The "sin" and "penalty" of China's photovoltaic industry

Since the beginning of this year, reports that Chinese PV companies have been mired in the mud and entered the "cold winter" are almost full of networks every day. Suntech Shi Zhengrong retired to the second line, and Saiwei Peng Xiaofeng was facing bankruptcy. Many PV companies fell from huge wins to huge losses and began to lay off large numbers of employees. For a time, the photovoltaic market screamed and smashed.

In the past, the booming and booming sunrise industry has been sunning in just a few years. Is it caused by the European debt crisis? Is it caused by the US and Europe’s “double opposition”? What have enterprises and governments done? What?

Photovoltaic companies: no biggest, only bigger

With the global energy shortage and environmental pollution becoming more and more prominent, photovoltaic power generation has become a new industry with widespread concern and key development by local governments because of its clean, safe and efficient characteristics, thus opening the prelude to the launch of photovoltaic projects and capacity expansion. All over the world, almost crazy, China quickly became the world's largest producer of solar panels.

Blind investment and expansion, even in the face of the US "double opposition" did not stop. Many companies have turned a deaf ear to the high punitive tariffs in the United States. They once suicidal sales, and they have to expand their production capacity, further exacerbating overcapacity. According to statistics, the global production capacity is about 100 gigawatts (GW), while the demand is only 30-50 gigawatts.

The disorder and out of control of capacity expansion brought a fierce international rebound. In the early days, a number of companies in the world declared bankruptcy, including Q-cells and Solon in Germany and Solyndra and Evergreen Solar in the United States. In the process, the price of polysilicon has also experienced a roller coaster-like rise and fall, from a maximum of more than 400 US dollars / kg to a minimum of more than 20 US dollars / kg.

Not only that, but the company has focused on capacity expansion, but has neglected the establishment of the corresponding technical standards, quality standards, evaluation systems, etc., not only creating a huge market bubble, but also making this emerging industry into a low-end quagmire.

Undoubtedly, the "double opposition" in Europe and America is only the last straw to overwhelm the camel. The rapid expansion of solar energy production driven by credit is the real culprit of this "photovoltaic crisis." According to professional analysis, half of the world's solar capacity needs to be shut down before the solar industry recovers from the “capacity” of excess capacity.

Local government: Cheng also Xiao He, defeat also Xiao He

After the "Shangde myth", local governments have introduced "solar industry planning", investing a large amount of money, investing in people, and acting as an important promoter of the expansion of the new energy industry. According to statistics, more than 600 cities in China have made photovoltaics a strategic emerging industry, and polysilicon furnaces have blossomed like steel.

Previously, if there was any industry that could stimulate the enthusiasm of the local government to surpass real estate, it must be photovoltaic. Local governments need political achievements, and naturally hope that enterprises will grow bigger quickly; while PV companies can increase a large amount of taxation and employment, and make a huge contribution to GDP, so the two sides coincide and expand.

Under the strong thrust of the government, especially the loose credit policy implemented for the photovoltaic industry, the company seems to have become addicted to drugs, addicted to the big dry, and frantically expand. In just a few years, China's photovoltaic production capacity has accounted for more than half of the world's, and the world's top ten PV module manufacturers China has taken the top five.

After experiencing the glory of the smash hit, the photovoltaic industry has fallen to the current miserable situation. Apart from the factors of the enterprise, the local government also has an unshirkable responsibility. It is precisely because of the government's strong leadership and fanaticism that the photovoltaic industry has stepped into a painful step. It can be said that "Cheng is also Xiao He, defeat is also Xiao He."

Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission of China, said: In China, local governments are not real governments, they are more like enterprises. Chinese PV companies have inevitably become the guardian of local governments, and their hands and feet are tied more and more tightly. When the "double opposition" emerged in the United States, the government did not take any substantive protection actions against the enterprise.

The photovoltaic industry is currently facing a deep reshuffle, which is determined by market rules. Local governments should also be very cautious in implementing rescue and support for PV companies. It is a great joy to help companies get through the difficulties and get reborn, but it may further exacerbate overcapacity, delay the timing of industry adjustments, and bring more pain to enterprises.

Industry chain status: fear of the tail, the rest of the body

The photovoltaic industry is a complete industrial chain from polysilicon, solar cells, application systems to specialized equipment. The polysilicon required by Chinese PV companies mostly relies on foreign imports in the early stage, and the target market of their own products is mainly concentrated in overseas regions such as Europe and the United States. Both the front and the ends of the industrial chain are subject to people, and their own controllable links are too few, which has become one of the important reasons for China's "photovoltaic crisis."

In terms of raw materials, due to the rapid expansion of production capacity, the price of global polysilicon in the early stage has turned upside down. Many PV companies have deeply invested in it and paid a heavy economic price.

In terms of market, due to the impact of the ongoing European debt crisis and the punitive import tariffs of the United States, the European and American markets in the main sales area are in a weak state. In China, although the government encourages large enterprises, the previous period is on-grid tariffs, grid connection, etc. The delay in progress has not been great, and domestic demand is not strong enough. Internal and external difficulties have caused global demand to slow down in the past year, and the price of panel has fallen by 30%, causing many small enterprises to die. The business situation of general enterprises such as Suntech and Saiwei has also turned sharply, from huge wins to huge losses, and huge amounts of money have been carried. Corporate debt.

Of course, the Chinese government has been working hard to absorb some of the excess capacity of domestic solar panels by increasing the installed capacity. Some analysts predict that China will become the second largest solar panel market in the world after Germany this year. The installed capacity of solar panels will reach 4 to 5 GW, which is twice the installed capacity of last year.

Reflection of the phenomenon: to control the "free hands"

China's implementation of a socialist market economic system with Chinese characteristics, since it is a market economy, should make the market law play a key role, give full play to the market's self-regulating function of "invisible hand". The government should contribute to creating a good investment environment and a level playing field; and is committed to management and regulation in the administrative and public spheres where market rules do not work.

This "photovoltaic crisis" has brought us profound insights:

First, the local government should distinguish the functional boundaries, do not interfere too much with the business operations, and can not make ideas for the enterprises, set the plan, and forget what they should do.

Second, local officials should establish a correct view of political achievements, do things according to economic laws, and do not blindly advancing, so great.

Third, when planning the strategic industry, the government must clearly define the threshold and rational layout to prevent the locals from swarming up; it is also necessary to make sustained and steady progress.

In fact, this kind of lesson has been a lot. As one of the government's strategic leading industries in the past few years, the wind power industry has long been difficult to trace in the 2011 National Development and Reform Commission's "Industrial Structure Adjustment Guidance Catalogue".

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