Current situation and prospect of photovoltaic power generation in China

As can be seen from this figure, in recent years, China's photovoltaic power plant investment cost is generally a downward trend, 2021 due to the price fluctuations of the industrial chain, system costs and module prices have risen for the first time, the average price of photovoltaic modules is about 1.93 yuan per watt, an increase of 23%, module costs accounted for about 46% of the total investment cost. For example, one of the most important components, the cost of centralized photovoltaic power stations per kilowatt is 4150 yuan, an increase of 4%. The cost of distributed photovoltaic power station per kilowatt is about 3140 yuan, an increase of about 11%.

The third part: the photovoltaic industry is facing the situation and development trend

In the face of the situation, in 2021, driven by the goal of carbon peak carbon neutrality, China's photovoltaic power generation ushered in a major development opportunity period, the scale of new development reached a record high, new projects fully realized affordable Internet access, power generation utilization rate maintained a high level, equipment manufacturing scale and technical level continued to progress.

First, the situation facing the photovoltaic industry:

(a) the national major strategic goals, for the development of the photovoltaic industry to provide broad prospects, is carbon peak carbon neutral proposed, the state has formulated a series of policies, to build a complete policy system. In October 2021, the Central Committee of the Communist Party of China and The State Council issued opinions on the complete, accurate and comprehensive implementation of the new development concept and the work of carbon peak carbon neutrality. The State Council issued a notice on the issuance of the 2030 carbon peak action plan, which is what we said, the National development 23 document, focusing on the construction of carbon peak carbon neutral a policy system, clearly proposed that by 2030 the total installed capacity of wind and solar power generation reached more than 1.2 billion kilowatts, and proposed energy green low-carbon transformation actions. In 2021, the Central Economic Work Conference also proposed that new renewable energy consumption is not included in the total energy consumption control, the country is also formulating new documents in the implementation, with the in-depth promotion of carbon peak carbon neutral goal, we believe that the photovoltaic industry will usher in a longer period of development opportunities.

(2) The coordination mechanism between photovoltaic power generation planning and territorial space, land ecological function protection, and power grid planning needs to be established urgently. After the double carbon goal is proposed, it is required to vigorously develop new energy, but also put forward higher requirements for basic ecological construction goals such as forest storage capacity, and the policy standards for photovoltaic project development and construction land are more stringent. In addition, after 2022, we believe that China's photovoltaic industry will continue to maintain a rapid development trend. Large-scale, high proportion of new energy access to the grid will greatly increase the operation and absorption pressure of the system, the need to coordinate the top-level design level of photovoltaic power generation, territorial space, land ecological function protection, power grid absorption and other development plans, to achieve a multi-regulatory, build a new system, to ensure the better and faster development of the photovoltaic industry.

(3) Photovoltaic power generation is still facing challenges in market trading. At present, new energy such as photovoltaic power generation has gradually participated in electricity market trading through green electricity trading pilot and spot trading. In January this year, the state issued the "Guidance on accelerating the construction of a national unified electricity market system" proposed that by 2030, the national unified electricity market system should be basically completed, clearly saying that new energy fully participate in market trading, with the gradual deepening of the reform of the power system, photovoltaic power generation and other new energy to participate in market trading is definitely the trend of The Times. Photovoltaic power generation has volatility and intermittenity, and compared with traditional power sources with adjustment capabilities, such as thermal power and hydropower, it requires additional self-built (purchased) system peaking resources or directly bears higher credit costs. At the same time, the electricity price of new energy participating in the electricity market will change greatly from the original guarantee purchase, which will also have a great impact on their earnings, and they may face great pressure to participate in market-oriented transactions.

(4) The short-term fluctuation risk of photovoltaic power generation development income. With the gradual release of silicon production capacity in the middle of 2019, the supply of silicon will increase significantly by the second half of 2022, and the mismatch between industrial supply and demand is expected to be alleviated. In addition, many provinces put forward photovoltaic power generation projects that are included in the scale of the guaranteed power grid, and also require a certain proportion of energy storage devices, land costs, non-technical cost financing, and power grid delivery are difficult to effectively reduce in the short term, and photovoltaic project investment income faces short-term volatility risks.