What qualitative changes have occurred in China’s photovoltaic industry in 2014?

After studying the photovoltaic industry for a long time, you will feel a sense of pride because after a period of time, you will find that China’s module production capacity ranks first in the world. After a period of time, you will also find that China’s annual construction scale of photovoltaic power stations ranks first in the world, and you will firmly believe that in the near future, China’s photovoltaic industry will still achieve a new global number one.

At the end of the year, it is time to review and prospect China’s photovoltaic industry, and changes in quantity are always the starting point for thinking. Looking back at China’s photovoltaic industry in 2014, I don’t know why this fixed thinking seems to have been unable to achieve the desired space. Unlike previous years, you still care about the output and growth rate. Unlike previous years, you may unexpectedly find that your thinking about China’s photovoltaic industry is no longer just about how to catch up with the world, but how to stay ahead of the world.

The connotation of “China’s photovoltaic industry is leading the world” must not be limited to the sales volume of photovoltaic products ranking first globally and the annual installation volume of photovoltaic power stations ranking first globally. It should include the entire process of China’s photovoltaic industry from quantitative to qualitative transformation, and its manifestation is the transition from incomplete marketization to complete marketization, which in turn promotes the development of the photovoltaic market on a large scale. The time required for this qualitative change process cannot be predicted at present, but the issue of qualitative change has reached a time for discussion, which is the biggest difference between analyzing China’s photovoltaic industry in 2014 and previous years.

The progress of China’s photovoltaic industry is shifting from quantitative to qualitative changes

Since the large-scale industrialization of photovoltaics at the beginning of this century, people’s analysis of the photovoltaic industry has mainly focused on the statistical and predictive levels of subsidy policies, product output, total power station construction, growth rate, and market share in different countries. Looking back at the analysis of different financial reporting periods of the photovoltaic industry by major research institutions worldwide in 2014, this is also the case. However, the study of individual phenomena that occurred in the photovoltaic industry in 2014 may not be rigorous enough if limited to this level. Although they may appear to be quantitative changes, do they imply essential changes? For example, on the noon of June 9th, Germany’s photovoltaic power generation accounted for 50% of the total electricity generation on that day. For example, the fact that “photovoltaic power generation is connected to the grid at an affordable price” is changing from an individual phenomenon to a more mentioned fact. These phenomena, although scattered and uncertain, may not necessarily indicate anything, but the feeling of long-term attention to the photovoltaic industry is reminding people whether the photovoltaic industry is undergoing changes from quantity to quality, although it is still far from conclusive.

Discussing this phenomenon may be more representative of analyzing China’s photovoltaic industry, as it is a major photovoltaic country in the world. Just as determining a geographical location cannot be separated from longitude, latitude, and altitude, determining the current stage of China’s photovoltaic industry can be observed from the following dimensions:

From a policy perspective, the Chinese government’s emphasis on the photovoltaic industry is unparalleled and far-reaching. Starting from the “Several Opinions of the State Council on the Healthy Development of the Photovoltaic Industry” in 2013, relevant national departments have introduced policies for the photovoltaic industry from macro to micro, from planning to management, from upstream product processing to downstream power station construction. According to rough statistics, the number of national level documents was 14 in 2013 and more than 10 in 2014, with dozens of supporting documents from local governments and subsidy standards ranging from 0.1 to 3 yuan per watt. The transition of the photovoltaic industry from incomplete marketization to complete marketization is a process of continuous technological improvement and cost reduction, as well as a process of continuously exploring how to obtain maximum market effects through minimum subsidy costs. Photovoltaics is a brand new undertaking for humanity, and it needs to continuously explore and move forward with a positive attitude. So the photovoltaic industry documents issued by governments at all levels appear to be a quantitative change on the surface, but behind it is a qualitative transformation process that drives an industry.

In terms of quantity, China’s photovoltaic industry has been the world’s top in the past and will continue to be the top in the future. From the perspective of product market, since 2007, China’s sales of photovoltaic modules have always been the world’s top. Although the “double reverse” has caused a slight decrease in global market share, it has now returned to the 60% level; From the perspective of the annual power station construction market, the total amount of photovoltaic power station construction in China was over 10GW in 2013, and the figure for 2014 is expected to be slightly higher, making it the world’s largest country in annual photovoltaic power station construction for two consecutive years. If there are no significant changes, this state will be maintained for a period of time.

From the perspective of stage division, the most difficult period of integration in the photovoltaic industry has been passed. Against the backdrop of global photovoltaic industry integration, the integration period of China’s photovoltaic industry began in early 2011 and should end in 2016, with 2013 being the lowest period. Although the integration speed of China’s photovoltaic industry lags behind other developed countries, the integration of China’s photovoltaic industry is accelerating due to factors such as the rapid expansion of the domestic terminal market, the entry of huge amounts of capital, and the accelerated and reasonable supply and demand relationship. Specifically, in the upstream production stage of crystalline silicon raw materials, with the successive bankruptcies of companies such as Tianwei Sichuan Silicon Industry, Xinguang Silicon Industry, and Ledian Tianwei, the product output of enterprises that meet the “Photovoltaic Manufacturing Industry Standard Conditions” such as Poly GCL in 2013 has accounted for 85.7% of the total market, and competitive enterprises are rapidly approaching a reasonable level in terms of quantity and market share; In the production stage of midstream components, this is the key and difficult point of this industrial integration. Although a large number of non competitive enterprises still exist and market share is still scattered, large-scale enterprise restructuring is still ongoing, manifested in large-scale capital acquisitions of non competitive enterprises, such as Shunfeng Electric’s acquisition of Wuxi Shangde Assets, Tongwei Group’s acquisition of Saiwei Hefei Assets, and Poly GCL’s restructuring of Chaori Assets, It is also reflected in the combination of capital and competitive enterprises, such as China Development Bank, Macquarie Bank, and New Tianyu Capital’s joint capital support for Jingke; In the construction phase of downstream power stations, due to the fact that this market is not only a photovoltaic product market but also a financial product market, a group of large private capital is entering, such as Zheng Jianming, Zhongmin Investment, Green Giant, Evergrande Real Estate, etc. The increase in market power will inevitably drive the progress of market behavior.

In short, China’s photovoltaic industry has passed the most difficult period and is in a new stage of development. Affected by the continuous and powerful role of the government, China’s photovoltaic industry is undergoing subtle changes from quantitative to qualitative, and from incomplete marketization to complete marketization.

When things reach a certain level, their influence and responsibilities vary. Due to the unique size of China’s photovoltaic industry, it largely represents and affects the level of global photovoltaic development. The changes that are happening in Chinese photovoltaics are profound, so the impact of Chinese photovoltaics on global photovoltaics should not be limited to quantitative aspects.