"In 2019, the newly connected photovoltaic capacity is expected to reach 40-45GW." Although "from January to March 2019, the newly connected photovoltaic capacity nationwide decreased by 46% year-on-year, reaching 5.2GW , under clear policy expectations, the monthly new installation volume will be restarted first through distributed photovoltaics by the end of the second quarter," Tao Ye said.
The above analysis comes from a speech entitled "Deduction of the New Cycle of Photovoltaic Landscape, Policies and Development Trends". On April 18, 2019, a seminar on the reliability and economic analysis of technical solutions for grid parity photovoltaic power generation projects was held in Beijing. Tao Ye, deputy director of the Energy Research Institute of the National Development and Reform Commission/National Renewable Energy Center, attended the meeting and delivered this speech.
At the meeting, Tao Ye believed that solar and wind power have become the preferred choices for the development of renewable energy in the world, and that global grid parity for wind and solar power is just around the corner. Due to the significant drop in component costs and the improvement in efficiency, the levelized cost of electricity (LCOE) for onshore wind power and photovoltaic power generation has decreased by 67% and 86%, respectively.
In addition, regarding the current subsidy gap, Tao Ye stated that increasing the electricity price surcharge/transferring other funding sources remains an important but challenging measure to address the accumulated subsidy funding gap. Based on a 3-cent surcharge, the increased revenue from the electricity price surcharge could reach 50 billion yuan/year in 2020 and 52 billion yuan/year in 2021.
According to Tao Ye, promoting grid parity for photovoltaic power will be a clear trend in the industry's development in 2019. However, one quarter of 2019 has already passed. What has been the industry's development trend in the past three months? How have domestic and international markets performed? Are the conditions for grid parity sufficient? Based on information provided by the China Photovoltaic Industry Association, the following summary is provided for readers' reference:
The industry as a whole performed well in the first quarter.
In January and February 2019, China's domestic polysilicon production totaled 51,600 tons, a year-on-year increase of 8.2 %. February's production was particularly strong, setting a new record of 26,100 tons, a month - on-month increase of 2.4 %. Statistics show that the increase in February mainly came from the release of new production capacity, including from factories such as Xinjiang GCL, Xinjiang Daquan, Inner Mongolia Tongwei, and East Hope.
In January and February 2019, China's module production reached approximately 11.8 GW, a year-on-year increase of 47.5 %. The industry's average capacity utilization rate was around 51%. However, the industry was highly concentrated, with major companies operating at full capacity since the fourth quarter of 2018. Some leading companies had their orders fully booked for the first half of 2019.
In terms of product prices, prices remained generally stable in the first quarter. Domestic polysilicon prices saw a slight rebound in January and February 2019 , falling from 72,100 yuan/ton at the beginning of the year to 70,400 yuan/ton at the end of February , a decrease of 2.4%. However, silicon wafer and cell prices rose slightly. Silicon wafer prices increased from 2.12 yuan/piece at the beginning of January to 2.15 yuan/piece at the end of February, an increase of 1.5 %; cell prices rose from 0.82 yuan/W at the beginning of January to 0.85 yuan/W, an increase of 4.8 %. Module prices fell sharply, from 1.71 yuan/W at the beginning of January to 1.68 yuan/W, a decrease of 1.4 %.
Encouragingly, the pace of technological progress in the photovoltaic industry in 2019 exceeded expectations. Tao Ye, Deputy Director, stated at the conference that the industry had the potential to reduce unit investment by 0.5 yuan/watt in 2019, and improvements in module technology and efficiency were expected to increase by 0.2-0.5 percentage points annually. Simultaneously, we improved production technology, made balancing and communication monitoring systems more advanced, and optimized power plant design.
The industry is eagerly awaiting policy changes, but the domestic market is experiencing a downturn amid hesitation.
As the first quarter of 2019 drew to a close, relevant policies were still in the opinion-gathering stage. The uncertainty surrounding electricity pricing policies and power generation project construction management policies caused market hesitation, directly leading to sluggish demand in the photovoltaic application market during the first quarter.
In January and February 2019, China's newly installed photovoltaic power generation capacity was approximately 4.52 GW, a year-on-year decrease of 47%. Even if the policy is successfully implemented, the organization of bidding and tendering for projects in various provinces, the reporting and ranking across the country, and the preliminary preparations for enterprise projects all require time. It is expected that the possibility of new demand in the second quarter is not high.
In terms of installed capacity, from January to February, 1.97GW of centralized photovoltaic power plants and 2.55GW of distributed power plants were newly added. Although the proportion of distributed power plants exceeded 50% (56%), it decreased by 63% compared with the same period last year.
Overseas markets are booming, and photovoltaic exports have increased significantly.
Driven by the rapid decline in photovoltaic product prices, Chinese photovoltaic companies have gained increasingly stronger cost competitiveness in the international market. This has fueled the rise of emerging photovoltaic markets and the recovery of traditional European markets. Furthermore, the first quarter marks the end of the fiscal year for countries such as India, Japan, and the UK, leading to a rush to install photovoltaic systems and driving rapid growth in my country's photovoltaic exports.
In January and February 2019, China's photovoltaic (PV) cell exports reached US$ 170 million, with an export volume of 1.3 GW, representing a year-on-year increase of 2.1 %. PV module exports reached US$2.4 billion, with an export volume of 10 GW, representing a year-on-year increase of 21.9 %. Both cell and module exports saw growth exceeding 80%. Notably, PV module exports accounted for 85% of total module production, an increase of approximately 25 percentage points compared to the same period last year, indicating that overseas markets were the primary driver of PV industry shipments in the first quarter.
Furthermore, among the photovoltaic companies that maintained full production in the first quarter, approximately 90% of their orders came from overseas.
Although overseas markets were booming in 2019, the recent patent lawsuit filed by Hanwha against major Chinese photovoltaic companies has created obstacles for photovoltaic companies to enter the international market. Chinese photovoltaic companies will inevitably be affected in the US market in 2019.
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