The photovoltaic industry will deduce next year: Silicon Q2 will meet the inflection point, silicon wafers will set off a price war, and distributed power stations will prop up "half the sky".

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Main points of investment:

1. In 2022, the game between supply and demand of the industrial chain may slow down, the price of components will decline, the installed scale of the downstream power station will pick up, and the demand side will form favorable support for the upstream.

2. In 2022, the new production capacity of silicon material will be released one after another, and the price at the end of Q2 is expected to usher in an inflection point.

3. The release of silicon wafer capacity intensifies the wafer price war, and downstream profits are expected to be repaired.

4. The discharge of TOPCon battery accelerates the application of N-type module, and the cost of heterojunction battery still needs to be digested.

5. With the promotion of the whole county and favorable policies, the proportion of distributed photovoltaic installed may reach 50% next year.

Financial Associated Press (Hefei, reporter Liu Mengran)-the construction of a green power system is an important prerequisite for achieving the goal of "double carbon". According to the carbon Dafeng action plan issued by the State Council, by 2030, the total installed scale of wind power and solar power will reach more than 1.2 billion kilowatts. In terms of photovoltaic, Ren Yuzhi, deputy director of the New and Renewable Energy Department of the National Energy Administration, said that by the end of October this year, the total installed capacity had reached 280 million kilowatts, with a new installed scale of about 29 million kilowatts, ranking first in the world for many years. The utilization level of photovoltaic power generation has improved significantly, and the average utilization rate of photovoltaic power generation in China this year has reached about 98%.

The prospect of photovoltaic is still promising, but there is also a consensus that there is differentiation within the industrial chain. A reporter from the Financial Associated Press believes that after the release of new silicon production capacity in the upper reaches of 2022, the competition pattern of silicon wafer links will be reshaped, and the price war on silicon wafers may continue next year in order to meet the challenges of new enterprises. At the same time, "efficiency" as the main theme of the technological development of the photovoltaic industry, after 2021 preheating, N-type batteries are expected to accelerate the landing and promote the promotion of N-type modules in 2022.

In terms of terminal power stations, driven by the huge reserves of domestic photovoltaic projects, new installations are likely to increase to more than 75GW in the whole year, of which distributed power stations may account for 50%.

The "game" has a strong growth at the manufacturing end throughout the year.

Supply chain game is the key word of photovoltaic industry in 2021. In the case of downstream expansion and limited upstream capacity supply, the photovoltaic industry chain will rise across the line in 2021.

On the silicon side, compared with the silicon price of 80,000 yuan / ton at the beginning of the year, the highest transaction price this year exceeded 270000 yuan / ton, an increase of more than 230%. Even if the silicon price is high this month, the average transaction price is still around 250000 yuan / ton.

The rising price of silicon leads to an increase in the cost of downstream silicon wafers and components. Take Longji M10 single crystal silicon wafer as an example, the price quoted in January 2021 was 3.9 yuan per chip, and since then it has risen almost on a monthly basis. The highest price of the year appeared in October this year, with a price of 6.87 yuan per chip, an increase of 76 percent. After two price cuts, the price is currently quoted at 5.85 yuan per piece.

As the bargaining power of battery wafers and components is lower than that of upstream, the price increase is less than that of silicon and silicon wafers. In addition, since the beginning of this year, photovoltaic glass, EVA film, backplane, frame, junction box and other prices have increased differently, component enterprises have greater cost pressure, and the operating rate of head assembly companies before the fourth quarter is only about 50%.

A few days ago, Wang Bohua, honorary chairman of the Photovoltaic Industry Association, said at the annual meeting of China's photovoltaic industry in 2021 that the 2021 installation forecast was lowered from 55-65GW at the beginning of the year to 45-55GW due to lagging indicators and rising prices.

However, although the domestic installed demand has been suppressed, driven by overseas markets, photovoltaic manufacturers still maintain a strong development momentum. Polysilicon production in the first three quarters was 360000 tons, an increase of 24.1 percent over the same period last year. Wafer production was 165GW, up 54.2 percent over the same period last year; battery production was 147GW, up 54.6 percent over the same period last year; and module production was 130GW, an increase of 58.5 percent over the same period last year.

In addition, in terms of efficiency technology, the PERC single crystal battery basically completed the replacement of polycrystalline capacity, and the average efficiency of mass production was 23.1%, with a maximum of 23.56%. Industry insiders pointed out that with the accelerated development of N-type battery industrialization, the future expansion will be dominated by N-type battery chips.

Some component enterprises told the Financial Associated Press that from the recent price reduction of the industrial chain, it is expected that a large number of projects will enter the installed cost range, which can effectively stimulate the demand for rush installation at the end of the year. Installed demand stimulates component shipments, which is expected to form a more favorable support for upstream manufacturing from the demand side next year.

The amount of silicon material may lead to the rewriting of silicon wafer pattern.

From the point of view of the supply and demand game of the industrial chain this year, the price trend of silicon has an important impact on the completion of the installation throughout the year. According to Zhihui photovoltaic statistics, with the gradual release of silicon production capacity, Tongwei will become the largest silicon producer by the end of 2022, with a total global production capacity of 1.29 million tons, which is expected to support 440GW components based on the 93% compact material yield and the silicon consumption of 2.9g/W. However, due to the release of silicon capacity in the second half of 2022, taking into account the capacity climbing, full-year production is expected to be 270GW, normally able to meet demand.

Silicon prices have fallen so far this month and are now down about 8 per cent. However, some industry analysts told the Financial Associated Press that whether the price reduction can be regarded as the inflection point of silicon prices remains to be seen, and the trend still depends on the progress of capacity release. Jibang Consulting believes that the new silicon production capacity will be put into operation one after another in 2022, and the price is expected to reach an inflection point at the end of Q2 and enter the downward channel. However, LV Jinbiao, an expert in the photovoltaic industry, believes that if major companies still lock materials in order to compete for market share as this year, it will be difficult for silicon prices to decline substantially.

In addition, Lu Jinbiao believes that from the point of view that the installed demand exceeds the 200GW in 2022, the supply and demand of polysilicon is basically balanced in the first half of the year, and after the intensive production of new expansion projects in the fourth quarter of 2022, the oversupply of polysilicon is inevitable in 2023.

It is worth noting that after the release of silicon material to accelerate the new production of silicon wafers, the market share of the head enterprises may face challenges, and the competition pattern of silicon wafers may also change in 2022. At present, photovoltaic wafers mainly show a duopoly pattern of Longji shares (601012.SH) and Central shares (002129.SZ). But incomplete statistics, since 2019, CNC (603185.SH), Beijing Express (601908.SH), Shuangliang Energy Saving (600481.SH), Gaojing Solar Energy, Jiangsu Meike and other new second-tier players, have built and proposed wafer production capacity of more than 187GW, the total investment is expected to exceed 46 billion yuan. In this regard, some industry insiders pointed out that in the context of substantial production expansion of new and old players Synchronize, overcapacity in the silicon wafer link next year may be inevitable, and the downward price of silicon may have an impact on the gross profit level of the head enterprise.

In terms of product structure, according to the agency's forecast, the production capacity of large-size silicon wafers (182mm and 210mm) will be further released in 2022, and the combined market share will exceed 70%. The demand for sizes M6 and below will accelerate to shrink, and the market share will be less than 30%.

The first year of N-type components is coming.

At the annual meeting of the photovoltaic industry, the person in charge of Longji shares believes that with the rapid rise of high-efficiency battery technology, the battery has gradually developed from P-type to N-type, and the components will also develop in a more diversified direction. 2022 may be the first year of large-scale application of N-type components.

N-type batteries are mainly divided into three types: TOPCon, HJT (heterojunction) and IBC. Because of the difficulty of mass production of IBC batteries, TOPCon and HJT batteries are the most concerned by the market. According to Jipang Consulting, the market share of N-type batteries will reach 11% in 2022, mainly TOPCon batteries. According to statistics, the planned production capacity of TOPCon has reached 95.3 GW, of which 8.75 GW has been built and 86.5GW is under construction / to be built. Judging from the current mass production lines, most of them are products of M6, M4 and G1 sizes. Since 2020, the new layout of large-size PERC production lines has basically reserved an upgrade interface for the subsequent conversion and installation of TOPCon production lines.

In addition, the industrialization process of HJT battery will be accelerated in 2022. According to statistics, the planned production capacity of HJT is 148.2GW, of which the built capacity is 6.36GW and the capacity under construction / waiting for construction is 141.9GW. However, at present, the investment cost of a single GW4 to 500 million yuan is still high, and the future equipment cost changes determine the promotion efforts of HJT batteries.

However, from a long-term point of view, HJT has a higher conversion efficiency than TOPCon batteries, and HJT can be equipped with IBC and perovskite to further improve the conversion efficiency, which can theoretically increase the conversion efficiency to more than 30%.

Wang Wenjing, CTO of Huasheng in Anhui, believes that heterojunction battery is a subversive technology, and it may even be the ultimate form of crystalline silicon technology. At present, no enterprise can ignore this technology, but they also dare not invest a lot of costs prematurely, and the industry is generally cautious to promote investment from hundreds of megawatts to one or two GW.

Industry analysts pointed out that the future market situation depends on the production process and cost, heterojunction battery if effective cost reduction, the market acceptance will be higher.

Under the main theme of efficiency, the market expectation of N-type battery promotion in 2022 is increasing. According to the Zheshang Securities Research report, from 2017 to 2020, the market share of PERC increased from 15% to 86%, and its permeability increased nearly 6 times in just 4 years, fully replacing the first generation of BSF batteries with strong explosive power. It is expected that in the future, with the maturity of HJT and TOPCon equipment and economic practicability, the process of rapid infiltration of PERC battery will be replicated, and the next generation battery chip technology life cycle will be opened quickly.

The proportion of distributed photovoltaic installation is expected to reach 50%.

Wang Bohua, honorary chairman of the Photovoltaic Industry Association, believes that the installation in 2022, driven by the huge domestic photovoltaic project reserves, may increase to more than 75GW. According to incomplete statistics, the configuration scale of photovoltaic power stations in various provinces (including some wind power) totaled 89.28GW this year, and it has been announced that the scale of large bases exceeds that of 60GW.

According to Ren Yuzhi, deputy director of the New and Renewable Energy Department of the National Energy Administration, by the end of October this year, the country had installed about 29 million kilowatts of photovoltaic power, with a cumulative installed capacity of 280 million kilowatts. In the next step, the competent department will continue to promote photovoltaic base development. We will actively promote the development of large-scale wind power and photovoltaic bases focusing on desert, Gobi and desert areas. among them, the installed capacity of the first batch of projects is about 100 million kilowatts, and construction is under way in an orderly manner in accordance with the principle of "one mature and one to start." and is preparing the second batch of base projects.

It is worth noting that under the favorable policies such as the promotion of the whole county, distributed photovoltaic will become a bright spot in the future installation structure. According to the latest news from the National Energy Administration, the total installed capacity of household photovoltaic projects newly included in the national financial subsidy in November 2021 is 2.86 million kilowatts. By the end of November 2021, the total installed capacity of household photovoltaic projects on the scale of national financial subsidies in 2021 is 16.4886 million kilowatts.

According to Zhihui photovoltaic forecast, if household photovoltaic is expected to be 21GW for the whole year, it will increase by about 105% compared with 2020. Some industry insiders told the Financial Associated Press that the tilt of the subsidy policy is an important reason for the rapid expansion of household photovoltaic installed scale this year. Statistics show that in October this year, the new installed capacity for household use accounted for 51.5% of the total installed capacity of photovoltaic.

A person from a component enterprise told the Financial Associated Press that China is rich in building roof resources, and there is great potential for the development and construction of roof distributed photovoltaic. Previously, due to the wide distribution of building roofs, scattered resources, small single scale, and large workload of development and construction coordination, the larger scale development of roof distributed photovoltaic was restricted to a certain extent. Start the whole county (city, district) to promote the pilot work of roof distributed photovoltaic development, the main purpose is to fully mobilize and give full play to local enthusiasm, guide local governments to coordinate more roof resources, further open up the market, and expand the scale of roof distributed photovoltaic construction.

In addition to the promotion of the whole county, distributed photovoltaic is also getting further policy support. In October 2021, the State Council launched the 2030 carbon Peak Action Plan, which mentioned that by 2025, the renewable energy replacement rate of urban buildings will reach 8%, and the photovoltaic coverage of new public institutions and new factory roofs will strive to reach 50%.

According to Zhihui photovoltaic statistics, in terms of promoting the whole county, 676 counties across the country have entered the model counties, accounting for 1/4 of the county-level units in the country, with a total scale expected to reach 150GW, which is required to be completed by the end of 2023. Analysts believe that in 2022, with the change of investment mode and investment main body, the scale of household photovoltaic is expected to further increase, and the installed capacity of 30-35GW may be achieved.

If the new installation of 75GW throughout the year is expected, the new installation of distributed photovoltaic in 2022 will account for "half of the country".