Three major causes of excess photovoltaic capacity

The photovoltaic industry has been the most developed and the best investment industry since its inception, and it has experienced craziness until today’s crisis. The growth of demand in foreign markets is slow, and the domestic market has not yet opened up. There is no way to consume huge amounts of photovoltaic capacity, and it is like a large mountain pressured by the industry. For a time, excess capacity has become the most discussed original sin. So, what are the causes of excess PV capacity?

Point of View 1: Profit is too high

An executive from a Hong Kong-funded company in Hunan said that the reason why the photovoltaic capacity is so large is because profits have been too high in the past. In the crazy year of the industry, some links are as high as 50% of profits. This is a morbid phenomenon. Foxconn, the world's largest electronics foundry, has only 5 points in gross profit.

An R&D officer from Hebei Hansheng Optoelectronics Technology Co., Ltd. pointed out that in previous years, the profit of PV was too high, and it was highly sought after by the company. Together with too much hot money, it could not find any investment channels. Like seeing life-saving straw, it's time to go.

With the industry entering the integration period, the domestic photovoltaic components and raw materials industries have bid farewell to the era of huge profits in the past. After this round of adjustment period, it is believed that the photovoltaic market will gradually return to rationality, and companies will face the test of hard power such as R&D, management, and cost control.

Point 2: The threshold is too low

According to industry insiders, the technologies in all aspects of the photovoltaic industry will be available in the next three to five years. "A production line for silicon wafers, batteries, and modules can only be put into production in a matter of months if it is fast."

The above-mentioned Hebei Hansheng Optoelectronics told reporters that the traditional technology of Jingshi is mature, and many equipment manufacturers directly turn the key (turnkey project) and the money will be able to do it.

“In addition, in the entire solar photovoltaic industry chain, component manufacturing has low thresholds, low investment, and quick results, attracting a large number of production companies, and making a large number of small component companies.” This also caused excess domestic packaging capacity and product quality. It is not homogeneous, and the added value of the products is low, the profits of the component companies are low, and the competitiveness is weak.

The industry entry threshold is too low, leading to the industry's low-level, low-tech redundant construction. Experts in the industry pointed out that there are some technical requirements in the photovoltaic industry chain, and few companies in the country can get involved. Some links are still blank.

China's photovoltaic industry, like other manufacturing industries, suffers from a lack of core technology. According to a photovoltaic R&D officer from Shanxi, research institutes such as the Chinese Academy of Sciences, the Shanghai Jiaotong University Solar Energy Institute, the Zhejiang University’s Silicon Materials Laboratory, and the Sun Yat-sen University’s research institutes are still far behind each other in terms of production and research. However, their speed of development and achievements are worthy of recognition. In the future, relying on China as the world's largest photovoltaic manufacturing base, this advantage will be able to develop faster.

He pointed out that more and more photovoltaic companies cooperate with domestic scientific research institutions, which will help promote the transformation of the results of production-learning-related technologies. These cooperation platforms have also become the cradle for the training of senior R&D personnel.

Point three: lack of reasonable guidance

When the photovoltaic industry was a few years ago, local governments did not want to vigorously develop this new industry and gave many preferential policies in terms of land, taxation, and silver loans. Photovoltaic development zones and industrial parks all over the country have blossomed. The investment promotion policy of “big up and fast up” has led PV companies to go head-to-head. Blind construction and extensive expansion have caused serious overcapacity.

As an emerging industry, photovoltaics are still far from the stage of full marketization. The government's policy support, orderly guidance and timely intervention are indispensable. A number of industry sources pointed out that if there is a reasonable guidance on the policy and the project approval threshold is set, the situation of overcapacity will be alleviated.

As early as April of 2008, Suntech CEO Shi Zhengrong expressed concern about the follow-up of PV companies. He said that the momentum of the domestic PV companies' rapid development is worrying, and it is time for PV companies to set an entry threshold. Now. Nowadays, many provinces, cities and even counties have developed the photovoltaic industry as a pillar industry. However, if they are not well cared for, the photovoltaic industry may be swept away.

"More importantly, we must strengthen industrial scientific planning, rational distribution, control of scale, and implement strict environmental protection access."

Although there was no shortage of rational voices in the industry at that time, they could not resist everyone's submission to temptation. The solar photovoltaic industry is still too young. The process of growth cannot be easy. The swaying road is not smooth, but the harvesting experience is precious.

Recognize the situation and improve your internal skills

Of course, everything will not exist in isolation, as there are many reasons for the excess capacity of photovoltaics. Right now, it is most important for companies to overcome difficulties. Photovoltaic people pointed out sharply: “Even if it is the current market, there are still companies that are making money, and not all sectors of the industry are losing money. Companies should find reasons for themselves.”

The above-mentioned high-level enterprises in Hong Kong, Hunan, said that in recent months and their peers, we believe that the prices of components will also fall. It is hoped that enterprises will understand the situation and improve their internal skills, instead of relying on the "rescue" of the policy.

If you simply wait for the "rescue", I'm afraid it will be like waiting for a rabbit to wait until it is futile and the company has no advantage.