Photovoltaic: Diverse technological iterations, focusing on emerging technologies such as copper electroplating and perovskite

Review: Mismatch between supply and demand of silicon materials, resulting in a significant increase in prices

The price of silicon materials has significantly increased in 2021. The main reason is that the expansion cycle of silicon materials is long (1.5-2 years) and the capacity elasticity is low, while the expansion cycle of silicon wafers, modules, and solar cells is short (3-6 months) and the capacity elasticity is high, resulting in a mismatch between supply and demand of silicon materials and a significant increase in prices. The price increase of silicon materials is the largest, while the price increase of silicon wafers, solar cells, and components is significantly smaller than that of silicon materials. According to the Comprehensive Price Index (SPI) of the photovoltaic industry, in 2021, polysilicon prices increased by 143%, silicon wafers by 54%, solar cells by 35%, and modules by 9%.

Review: The price of silicon materials has risen, putting pressure on the profitability of downstream links in the photovoltaic industry chain

The rise in silicon material prices has compressed the profit margins of battery cells and components. The main cost component of downstream solar cells and components is silicon materials, which have a better competitive landscape and stronger bargaining power.

Silicon material is the main cost component of downstream silicon wafers, solar cells, and components. Silicon materials account for 86% of the cost of silicon wafers, 74% of the cost of solar cells, and 61% of the cost of modules.

Silicon materials have a higher concentration and stronger bargaining power. In terms of production capacity, the silicon material CR5 reaches 85%, the battery cell CR5 is only 58%, and the component CR5 is 61%.

Outlook: The price of silicon materials has peaked and fallen, and the profitability of battery cells and components is expected to improve

Outlook for the future: Silicon material prices have peaked and fallen, and profits in the middle and lower reaches of the industry chain are expected to improve. New production capacity is gradually being released, and silicon material prices have peaked and fallen: With domestic silicon material enterprises increasing their expansion pace, the supply and demand pattern of silicon materials is gradually improving. At the end of November 2022, silicon material prices peaked and fell, and a downward channel has been opened. Profitability of battery cells and components is expected to improve: upstream silicon material prices have decreased, and industry chain profits are shifting towards battery cells and components. In addition, the concentration of the battery cell and component industry has increased, and the bargaining power has correspondingly improved, which is expected to fully absorb the benefits brought by the price reduction of silicon materials.

Outlook: Price reduction of silicon materials will stimulate terminal installed capacity and boost demand for photovoltaic equipment

Since November 2022, the price of silicon materials has peaked and fallen, with prices of silicon wafers, solar cells, and components all decreasing. According to PVInfoLink data, on December 14, 2022, the average price of polycrystalline silicon was 277 yuan/kg, which is 8.58% higher than the highest point this year; The prices of silicon wafers 210, 182, and 166 are 8.10 yuan/piece, 6.15 yuan/piece, and 5.60 yuan/piece, respectively, which are 19.08%, 18.87%, and -11.25% higher than the highest point this year. The prices of 210, 182, and 166 battery cells are 1.22 yuan/watt, 1.23 yuan/watt, and 1.2 yuan/watt, respectively, which are -8.96%, -8.89%, and -8.40% higher than the highest point this year; The average price of components is 1.93 yuan/watt, which is 2.53% higher than the highest point this year.

The high prosperity of photovoltaics continues, and CPIA has raised its installed capacity expectations. According to CPIA data, the global photovoltaic installed capacity increased by 170GW in 2021, far exceeding the 40GW in 2020. In addition, the costs of various links in the photovoltaic industry will continue to decline, which is conducive to the rapid development of the photovoltaic market. In December 2022, CPIA raised its forecast for both domestic and global new installed capacity by 10GW, resulting in a global new installed capacity of 205-250GW and a domestic new installed capacity of 85-100GW for 2022

The price reduction of silicon materials stimulates the installed capacity of terminals, and the increase in installed capacity drives the expansion of battery cells and components, boosting the demand for photovoltaic equipment. We expect the global new installed capacity of photovoltaics to reach 330-370GW in 2023, and the domestic new installed capacity to reach 130-150GW. This will drive the expansion of solar cell and module production and boost the demand for photovoltaic equipment.

Wind power: Focusing on 0-1 new technologies in the context of deflation, paying attention to“ Sliding and rolling; And offshore wind power

The era of wind power parity has arrived; The 14th Five Year Plan; The installed capacity is expected to steadily increase

The price of wind turbines has dropped significantly, and the competitiveness of wind power continues to strengthen. In 2021, China's onshore wind power officially entered the era of subsidy free parity, and after years of cost reduction, onshore wind power has met the conditions for parity. According to IRENA data, the average cost per kilowatt hour of global onshore wind power and offshore wind power decreased by 65.7%/61.7% respectively from 2011 to 2021, of which onshore wind power has exceeded hydropower as the clean energy with the lowest cost per kilowatt hour. As the first year of onshore wind power parity in China in 2021, the price of wind turbines has continued to decline after the rush for installation. In September 2022, the average bidding price in the market has dropped from 1808 yuan/kW, a year-on-year decrease of 24.7%. The decrease in wind turbine prices will further enhance the attractiveness of wind farm investment.

According to CWEA data, China's newly installed wind power capacity in 2021 was 55.92GW, a year-on-year increase of 2.7%, with a cumulative installed capacity of 346.67GW. Among them, onshore wind power added 41.44GW, a year-on-year decrease of 18.1%, and offshore wind power added 14.48GW, a year-on-year increase of 276.6%. The proportion of newly installed offshore wind power capacity in 2021 reached 25.9%, an increase of 25.2pct compared to 2010. According to the "14th Five Year Plan" issued by the National Development and Reform Commission and other departments in June 2022; The goals of the Renewable Energy Development Plan; The 14th Five Year Plan; During this period, renewable energy accounted for over 50% of the incremental energy consumption, and wind and solar power generation doubled. Therefore; The 14th Five Year Plan; During this period, the installed capacity of wind power is expected to steadily increase.

The bidding volume will increase significantly in 2022, and 2023 may be a big year for wind power installation

Wind power installed capacity is expected to increase significantly in 2023, ushering in an upward cycle of prosperity. From the perspective of open bidding in the market, a total of 76.3GW of wind power was tendered in the first three quarters of 2022, a significant increase of 82.5% compared to the same period last year. Among them, onshore wind power bidding is 40