UBS: Photovoltaic welcomes growth inflection point and is optimistic about upstream polysilicon production

First, the installed target exceeded expectations. In July this year, the National Energy Administration announced the PV installation plan during the 13th Five-Year Plan period. The 2020 PV installation target is about 225GW, which includes 60GW of distributed targets and 15GW of PV poverty alleviation projects. This is about 150GW of ground power plants, including the "leaders" program, which is significantly higher than expected.

Second, the cost of photovoltaic power generation is falling very fast. Through continuous PV manufacturing cost reduction and conversion efficiency improvement, it is expected that in 2017-2018, PV will achieve user-side parity online in advance (ie, PV on-grid price is lower than the price of electricity sold), and by 2020, it will achieve parity on the power generation side (ie, The PV on-grid price is lower than the thermal power on-grid price). Affordable Internet access is one of the main factors driving the growth of PV demand.

According to the survey, after the “6.30” rush period in 2017, the PV demand and the average product price in July did not appear to have experienced a significant decline in the market. The price of polysilicon even increased slightly. The orders of major PV manufacturers have been filled up to 9 month. UBS expects that the new installed capacity of domestic PV will increase to 14-16GW in the second half of 2016, which is expected to boost the installed capacity of nearly 40GW.

Liu Shuai believes that in the photovoltaic industry chain, the current optimistic is the upstream link, including the production of polysilicon and silicon wafers. This entry barrier is relatively high, and after several years of integration, there are currently only about 10 global first-tier manufacturers in production, which provides these companies with a relatively stable market share and gross profit level. Second, it is the mid-stream battery component manufacturing industry. "We are optimistic about the long-term development of downstream power stations, but in the short term, we are under pressure from cash flow, including subsidy payments and arrears."