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The subsidy is lowered and the profit-making photovoltaic industry chain is fatally wounded.
The downstream will force the upstream products to cut prices, and the industry may end the profiteering. Entering the normal development track. The government's plan to reduce the subsidies for solar photovoltaic projects in 2011 first forced the price of products in all parts of the Chinese PV industry to fall. However, many industry insiders pointed out that the overall decline in the price of industrial chain products indicates that the photovoltaic industry has entered a normal development track. Polysilicon, silicon wafers and other companies have enjoyed high profits before. This round of price cuts only makes it a part of high profits, and the most tested will be PV module manufacturers. Price adjustments across the board were mainly due to the fact that yesterday, a senior manufacturer of photovoltaic products, Mr. Yang, after reviewing the recent product inquiry form, said to the “First Financial Daily†that the specification of 230 watt polysilicon components is currently at $1.75~ 1.8 US dollars / watt, compared with last year's November 1.92 ~ 2.05 US dollars / watt, the decline was about 15%. Another person from the marketing department of Nanjing Photovoltaic Battery Enterprise told reporters that the price of PV modules in the whole year last year has been stable and rising, and has been maintained at around 1.5 Euro/W, but last December was a turning point, and the European and American markets entered the winter. The demand has decreased. The PV module price in February has dropped to 1.3 Euro/W. Although it has slightly increased from January, it has fallen by more than 10% from the end of last year. Not only is the price of PV modules diving, but the prices of products in the upper and middle reaches are also falling. The price of a 245-watt monocrystalline module was roughly $1.89 to $2.01 per watt two months ago, while the latest market price on February 15 fell to $1.74 per watt. In addition, the 156 mm × 156 mm polycrystalline silicon sheet is priced at RMB 27.5~29 yuan/piece, which is lower than the 31 yuan/piece in November last year. The decline in the two types of products is 11% to 13%. Mr. Yang believes that in the past two months, the diving rate of photovoltaic products is relatively large. “Governments including China, the recent reduction of subsidies to the photovoltaic industry may be one of the key reasons for the latest round of price diving.†China's subsidy standard for building materials and other photovoltaic building integration projects is no more than 20 yuan / watt, the maximum subsidy in 2010 is 17 yuan / watt. According to the 2011 domestic new policy and the current price estimates of various products, domestic PV subsidies have dropped by 30% to 40% compared with two years ago. In addition, Germany's latest PV policy also shows that in July this year, Germany's local PV subsidies will fall by about 15%. The French government also suspended the construction of some PV projects on December 10 last year, with a suspension period of three months. The country is also studying whether it should further reduce subsidies to the industry. Under these backgrounds, the decline in the price of photovoltaic products has become inevitable. According to the latest report from the consulting firm IMS, it is expected that in the first quarter of 2011, the price of PV industry supply chain products will fall sharply. At the same time, it predicts that the cost of upstream products such as polysilicon will fall by 4%. The upstream and downstream profit margins are 10 times different. China Merchants Securities researcher Wang Liusheng believes that the price reduction of downstream PV modules is firstly adapted to the new policies of countries to reduce PV subsidies, but at the same time, some downstream PV module manufacturers are forced to force upstream and midstream enterprises in this way. The supply prices of polysilicon, silicon wafers and Other Products are gradually lowered. It can be seen that the diving range of PV modules is greater than the price reduction of the products in the upper and middle reaches. "While component companies do this, it can also encourage upstream and midstream companies to significantly increase production efficiency and upgrade technology." In addition, because there are hundreds of PV module factories in China, although the global PV installation may reach 20G watts this year, compared with last year. More than 20% increase, but the competition of PV module companies is more intense. Some second-tier manufacturers also need to reduce their prices to gain new market share and scream to first-tier companies. Shi Zhengrong, Chairman and CEO of Suntech Power (STP.NYSE), once complained to this reporter that in foreign countries, China's PV module companies are “killing each other†because of some Chinese companies with weak brand or brand appeal. In the continuous killing of low prices, this has brought pressure to first-tier manufacturers such as Suntech. For the entire industry chain, the previous high profit margins have been criticized. Jiang Wen, chairman of Aerospace Electromechanical (600151.SH), said in an interview with this newspaper that the gross profit margin of the PV industry chain is estimated to be no less than 30%, of which the component is 5%, while the gross profit margin of the power station and upstream business is much higher. this number. In June 2010, GCL-Poly (03800.HK), which is mainly engaged in polysilicon production, had a net profit margin of 15%. In September of that year, the net profit margin of the silicon manufacturer Jiangxi LDK was as high as 14%; Underneath, Suntech’s net profit was only 1.37% in September of that year. Jiang Wenzheng also uses polysilicon as an example. Although the state has regulated the polysilicon industry, such as the technical specifications and production scale of polysilicon plants, China has still imported 41,900 tons of polysilicon last year. The overall import volume this year is estimated to be more than 20,000 tons. He believes that although China may invest 70,000 to 80,000 tons of polysilicon production capacity, the true output ratio may not reach 60%. Wang Liusheng believes that polysilicon will still be in short supply in the short term and the gross profit margin is still high. Now even if it is a drop in price, the impact on such a high-margin product is not great. At present, the phenomenon of price reduction of photovoltaic upstream products across the board actually indicates that the photovoltaic industry has gradually entered the normal development track.