wang Bohua said that in the first half of 2023, the performance of the photovoltaic industry is impressive, and the output of polysilicon, silicon wafers, batteries, and modules has increased by more than 60% year-on-year.
Among them, the output of polysilicon exceeded 600,000 tons, an increase of more than 65% year-on-year; the output of silicon wafers exceeded 250GW, an increase of more than 63% year-on-year; the output of cells exceeded 220GW, an increase of more than 62% year-on-year; the output of modules exceeded 200GW, an increase of more than 60% year-on-year.
"When talking about our photovoltaic industry, there are always many unexpected things. There are many unexpected things. Our (photovoltaic industry) development was already very fast last year, right? Every aspect is very fast, but this year it has reached a big level." Wang Bohua said.
In terms of installed capacity and export, the domestic installed capacity of photovoltaic power generation in the first half of the year was 78.42GW, a sharp increase of 154% year-on-year. The total export volume of photovoltaic products in the first half of the year was preliminarily estimated to exceed US$29 billion, an increase of about 13% year-on-year.
According to Wang Bohua's analysis, based on the situation in the first five months and calculations in June, the export volume of silicon wafers and cells has increased significantly. The export of silicon wafers is mainly in Southeast Asia, and the export of cells is mainly in Asia. From the perspective of export product structure, the proportion of silicon wafers and cells exported has increased, while the proportion of module exports has decreased.
"From the perspective of export regions, Europe is still the largest module export market. The export of silicon wafers and cells is mainly concentrated in Asia. The growth of module exports to Africa is the most obvious, mainly because the export value of modules to South Africa has increased by more than 3 times year-on-year. However, the installation speed of the African market is lower than the export speed of modules, and it will be difficult to maintain a high proportion of growth in the future." Wang Bohua said.
In terms of the European market, in Wang Bohua's opinion, the application for installation procedures in Europe, especially the household photovoltaic market, is relatively complicated, and there is already a shortage of installation workers. Although the relevant procedures are being simplified, constraints such as labor, land, and power grid consumption, coupled with the high inventory level of distributors, may slow down export growth in the future.
"Affected by uncertain factors such as consumption, electricity market transactions, and source network construction progress, the future market will become more and more difficult to enter, and the situation will become more and more difficult to predict." Wang Bohua emphasized in his speech.
However, he also said that the Photovoltaic Industry Association has raised the forecast for China's new installed photovoltaic capacity in 2023 from 95-120GW to 120-140GW. At the same time, the forecast for new global photovoltaic installed capacity in 2023 was raised from 280-330GW to 305-350GW.
Wang Bohua also said that since the beginning of the year, prices in the supply chain have continued to decline after a brief rebound, and the link with the fastest decline has dropped by more than 78% from the highest price last year. The rapid and continuous decline in prices in various links has increased users' expectations for price cuts.
"Global Photovoltaic Industry Structure Accelerated Restructuring"
At present, capital flow in the photovoltaic industry is accelerating among major global photovoltaic manufacturing regions, and the restructuring of the global photovoltaic industry structure is accelerating.
In Wang Bohua's view, the penetration rate of photovoltaics in the world's major economies is constantly increasing, especially in the past five years. The average penetration rate of photovoltaic power generation in the world will be about 4.54% in 2022. The penetration rates of China and the United States are relatively close to the world average, at 4.83% and 4.53% respectively, and there is a lot of room for improvement.
In this context, Wang Bohua believes that the changes in the global photovoltaic industry structure are currently showing three new features: first, it is driven by endogenous market demand and manufacturing excitement/trade barrier policies; second, the coexistence of globalization and localization in the direction of industrial capital diffusion, with China, the United States, India, and Europe as the main targets; and finally, the scale and speed of industrial structure restructuring have increased significantly.
According to Wang Bohua, since 2022, China's photovoltaic industry capital has mainly flowed overseas to Southeast Asia, the United States, the Middle East and India. Among them, in Southeast Asia, the photovoltaic manufacturing industry mainly receives industrial capital inflows from silicon wafers, batteries, modules, photovoltaic glass, quartz sand, film, and inverters; in the United States, it focuses on modules and photovoltaic glass; in the Middle East, it mainly flows to modules and silicon wafers; in India, it mainly flows to inverters and photovoltaic brackets.
He believes that the current overseas photovoltaic manufacturing industry is progressing rapidly, but the scale advantage of my country's industrial chain is difficult to shake in the short term.
According to Wang Bohua, according to the calculations of the European Commission, the total cost of photovoltaic manufacturing in China is 35% lower than that in Europe, and 20% and 10% lower than that in the United States and India, respectively. Taking module manufacturing as an example, the manufacturing cost of Chinese PV module manufacturers is more than 50% lower than the cost of module products produced in the United States and the European Union. Benefiting from low manufacturing costs, China's photovoltaic power generation LCOE (degree cost of electricity) has certain advantages over other economies.
"At present, we are very competitive in terms of total cost and component manufacturing, and our cost is the lowest. The question is, how can we maintain our advantages in the complex domestic and foreign situation? I think cost performance is very important." Wang Bohua said.
Wang Bohua also emphasized that the industry needs to pay close attention to the deeper internationalization needs faced by the photovoltaic auxiliary materials industry.
He cited two cases to further explain: In June 2022, India made the final anti-dumping result on solar fluorine-coated backsheets other than transparent backsheets originating in or imported from China, and decided to impose anti-dumping duties; in July 2023, India launched an anti-dumping investigation on aluminum frames for solar panels/modules originating in or imported from China.
While setting up trade barriers for China's related photovoltaic auxiliary material products, relevant domestic companies in India are also accelerating the planning of related production capacity to fill the vacancies. Among them, Indian photovoltaic manufacturer Renewsys and other companies have been planning to increase production capacity of EVA/POE and other adhesive films (photovoltaic panel packaging materials) since 2022; companies such as Borosil Renewables Triveni are also planning to increase production capacity of photovoltaic glass.
In the United States, in June 2023, the United States International Trade Commission (ITC) voted to initiate a Section 337 investigation on specific photovoltaic connectors and their components. And a month ago, Canadian Premium Sand, a well-known manufacturer of photovoltaic glass in the United States, stated that it would expand its production capacity of photovoltaic glass by about 6GW.
Wang Bohua said that with the increasingly stringent overseas photovoltaic trade barrier policies, overseas photovoltaic companies are also making continuous efforts in the fields of photovoltaic glass, adhesive film, brackets, etc., intending to make up for shortcomings. Therefore, the importance of overseas production capacity of photovoltaic auxiliary materials is increasing.
Wang Bohua said that China's photovoltaic industry is developing very rapidly, and this year it has reached a new level. However, the global photovoltaic industry structure is being restructured at an accelerated pace. Overseas photovoltaic trade barriers are becoming increasingly stringent, and the importance of Chinese enterprises' overseas production capacity of photovoltaic auxiliary materials is increasing.
"The industry has reached a new level this year"
Wang Bohua said that in the first half of 2023, the performance of the photovoltaic industry is impressive, and the output of polysilicon, silicon wafers, batteries, and modules has increased by more than 60% year-on-year.
Among them, the output of polysilicon exceeded 600,000 tons, an increase of more than 65% year-on-year; the output of silicon wafers exceeded 250GW, an increase of more than 63% year-on-year; the output of cells exceeded 220GW, an increase of more than 62% year-on-year; the output of modules exceeded 200GW, an increase of more than 60% year-on-year.
"When talking about our photovoltaic industry, there are always many unexpected things. There are many unexpected things. Our (photovoltaic industry) development was already very fast last year, right? Every aspect is very fast, but this year it has reached a big level." Wang Bohua said.
In terms of installed capacity and export, the domestic installed capacity of photovoltaic power generation in the first half of the year was 78.42GW, a sharp increase of 154% year-on-year. The total export volume of photovoltaic products in the first half of the year was preliminarily estimated to exceed US$29 billion, an increase of about 13% year-on-year.
According to Wang Bohua's analysis, based on the situation in the first five months and calculations in June, the export volume of silicon wafers and cells has increased significantly. The export of silicon wafers is mainly in Southeast Asia, and the export of cells is mainly in Asia. From the perspective of export product structure, the proportion of silicon wafers and cells exported has increased, while the proportion of module exports has decreased.
"From the perspective of export regions, Europe is still the largest module export market. The export of silicon wafers and cells is mainly concentrated in Asia. The growth of module exports to Africa is the most obvious, mainly because the export value of modules to South Africa has increased by more than 3 times year-on-year. However, the installation speed of the African market is lower than the export speed of modules, and it will be difficult to maintain a high proportion of growth in the future." Wang Bohua said.
In terms of the European market, in Wang Bohua's opinion, the application for installation procedures in Europe, especially the household photovoltaic market, is relatively complicated, and there is already a shortage of installation workers. Although the relevant procedures are being simplified, constraints such as labor, land, and power grid consumption, coupled with the high inventory level of distributors, may slow down export growth in the future.
"Affected by uncertain factors such as consumption, electricity market transactions, and source network construction progress, the future market will become more and more difficult to enter, and the situation will become more and more difficult to predict." Wang Bohua emphasized in his speech.
However, he also said that the Photovoltaic Industry Association has raised the forecast for China's new installed photovoltaic capacity in 2023 from 95-120GW to 120-140GW. At the same time, the forecast for new global photovoltaic installed capacity in 2023 was raised from 280-330GW to 305-350GW.
Wang Bohua also said that since the beginning of the year, prices in the supply chain have continued to decline after a brief rebound, and the link with the fastest decline has dropped by more than 78% from the highest price last year. The rapid and continuous decline in prices in various links has increased users' expectations for price cuts.
"Global Photovoltaic Industry Structure Accelerated Restructuring"
At present, capital flow in the photovoltaic industry is accelerating among major global photovoltaic manufacturing regions, and the restructuring of the global photovoltaic industry structure is accelerating.
In Wang Bohua's view, the penetration rate of photovoltaics in the world's major economies is constantly increasing, especially in the past five years. The average penetration rate of photovoltaic power generation in the world will be about 4.54% in 2022. The penetration rates of China and the United States are relatively close to the world average, at 4.83% and 4.53% respectively, and there is a lot of room for improvement.
In this context, Wang Bohua believes that the changes in the global photovoltaic industry structure are currently showing three new features: first, it is driven by endogenous market demand and manufacturing excitement/trade barrier policies; second, the coexistence of globalization and localization in the direction of industrial capital diffusion, with China, the United States, India, and Europe as the main targets; and finally, the scale and speed of industrial structure restructuring have increased significantly.
According to Wang Bohua, since 2022, China's photovoltaic industry capital has mainly flowed overseas to Southeast Asia, the United States, the Middle East and India. Among them, in Southeast Asia, the photovoltaic manufacturing industry mainly receives industrial capital inflows from silicon wafers, batteries, modules, photovoltaic glass, quartz sand, film, and inverters; in the United States, it focuses on modules and photovoltaic glass; in the Middle East, it mainly flows to modules and silicon wafers; in India, it mainly flows to inverters and photovoltaic brackets.
He believes that the current overseas photovoltaic manufacturing industry is progressing rapidly, but the scale advantage of my country's industrial chain is difficult to shake in the short term.
According to Wang Bohua, according to the calculations of the European Commission, the total cost of photovoltaic manufacturing in China is 35% lower than that in Europe, and 20% and 10% lower than that in the United States and India, respectively. Taking module manufacturing as an example, the manufacturing cost of Chinese PV module manufacturers is more than 50% lower than the cost of module products produced in the United States and the European Union. Benefiting from low manufacturing costs, China's photovoltaic power generation LCOE (degree cost of electricity) has certain advantages over other economies.
"At present, we are very competitive in terms of total cost and component manufacturing, and our cost is the lowest. The question is, how can we maintain our advantages in the complex domestic and foreign situation? I think cost performance is very important." Wang Bohua said.
Wang Bohua also emphasized that the industry needs to pay close attention to the deeper internationalization needs faced by the photovoltaic auxiliary materials industry.
He cited two cases to further explain: In June 2022, India made the final anti-dumping result on solar fluorine-coated backsheets other than transparent backsheets originating in or imported from China, and decided to impose anti-dumping duties; in July 2023, India launched an anti-dumping investigation on aluminum frames for solar panels/modules originating in or imported from China.
While setting up trade barriers for China's related photovoltaic auxiliary material products, relevant domestic companies in India are also accelerating the planning of related production capacity to fill the vacancies. Among them, Indian photovoltaic manufacturer Renewsys and other companies have been planning to increase production capacity of EVA/POE and other adhesive films (photovoltaic panel packaging materials) since 2022; companies such as Borosil Renewables Triveni are also planning to increase production capacity of photovoltaic glass.
In the United States, in June 2023, the United States International Trade Commission (ITC) voted to initiate a Section 337 investigation on specific photovoltaic connectors and their components. And a month ago, Canadian Premium Sand, a well-known manufacturer of photovoltaic glass in the United States, stated that it would expand its production capacity of photovoltaic glass by about 6GW.
Wang Bohua said that with the increasingly stringent overseas photovoltaic trade barrier policies, overseas photovoltaic companies are also making continuous efforts in the fields of photovoltaic glass, adhesive film, brackets, etc., intending to make up for shortcomings. Therefore, the importance of overseas production capacity of photovoltaic auxiliary materials is increasing.
"The (photovoltaic) competition chain is lengthening, and it has reached the end of our auxiliary materials. Whether it is the United States, India or Southeast Asia, on the one hand, they are planning their own production. On the other hand, we have to break down trade barriers. This has brought new challenges to our industry and requires great attention."
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