The 630 era ended in the photovoltaic industry game rules have changed

With the passing of this time node on June 30, the “preemptive tide” of the domestic PV market in the first half of the year has finally come to an end. And after the rapid expansion of the power station scale, it is a rather bleak PV market.
Prices have started to fall across the pack, from silicon wafers to batteries to components.
"6·30", does it really symbolize the end of the old-fashioned photovoltaic model, representing the arrival of a new era of photovoltaics? Where should PV companies go?
"We must change our thinking, change our attitude, and change our actions," said Li Xiande, chairman of Jinko Energy Co., Ltd.. After all, the rules of the game in the industry have changed.

The current price of the "basin" in the third quarter
"6·30" began at the end of 2015 with the notice issued by the National Development and Reform Commission on improving the tariff policy for onshore wind power photovoltaic power generation.
The notice proposes to appropriately reduce the price of new onshore wind power and photovoltaic power grids, and clarify that the ground photovoltaic power plants in the first and second types of resource areas in 2016 will be reduced by 10 cents and 7 cents respectively, and the three types of resource zones will be reduced by 2 cents. The photovoltaic power generation project that was filed before 2016 and included in the annual scale management but not yet fully put into operation before June 30, 2016, will implement the 2016 benchmarking price.
Affected by this, in the first half of the year, there was a wave of photovoltaic power plant rushing in China. According to the statistics of the National Energy Administration, in the first quarter of this year, China's cumulative photovoltaic power generation capacity reached 50.3 GW, an increase of 52%. Among them, photovoltaic power station 43.3 GW, distributed photovoltaic 7 GW. Among them, the installed capacity of new photovoltaic power generation in the country reached 7.1GW, an increase of 42% year-on-year, close to half of the annual PV installed capacity in 2015.
However, after the end of the wave of rushing, the entire market has recently been a tragic talk: poor order visibility, inventory backlog, and overall price decline.
Institutional survey statistics, battery quotations plunged, some manufacturers even began to accept orders below the price of 0.275 US dollars per watt, rewriting the historical low; and the price of silicon wafers also fell to 0.8 US dollars per piece, and even approached the new low of 0.78 US dollars.
“After '6·30', the demand in the photovoltaic market is rapidly weakening, coupled with the oversupply caused by the upstream capacity expansion that began in the fourth quarter of 2015. In fact, the wafers, cells and components upstream of the industrial chain The price drop has actually started in May," Yuan Quan, general manager of the marketing department of Sumeda Energy Holdings Co., Ltd., told the China Industry News that the price of the upstream "basin" should appear in the third quarter.
As for the downstream of the industrial chain, his view is that after “6·30”, more provinces will allocate indicators through the bidding model; developers and EPCs will reshuffle, among which small and medium-sized developers and EPC will gradually withdraw from the market. The distribution of power stations will be more concentrated in the eastern region where local consumption can be ensured, and each company will also pour more resources into the distributed business, making the industry approach the eve of the full-scale outbreak of distributed services.
"In any case, the gradual reduction or even elimination of subsidies for photovoltaic power generation is an inevitable trend of industrial development. Only in this way can the cost of photovoltaic power generation be further reduced, and the photovoltaics will be more widely used and promoted," he stressed.

The rules of the game have changed. "On June 30, some people regard it as the limit, and some people are relieved. Before '6·30' we were busy building the grid. What will we do after '6·30'?" On special days, Li Xiande, Chairman of Jinko Energy Co., Ltd. has the above poetic expression.
In his view, this day is not so terrible. As for the overcapacity and component price declines that follow, “these things will happen even if there is no '6·30',” any country will adjust due to a major subsidy policy. And after a wave of rushing, after that, demand will return to normal, but the market will not suddenly disappear.
For example, he said that due to problems such as grid reconstruction speed and land resources, many countries will shift from encouraging centralized ground power stations to distributed, but they will also shift from distributed to centralized because of changes in the country's demand for clean electricity, such as Japan. .
"Since everyone thinks that it is necessary to eliminate inferior production capacity through industrial upgrading and avoid bad money and good money. Since everyone believes that the most important feature of photovoltaic is that it is most suitable for distributed development, then what is the fear?! After all, the rules of the game have changed. Li Xiande analyzed for the China Industry News reporter: First, the base of the front runners will be more and more, the leader component will be in short supply, and the energy production will be the competition point of photovoltaic products;
Second, costs, especially capital costs, will become the core competitiveness of power station investors. Central enterprises, state-owned enterprises, and listed companies that can obtain low-cost funds through additional issuance will gain pedigree advantage in electricity price competition;
Third, the distribution started on the road, but the distributed problem is still not well solved;
Fourth, photovoltaic poverty alleviation is a way out, but it can also face challenges such as site, land, and grid connection, as well as local officials with mixed conditions.
“The new policy may have a huge impact on the industry, but the way to find the answer is to take yourself out of a single small point, face the law of natural selection, understand what happened, and propose changes correctly. Plan.” He told China Industry News that in the past, companies and rivals had higher capacity, shipments, and gross profit margins; but in the future, they are more about the perception, adaptability, and mobility of market changes.
“This is not just a matter of the sales department, the development department or the engineering department, but the awareness that the company has to go up and down. All PV practitioners must learn, adapt, and control it, and finally find opportunities in the challenge.” According to Li Xiande, 2016 is not a black swan, but it will not be gray and empty.

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