In 2024, the PV industry has ushered in an important turning point. Recently, under the dual pressure of overcapacity and price war, the China Photovoltaic Industry Association took the lead in promoting enterprises to sign a self-discipline convention and signed a self-discipline convention to jointly control production and ensure prices, in order to stabilize the market and avoid vicious competition. This move is not only a positive response to the current predicament, but also an important step to promote the high-quality development of the industry. However, whether the implementation of these measures can really help the industry move towards healthy development still needs in-depth analysis.
Ⅰ the status quo of the industry: the vicious circle of price war and overcapacity
In 2024, the photovoltaic industry will usher in an obvious overcapacity problem after rapid expansion, and price war will become a key word in the market in the first half of the year.
- Polysilicon and module prices plummeted: Polysilicon and wafer prices fell by more than 33%, and N-type TOPCon cell and module prices fell by more than 30%.
- Shrinking industry profits: The module sector has borne the brunt, and some companies have even bid below cost, resulting in large-scale losses.
- Cooling of the capital market: The photovoltaic sector has been given a cold reception by funds, and the stock prices of companies have generally fallen.
This vicious competition and price decline not only weakens the profitability of enterprises, but also poses a threat to the stability of the entire industrial chain, forcing the industry to seek self-help.
Ⅱ Self-discipline Convention: a new starting point for production control and price protection
In response to the above problems, the China Photovoltaic Industry Association has promoted an industry self-discipline convention, which clearly proposes to achieve a rational return to the market through production control and price protection.
1. Core measures: cost bottom line setting
The association pointed out that winning the bid below cost was suspected of violating the law, and gave the bottom line of the production cost of N-type M10 double-glass photovoltaic modules as 0.68 yuan/W, which is generally regarded as a new benchmark in the industry.
Figure: Say goodbye to involution: photovoltaic companies have joined forces to control production, and the bottom line of 0.68 yuan/W cost has become a new benchmark in the industry
2. Enterprise response: price stabilization has achieved initial results
Leading companies have taken the lead in raising module quotation expectations to alleviate price competitive pressures. The data shows that module quotations have become rational in a number of tenders in October and November:
- CECEP PV module framework agreement procurement, the average price reached 0.694 yuan/W.
- China Southern Power Grid Energy PV module bidding, the average price is about 0.691 yuan/W.
- In 2024, the average price of TOPCon modules quoted by China Coal is RMB 0.755/W, and the average price of P-type modules is RMB 0.716/W.
These data show that the implementation of the self-regulatory pact is gradually playing a role, and market prices are showing signs of recovery.
Ⅲ Industry challenges and consensus on high-quality development
1. Optimistic demand for new installations
Wang Bohua, honorary chairman of the China Photovoltaic Industry Association, said that the new installed capacity is expected to reach 230GW to 260GW in 2024, hitting a record high. This reflects the strong demand for photovoltaic power generation in the domestic and foreign markets.
2. External uncertainties and strained domestic resources
Despite strong demand, the industry still faces multiple challenges:
- Overseas market risks: Anti-dumping investigations and trade restrictions on Chinese PV products in Europe and the United States have increased export uncertainty.
- Tight resources in the domestic market: Issues such as land and grid access are becoming increasingly prominent, which may affect the construction progress and profitability of projects.
3. Industry transformation is imminent
Although vicious competition can be temporarily curbed, in order to achieve long-term healthy development, enterprises must shift from price competition to technological innovation, enhance product added value, and promote industrial upgrading.
Ⅳ The key role of technological innovation
The control of production and price protection has won a breathing time for enterprises, and also provided an opportunity for the industry to reflect and transform.
- N-type technology becomes mainstream: N-type TOPCon modules are expected to dominate the market due to their high efficiency and low attenuation.
- Intelligent and lightweight components: Through material innovation and manufacturing process optimization, the energy density and transportation efficiency of modules will be further improved.
- Integration of energy storage and photovoltaics: With the increase in the penetration rate of photovoltaic power generation, energy storage systems will become an important supporting tool for photovoltaic development, further enhancing the dispatchability and market competitiveness of photovoltaic power generation.
The application of these technologies will not only improve the overall efficiency of the industry, but also create new profit growth points for enterprises.
Ⅴ Editor's point of view: the significance and limitations of industry self-discipline
From the perspective of industry observers, the editor of China Exportsemi believes that the implementation of the self-discipline convention reflects the collective wisdom and response ability of photovoltaic enterprises in the crisis. However, it should be noted that although this model of "controlling production and guaranteeing prices" is effective in the short term, it cannot replace the market competition mechanism in the long term.
1. Positive meaning
- Stabilize market expectations: Prices have returned to rationality, which will help enhance investment confidence in the industry.
- Protect the survival of enterprises: Avoid the industry reshuffle caused by price wars, and strive for development opportunities for small and medium-sized enterprises.
2. Potential Risks
- Difficulty in implementation: In the photovoltaic industry, which has a high degree of marketization, how to ensure the self-discipline of all enterprises is a difficult point.
- Lack of innovation drive: If production control and price protection become the norm, it may weaken the incentive for enterprises to promote technological innovation.
Ⅵ Future prospects: health and sustainable development
The self-discipline convention of the photovoltaic industry has laid the foundation for the stable development of the industrial chain, but to achieve the long-term goal, it is necessary to start from the following aspects:
- Deepen technological innovation: take technological progress as the core to improve product competitiveness.
- Optimize industrial layout: Strengthen upstream and downstream collaboration to form a more efficient supply chain system.
- Expand international markets: Strengthen local production and services to reduce export risks in the volatile international trade environment.
Conclusion
After experiencing the pains of overcapacity and price war, the photovoltaic industry is moving towards a new stage of high-quality development through production control and price protection. The cost bottom line of 0.68 yuan/W not only stabilizes the market, but also provides support for the transformation and upgrading of the industry.
In the future, with the advancement of technology and the growth of market demand, China's photovoltaic industry will occupy a more important position in the global new energy market and contribute more to the realization of the global energy transition and carbon neutrality goals.
