Looking forward to the photovoltaic industry in 2024: outdated production capacity is accelerating and new technology development is accelerating

Looking forward to the photovoltaic industry in 2024 outdated production capacity is accelerating and new technology development is accelerating

Looking forward to the photovoltaic industry in 2024: outdated production capacity is accelerating and new technology development is accelerating

“Half is seawater, half is fire.” Zhong Baoshen, chairman of Longi Green Energy, the leader in the photovoltaic industry, used this to describe the photovoltaic industry in 2023.

In 2023, the scale of new photovoltaic installations increased significantly. At the same time, however, due to multiple factors such as capacity expansion, continued decline in prices of industrial chain products, and technological iteration, competition in the photovoltaic industry has intensified.

For 2024, many industry insiders said in an interview with the Securities Daily reporter that the scale of new installations throughout the year is expected to maintain a high growth rate, but it will slow down compared with 2023; the price of photovoltaic industry products may continue to run at a low level, and industry competition will intensify; technological iteration is accelerated, and only new technologies and new products can enter a new prosperity cycle.

The scale of photovoltaic industry installations continues to grow

In 2023, the price of photovoltaic modules continued to decline, combined with the abundant solar resources, to a certain extent stimulated the growth of installation demand. A relevant person in charge of a power station construction company told the Securities Daily reporter that when the component prices were high in 2022, many projects were forced to postpone or cancel. The rapid decline in component prices last year caused the previously deferred projects to start construction, and many new projects also started construction.

For the power station link, the component prices in 2022 and 2023 can be said to be two different things. “The highest price per watt last year was more than two yuan, and it is not new to fall below one yuan recently.” The relevant person in charge of the above-mentioned power station construction company said.

According to data from the National Energy Administration, my country’s photovoltaic industry added 163.88GW of installed capacity in the first 11 months of 2023, a year-on-year increase of 149.4%. The neutral expectation for the global photovoltaic industry’s new installed capacity in 2024 is expected to be 474GW, a year-on-year increase of 16%, which is significantly slower than the 59% growth rate in 2023.

Talking about the expected slowdown in the growth rate of photovoltaic installed capacity in 2024, Qu Fang, an investment consultant of Wanlian Securities, analyzed to the reporter of Securities Daily that it is mainly affected by factors such as grid connection, land use, and policies, which directly affect the development of solar power generation. Among them, distributed photovoltaics are affected by problems such as grid connection, and the space for large-scale promotion is restricted, while centralized photovoltaics are affected by factors such as land and environment, which further affect the overall progress of solar power generation.

In addition, InfoLink stated that in recent years, some countries have begun to restrict the origin of photovoltaic products to ensure energy autonomy. With the significant decline in component prices, the growth of the photovoltaic industry market in 2024 is still optimistic, and it is expected that the demand for components in 2024 will still maintain an increase of about 15% to 20%.

Zhong Baoshen said that the photovoltaic industry has been in a state of demand growth. From the past 15 years, there are very few years with a growth rate of less than 10%, and 90% of the years have grown by more than 10%.

TrendForce analysis said that in general, the growth rate of new global photovoltaic installations is expected to slow down in 2024 and return to rational growth. At present, insufficient grid capacity and wind and solar power consumption have become a key point that restricts the high growth of photovoltaic demand in various countries. The global photovoltaic installation potential can only be further released after the grid completes phased upgrades or energy storage installations are increased.

Job opportunities in the photovoltaic industry are expanding as demand for renewable energy rises
Job opportunities in the photovoltaic industry are expanding as demand for renewable energy rises

Accelerate the elimination of obsolete production capacity

While the growth rate of demand is slowing down, the photovoltaic industry is accelerating the elimination of obsolete production capacity.

In 2023, although the scale of new photovoltaic installations is expected to exceed 400GW, the production capacity of the entire photovoltaic industry chain far exceeds market demand, and the average capacity utilization rate remains at around 50%. Although the increase in overall industry capacity is conducive to the development of the industry, it also makes competition among companies increasingly fierce.

“The profitability of the entire photovoltaic industry chain was at a low point last year. A few leading companies with cost, technology, and market resource advantages still have a certain profit margin, but second- and third-tier companies with poor financial strength face greater operating pressure.” Qu Fang analyzed.

In this context, the company’s operating rate and inventory are affected, the elimination of obsolete production lines is accelerated, and the progress of some new capacity construction is slowed down. In Zhong Baoshen’s view, this “elimination match” may be very different from the past. In addition to the large fluctuations in demand in the photovoltaic industry, the technology iteration is also very fast, and the market increment will be met by new technology products.

“Some ‘players’ who cannot meet market demand, especially those with poor quality control and cost control, will be eliminated, and the market concentration will be significantly improved.” A relevant person in charge of GCL Technology told the reporter of Securities Daily.

But at the same time, companies with technological advantages will usher in good news. As the leader of silicon materials, the relevant person in charge of GCL Technology above predicts that in 2024, with the elimination of obsolete production capacity and the balance of the new supply and demand structure, the price of silicon materials will bottom out and rebound, and high-quality silicon materials will still win excess returns.

Qu Fang said that 2024 will be a year for the photovoltaic industry to continue structural adjustments, the industry differentiation will be more obvious, and new technologies and production capacity will inevitably replace obsolete production capacity.

New technology market share expansion

Industry insiders predict that the market share of new-generation photovoltaic industry products will gradually expand in 2024.

In the silicon material link, the relevant person in charge of GCL Technology said that there are two dimensions for the survival and development of polysilicon enterprises in the future. One is the “threshold line”, that is, whether it can meet the downstream demand for higher and higher material quality; the other is the “survival line”, that is, the control of production costs. In the photovoltaic industry, huge cost differences can be caused by power consumption and other differences, which largely determine whether the company can continue to develop.

“From the current development trend of the photovoltaic industry, N-type products have become the entry threshold, and ordinary silicon materials or low-quality silicon materials have almost no room for survival.” The relevant person in charge of GCL Technology said.

At present, the new generation of photovoltaic technologies mainly includes TOPCon, HJT, BC, perovskite battery technology, and related component products. “At present, the development of BC has exceeded expectations, and the development of HJT has not met expectations.” Shen Wenzhong, director of the Institute of Utilization of Solar Energy of Shanghai Jiaotong University, said in an interview with a reporter from Securities Daily.

It is understood that TOPCon currently has the largest production capacity among several new technology directions. Due to the large-scale expansion of TOPCon production capacity in the short term, there are signs of overcapacity. According to InfoLink statistics, TOPCon’s nominal production capacity is expected to reach 477GW, 662GW, and 725GW in 2023, 2024, and 2025.

“Topcon technology has become the technical route chosen by most manufacturers due to its good compatibility with the existing PERC platform and its relative maturity. However, due to the rapid expansion of production capacity, the price gap with P-type batteries is shrinking.” Shen Wenzhong said.

Looking back at 2023, many leading companies such as Longi Green Energy, Tongwei Co., Ltd., and GCL Technology have made continuous breakthroughs in HJT, BC, perovskite, and stacked cell efficiency and module efficiency. Looking forward to 2024, Qu Fang said that leading companies will further strengthen research and development in the field of technology and strengthen their voice in the industry. The development of new technologies and the layout of advantageous production capacity will be further accelerated.

“In addition, in 2023, many leading photovoltaic companies announced their overseas production capacity plans, which will be gradually implemented in 2024. The advantages of China’s photovoltaic industry chain will be magnified in the global market.” A relevant person in charge of GCL Technology said.

Regarding the future development trend of the photovoltaic industry, Zhong Baoshen said that the photovoltaic industry is a long-term business and a real marathon. Only new technologies and new products can enter a new prosperity cycle.

Environmental benefits are a major driving force behind the expansion of the photovoltaic industry
Environmental benefits are a major driving force behind the expansion of the photovoltaic industry