Photovoltaic module quotation “chaos” starts

 Currently, no quotation can reflect the mainstream price level of solar panels. When the price difference of large-scale investors’ centralized procurement ranges from 1.5x RMB/watt to nearly 1.8 RMB/watt, the mainstream price of the photovoltaic industry is also changing at any time.

 

Recently, pv experts have learned that although most of the centralized procurement quotations for photovoltaic modules are still maintained at 1.65 RMB/watt or even around 1.7 RMB/watt, in actual pricing, most investment companies will use multiple rounds of price negotiations with modules. Manufacturers renegotiate prices. PV experts learned that a certain first-tier module manufacturer even has a transaction price of 1.6 RMB/watt, while some second- and third-tier module manufacturers can even offer a low price of 1.5X RMB/watt.

 

From the end of 2022, the module segment will enter a stage of intense price competition. Although the price of polysilicon continued to stalemate or even rose slightly after the Spring Festival, it still cannot change the downward trend of the price of the industrial chain. Since then, the price competition in various links has started.

 

On the one hand, it can be seen from the opening of large-scale centralized procurement bids this year that the number of component companies has increased significantly, and some bidding companies have reached as many as 50 companies, and several new component brands have emerged, frequently winning orders from central enterprises with low-price strategies; on the other hand On the one hand, the magnitude of the module segment is severely differentiated. From the 2022 module shipment ranking released by Infolink a few days ago, it can be seen that the shipments of TOP4 module manufacturers are far ahead, all exceeding 40GW. However, with the increase of new entrants, the shipment of modules The pressure is also becoming more and more obvious. In the case of sufficient production capacity supply, the competition in the component sector is more reflected in the price, which is also the root cause of the current “chaos” in the industry’s quotations.

 

According to feedback from the industry, “The current quotations should be comprehensively judged based on the project location, project progress, and even the past project completion status of the project leader. Even the quotations given by the same company for different projects are not the same. Enterprises and enterprises The quotation difference between them is even more different. High prices are mostly to maintain reasonable profits, while low quotations are the main way for some companies to seize orders. If there is any change in the supply chain, the general strategy adopted by companies is to slow down The supply cycle is delayed until the upstream price is reduced before supplying.”

 

In fact, the price difference of components can also be glimpsed from the centralized procurement of central enterprises. Since the first quarter, State Power Investment Corporation, Huaneng, Huadian, China National Nuclear Corporation, China Energy Conservation and other state-owned enterprises have successively completed over 78GW of module bidding work. Judging from the overall average quotation of bidding enterprises, the module price has been around 1.7+ RMB/watt Gradually dropped to the current 1.65 RMB / watt or so.

 

 

 

Although the price is showing a downward trend, the price difference between the high and low prices of enterprises has slowed down from about 0.3 RMB/watt to about 0.12 RMB/watt, and then rose to the current 0.25 RMB/watt. For example, recently, Xinhua Hydro’s 4GW module bid opening price, the lowest price was 1.55 RMB/watt, and the highest price reached 1.77 RMB/watt, with a price difference of more than 20 cents. The trend is relatively consistent with the prices of PetroChina’s 8GW modules and CECEP’s 2GW modules.

 

Judging from the overall quotations this year, head component companies rely on their brand advantages to offer relatively high quotations, which are basically kept above the average bid prices of central enterprises. In order to grab orders, second- and third-tier component companies take advantage of the decline in industry prices, and component quotations are relatively relatively high. Radical, the lowest quotations of all central enterprises come from second- and third-tier component companies. Especially as the number of component companies continues to increase, the phenomenon of “price” chaos has become more and more obvious. For example, China Power Construction’s 26GW component bidding, with nearly 50 participating companies, has a component price difference of more than 0.35 RMB/watt.

 

Compared with the ground power station, the price in the distributed photovoltaic market is slightly higher. Some distributors told photovoltaic companies that the current purchase price of a head component company has reached more than 1.7 RMB/watt, while the previous implementation price was about 1.65 RMB/watt , if you cannot accept the price increase of components, you need to wait until May to execute at the price of 1.65 RMB/watt.

 

In fact, the photovoltaic industry has experienced confusion in component quotations during the downward cycle of industrial prices.  At the beginning of 2020, as the price of silicon materials continued to drop, the bidding of central enterprises continued to start in the first quarter. At that time, the lowest quotation in the industry reached around 1.45 RMB/watt, while the high price remained at around 1.6 RMB/watt. Under the current situation, second- and third-tier component companies have entered the list of central enterprises with low prices.

 

The price melee after the start of the current round of price cuts is still initiated by second- and third-tier companies. Head component companies have a brand advantage and hope to reasonably expand the profit margin of the component side. Although the quotation is relatively high, due to the previous cooperation with the central state-owned enterprises, the corresponding products can dispel the reliability concerns of the central state-owned enterprises. In order to compete for orders and squeeze into the short list, second- and third-tier companies also ushered in the corresponding market with low quotations. Some power station investors said, “The quality of the components of second- and third-tier enterprises may have to be verified by the market, but the overall return rate of power station investment based on product prices is almost the same.”

 

The chaotic battle of component prices is closely related to the game between the upstream and downstream industries. In Infolink’s view, the price of silicon materials will still maintain a downward trend for a long time, but the price of silicon wafers has not been significantly loosened due to the production problem, but it has reached the peak of this round of price fluctuations, and the adjustment of the price of silicon wafers with silicon wafers is also expected to usher in down cycle. The short-term confusion of module prices does not hinder the general trend of price cuts throughout the year, and this will also favorably support the downstream installation demand of photovoltaics this year.

 

What is clear is that all sectors of the industry are still competing for the right to speak about pricing, which is one of the reasons for the large price difference. However, the continuous fluctuation of prices will undoubtedly bring troubles to large-scale centralized procurement and bidding. Subsequent supply risks should be properly assessed.