After the bleak photovoltaic industry broke out

On the evening of December 12, China’s listed photovoltaic concept stocks in the United States ushered in an explosion. LDK (NYSE:LDK), Trina Solar (NYSE:TSL), Yanhui Solar Energy (NYSE:SOL) and other intraday gains all surpassed 25%, among which Yanhui Solar Energy continued to soar in the late afternoon and eventually closed up. 31.69%. On the Hong Kong stock market, GCL-Poly (HK3800) soared 11.9% on the same day... China's photovoltaic listed companies swept away before they lost their breath, playing a beautiful turnaround in the U.S. stock market, allowing observers to hold pessimistic views on Chinese PV. Can not help but begin to re-measure the future of China's photovoltaic industry.

The reason for the dramatic explosion of the photovoltaic concept stocks on the evening of the 12th was mainly due to the previous bleakness... It can be said that since 2011, China's photovoltaic industry has entered a disaster year. On November 9, 2012, the U.S. Department of Commerce officially issued an announcement announcing that it will launch anti-dumping and countervailing investigations on China's solar battery shipments to the United States. This is the first time that the United States has launched a "double counter" investigation on China's clean energy products. The "Double-Country" survey involves as many as 75 Chinese PV companies, and it has completely eliminated a certain number of PV companies in China.

Earlier, the European Union had just announced a list of responding companies for China's PV "double reverse" investigation. China's photovoltaic industry has successively encountered the "double reverse" investigations of the United States and the European Union. The intention behind this is not only because the development of China's photovoltaic industry has already reached the domestic photovoltaic industry of relevant developed countries, but reflects a deeper problem that is the economic growth between countries in the future. In the new field, the competition for development dominance is becoming increasingly fierce.

Anyone who knows China's photovoltaic industry knows that Europe accounts for 70% of the global photovoltaic market and is also the main area for China's PV products. According to data from the Ministry of Commerce, in 2011, the export volume of China's photovoltaic cells to the EU was US$20.4 billion, which accounted for about 73% of the total exports of this product during the same period. Affected by the superposition of global overcapacity and industrial development into the adjustment and transformation period, once the EU imposes a high anti-dumping tax, China's large number of photovoltaic companies will face bankruptcy, and about 300,000 employees will be severely impacted. Coupled with the United States' "double opposition" to China, China will have 1 million photovoltaic workers affected, and even have the danger of a business.

How will the Chinese government and the Chinese PV industry respond to this change? It is to sit still and wait to see whether it is production or self-help, or another way. The eyes of the whole world are staring at the Chinese government and China's photovoltaic industry.

China's photovoltaic industry ushered in warm weather during the harsh winter season. “The Central Government, the State Councilor and the Secretary-General of the State Council* visited Wuxi Suntech Power.” At 3:00 pm on December 7, the website of Wuxi Suntech Power Co., Ltd. hangs this short message. ** Held a symposium on photovoltaic industry development in Wuxi, and jointly with several ministries and commissions investigated several well-known PV companies including Jiangsu Zhongneng Silicon, Xuzhou GCL Solar, Changzhou Trina Solar and Wuxi Suntech.

During the investigation, relevant persons from various ministries and commissions made special reports. A series of supportive policies were launched involving multiple departments, from financial subsidies to grid access, from foreign aid expansion to credit support, and a package of policies eventually cleared the obstacles. According to sources close to the top, various ministries and commissions have been asked to submit specific plans. It is expected that the plan will be supported in the near future and will be introduced in the name of the State Council in the future.

Before the investigation of Wuxi Suntech, Premier Wen Jiabao presided over the executive meeting of the State Council on December 19 to study and determine the policies and measures to promote the healthy development of the photovoltaic industry. For the first time, it proposed to establish the sub-regional benchmark price for photovoltaic power stations and strictly control it. Newly expanded production capacity for polysilicon, photovoltaic cells and components, reduced government intervention, and banned local protection. The aforementioned New Deal is undoubtedly of great material interest for photovoltaic companies in the winter. In particular, the issue of “one size fits all” of on-grid electricity prices can be solved and the development of power stations will benefit the first. And it is worth noting that the State Council stressed that the market "forces" mechanism, with less government intervention, industry reshuffle may further accelerate.

The State Council meeting held that as a strategic emerging industry, China's photovoltaic industry has developed rapidly in recent years and a relatively complete photovoltaic manufacturing industry system has formed. The current major problems are: a serious overcapacity, over-reliance on external demand, and general business difficulties. These difficulties are both a serious challenge to the development of the industry and an opportunity to promote industrial adjustment and upgrading. In particular, the cost of photovoltaic power generation has dropped significantly, providing favorable conditions for expanding the domestic market. In accordance with the ideas of innovation in institutional mechanisms, improvement of policies and measures, expansion of consumer markets, regulation of market order, promotion of industrial restructuring, and reduction of the cost of power generation, we must make overall plans and take comprehensive measures to improve our industrial competitiveness.

The State Council meeting has determined a series of policy measures, such as accelerating industrial restructuring and technological progress. We will make good use of the market's "forced mechanism" to encourage mergers and acquisitions, eliminate backward production capacity, and improve the level of technology and equipment. Strictly control the new polysilicon, photovoltaic cell and component projects that simply increase production capacity. Regulate the order of industrial development. Strengthen the coordination of photovoltaic power generation planning and supporting power grid planning, and establish a simple and efficient grid-connected service system. Establish and improve a system of technical standards, strengthen market supervision, and implement compulsory inspection and certification systems for key equipment. Actively develop the domestic market for photovoltaic applications. Efforts will be made to promote distributed photovoltaic power generation, encourage units, communities and families to install and use photovoltaic power generation systems, and promote the construction of photovoltaic power plants in an orderly manner. Strengthen international cooperation and consolidate and expand the international market. Improve support policies. According to the resource conditions, the sub-regional benchmark price for photovoltaic power stations will be established, and the distributed photovoltaic power generation will be subject to the subsidy policy, and the on-grid tariffs and subsidy standards will be reasonably reduced according to the changes in costs. Improve the mechanism of central government finance to support the development of photovoltaics. The photovoltaic power station project implements the same VAT preferential policies as wind power. Give full play to the role of the market mechanism, reduce government intervention, and prohibit local protection. We will improve the pricing mechanism for electricity pricing and the evaluation mechanism for the effectiveness of subsidies to improve the policy effect. Play the role of industry organizations, strengthen industry self-discipline, and guide the healthy development of the industry. The meeting requested all relevant departments to quickly formulate and improve supporting policies to ensure that they are in place.

These good news have undoubtedly played an important role in the recovery of China's photovoltaic industry. In addition, another heavy profit was re-introduced: In July, the National Energy Administration released the “12th Five-Year Plan for the Development of Solar Power Generation,” and proposed a number of measures to promote distributed solar photovoltaic power generation; in September, the National Energy Administration issued “ With regard to the notification of the application of distributed photovoltaic power generation scale application demonstration area, it is planned to vigorously build a new energy demonstration project. The high level has already increased the total installed capacity of photovoltaic power generation in the 12th Five-Year Plan for Renewable Energy Development, and the maximum limit may be 40GW. This is undoubtedly a life-saving news for the photovoltaic industry.

The introduction of these policies will immediately make the market react and will promote the recovery of photovoltaic power generation, especially the entire photovoltaic industry chain. It was the good news from the State Council that the New Deal of the photovoltaic industry was good news, and the National Energy Board's upgrading of the total installed capacity of photovoltaic power had led to a strong performance in the photovoltaic sector, and many stocks appeared to be in an upward trend.