China's photovoltaic turning point is coming?

Guide: China's photovoltaic industry, relying on the support of local governments, has grown rapidly in just a few years, and the entire industry chain has earned a full profit.

        Since the promulgation of the "Renewable Energy Law" by the German government of Schroeder in 2004, it has stimulated the rise of the global photovoltaic industry. With the support of local governments, China's photovoltaic industry has grown rapidly in just a few years, and the entire industry chain has earned a full profit.

        Under the temptation of huge profits, a large number of speculative follow-up led to blind expansion of the industry and a serious overcapacity. At the beginning of 2011, the supply of the industry reached its peak. At that time, the capacity calculated by the battery was about 55GW, while the installed capacity was only 27GW, and the overcapacity was close to 100%.

        Unbalanced supply and demand caused the market to deteriorate rapidly, product prices fell sharply, and there was even a phenomenon of selling below the cost of cash. In the case of insufficient funds and slow sales, many enterprises are unsustainable and forced to withdraw, and the photovoltaic industry is in a cold wave. Both Saiwei and Suntech have faced the danger of bankruptcy. Although they have repeatedly escaped from danger, the company has already lost its former glory and has been abandoned by the capital market.

        On July 27, China and the EU reached a price commitment agreement on the PV trade dispute. After a 10-month game, the trade friction with the largest amount involved in the history of Sino-European trade ended with a settlement. The photovoltaic concept stocks are turning against the trend, and the turning point of the industry seems to be coming. However, the crisis has not really been lifted, and it is still too early to say that the Chinese PV industry is recovering.

        Chinese PV companies with high dependence on the international market are optimistic. Although the domestic market demand has continued to grow in recent years, it is still not enough to make up for the demand gap caused by the sharp decline in the developed markets. The situation of overcapacity will also exist for a long time.

        In fact, the problems inside the photovoltaic industry are even more serious. Previously, with the support of the government, the photovoltaic industry once ushered in the golden age of development, and the shortcomings of blind expansion, such as shortage of funds, overcapacity, uneven industry and vicious competition, were also highlighted by the downturn in the international economic situation. The China-EU price agreement will only allow the Chinese PV industry to continue to linger.

        On the one hand, China is changing the development model of investment-driven economic growth, and it is impossible for large-scale capital injection PV companies to reproduce. Banks have listed photovoltaics as a restricted support industry last year, and it is already difficult for the PV industry to borrow from banks. Many PV companies, including Suntech and Saiwei, have seen funding gaps. The photovoltaic industry is likely to face a large-scale credit crisis.

        Domestic first-line PV companies can benefit more from the second and third-tier companies in the European market. Small and medium-sized PV companies will have difficulty in squeezing into the European market because they do not have scale advantages and high production costs. This will accelerate the reshuffle of the domestic PV industry.

        After losing the price competitive advantage, enterprises can only seize the market by relying on credibility and product quality, which will force the domestic photovoltaic industry to accelerate structural adjustment and industrial upgrading. Of course, in this process, some enterprises with backward production capacity will be eliminated, and the photovoltaic industry will enter the integration acceleration period.

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