Leaders in the photovoltaic industry expressed intentions that the industry needs to quickly eliminate excess capacity

Recently, the 2024 H1 Development Review and H2 Outlook Seminar for the Photovoltaic Industry was held in Wenzhou. Some photovoltaic entrepreneurs held a closed-door meeting in Wenzhou, which caused widespread attention in the industry. Currently, both upstream and downstream of the photovoltaic industry chain are in a loss cycle, and the market atmosphere is somewhat grim. Several industry leaders spoke out for the market.

The following are excerpts from some of the leaders' remarks:

At the China Photovoltaic Industry Mid-Year Conference, Wang Bohua, Honorary Chairman of the Association, said: "The current situation of our photovoltaic industry is very severe. Just saying 'severe' is not enough... Prices have dropped too much: polysilicon prices and module bidding prices are both falling, causing increased losses for producers. This is a loss for the entire industry chain, and it is a loss for the entire industry. This is rare and unprecedented in the history of photovoltaic. Moreover, the losses for producers worsened in Q2 compared to Q1." Wang Bohua also stated: "Industry adjustment is necessary; long-term pain is worse than short-term pain. Before all the problems in the photovoltaic industry become irreparable, adjustments must be implemented. And these adjustments should be heavy rather than light, and fast rather than slow. As the saying goes, severe illness requires strong medicine."

Lin Jianhua, Chairman of Foster, said: "The best and fairest way to achieve this round of capacity clearance is to let the market resolve it. Local governments should not save some backward capacities, and they should not force local banks to extend the life of problematic companies. If left to the market, capacity clearance will be very fast."

On the official WeChat account of JinkoSolar, Chairman Li Xiande shared some of his views: 1. Be prepared for the possibility that the current cycle may become the norm; 2. Redefine overcapacity; 3. Make good use of patents as a powerful tool. Support the resolute crackdown on the approach of "using without prior notice"; 4. Quickly eliminate those "unrelated to the market," etc. Chairman Li also called on photovoltaic producers to confidently "go global."

How can photovoltaic companies break out of the vicious cycle of homogeneous competition? Chen Gang, Chairman of Aiko Solar, believes that technological innovation and deeply understanding customer scenario needs are key to breaking out of homogeneous competition.

According to an SMM survey, from the beginning of 2023 to July 26, the prices of polysilicon, PV wafers, solar cells, and modules in the Chinese market have dropped by 81%, 71%, 71%, and 55%, respectively. Moreover, in H1 2024, the capacity utilization rate in multiple segments of the photovoltaic industry chain is expected to be less than 50%. Currently, all segments of the photovoltaic industry chain are operating at a loss, and the price war continues. Recently, more and more companies have been reported to be defaulting on wages and halting production due to cash flow disruptions. Even listed companies with relatively stronger financial positions are experiencing tight cash flow. Market pessimism is spreading, and market expansion has been put on hold. The pain caused by the aggressive expansion of the industry chain from 2022 to 2023 will take a long time to digest, and the industry sentiment is gradually becoming more rational.

The year 2024 is a period of market growing pains and also the beginning of high-quality development for the industry. Continuous technological innovation remains the engine for the industry's long-run growth. Looking ahead to the third and fourth quarters of 2024, the room for price declines in the supply chain is limited, and some segments may even see a temporary rebound. Scheduled production in various segments may reach a small peak in September to October, but producers should avoid a bargain-hunting mentality.