Electronic Enthusiasts Network reported (text/Huang Shanming) Recently, Fortune magazine, a subsidiary of Warner, announced the top 500 Chinese companies in 2022, including 82 energy companies and 13 photovoltaic companies on the list. According to the data of the National Energy Administration, my country's photovoltaic power generation in 2021 will be 325.9 billion kW/h, a year-on-year increase of 25.1%, accounting for 3.9% of the total power generation. Continue to rank first in the world.

However, in the past few days, Trina Solar and JinkoSolar, the leaders of 100 billion photovoltaic modules in China, have successively received announcements of international lawsuits. Coincidentally, these two lawsuits are related to the supply of photovoltaic modules. At the moment when China's photovoltaic industry is booming, the overseas leaders of photovoltaics are being sued, which also casts a haze on the entire industry.

China's photovoltaic leader was sued overseas and was targeted by the US WRO. With the establishment of the global carbon neutrality trend, the advantages of photovoltaic power generation have become more and more prominent, and solar energy has become the most important renewable energy at present. As early as the 1950s, China has begun to study photovoltaic power generation technology. However, considering the cost and technology of photovoltaics at that time, photovoltaics were mainly used in the aerospace field.

In the 1990s, driven by developed countries dominated by Europe, America and Japan, the global photovoltaic industry ushered in a period of rapid development. In 2013, the national photovoltaic power generation was only 9.1 billion kWh, but in 2019, the photovoltaic power generation has reached 223.8 billion kWh, an increase of 23.6 times. So far, China has begun to gradually replace Europe and become the world's largest photovoltaic installed capacity market.

Trina Solar, JinkoSolar, etc. are all photovoltaic module companies founded in the late 20th century and early 21st century. At present, the market value of both companies is around 180 billion yuan, and the scale of module shipments ranks among the top in the world. But in recent days, these two companies have been complained by overseas companies one after another.

According to Trina Solar's announcement, its U.S. subsidiary Trina Solar (US), Inc. (hereinafter referred to as Trina Solar) has received a subpoena and complaint from the Supreme Court of California regarding the lawsuit brought by Total Energy and other plaintiffs. and other related materials.

According to the announcement, the reason for the lawsuit is that Total Energy signed a module contract worth US$300 million with Tianhe USA in July 2021, and had paid an advance payment of US$8.75 million, agreed to start in February 2022. Delivery until December 2022.

Later, due to the anti-circumvention investigation initiated by the U.S. Department of Commerce and the Department of Homeland Security and related policy changes, the situation background of the original agreement was significantly changed, triggering the two parties to renegotiate the new delivery conditions, but no new change agreement was reached. . Total Energy recently filed a civil complaint with the court, claiming that it has not received the module products. Total Energy wants to order Tianhe US to pay compensation, but the exact amount is unclear. Judging from the materials currently prosecuted by Total Energy, the total loss is about 200 million US dollars.

According to JinkoSolar's announcement, the company has received a notice that the International Court of Arbitration of the International Chamber of Commerce has accepted the arbitration request filed by the applicant SWFZE against the company for disputes related to the "Module Supply Contract". The Indian company wants JinkoSolar to pay a total of $326 million in compensation.

However, JinkoSolar stated that according to the opinion of the arbitration lawyer hired by the company, the applicant SW FZE has not provided sufficient evidence to prove that JinkoSolar has violated the obligations under the Module Supply Contract and the quality assurance documents, nor has it stated its claim for compensation. The specific calculation method of the amount, so the relevant compensation claims made by it obviously lack basis; based on this, the possibility of the arbitration claim being supported is very low.

The reason why these companies were sued for breach of contract was predicted to be related to the US WRO policy. At the end of 2021, the U.S. Customs has successively seized domestically exported module products to the United States in accordance with the WRO policy, which has also increased the operating costs of relevant manufacturers, which is also the direct reason for Trina Solar’s ​​lawsuit.

The so-called WRO policy, commonly known as the U.S. withholding order, is enforced by the U.S. Customs and Border Protection and refers to the hedging strategy of forced labor solar project module procurement contracts. Once the United States believes that the company uses forced labor to produce, manufacture or mine, it will use the WRO policy to withhold the company's products until the company provides relevant evidence to prove that it does not have the behavior regulated in the WRO.

Since last year, many Chinese photovoltaic companies have been subject to the temporary withholding of goods by the United States on the grounds of the WRO policy. For example, in June 2021, U.S. Customs and Border Protection enforced a WRO on Hesheng Silicon, prohibiting the import of silicon metal from the company and its subsidiaries or goods and solar products derived or produced using the company’s silicon materials.

In August of the same year, the solar modules of Chinese photovoltaic manufacturers such as JinkoSolar, Trina Solar and Canadian Solar were successively detained. At the end of October, LONGi Green Energy and its U.S. subsidiary were also under the control of the WRO. Zhong Baoshen, chairman of LONGi Green Energy, once said that the US WRO poses a great challenge to the company, and the demurrage and storage fees in the two quarters amounted to more than RMB 300 million.

The price of silicon wafers has risen for nine consecutive years. From the perspective of the entire photovoltaic industry chain, the module link is a terminal product and needs to face customers directly. But this also means that related products receive a higher degree of attention, and the competition is also the most intense. In addition, the component link itself is the least profitable link in the entire industry chain, which is extremely susceptible to upstream and downstream interference, resulting in dramatic cost fluctuations.

In addition, in July this year, photovoltaic giants such as LONGi Green Energy, Tongwei Co., Ltd., and TCL Zhonghuan have raised the prices of silicon wafers and cells. It is reported that the main reason for the price increase is the shortage of silicon material.

According to data released by the Silicon Industry Branch of China Nonferrous Metals Industry Association, the current price of silicon material has exceeded 310,000 yuan/ton, a cumulative increase of nearly 4 times compared with 80,000 yuan/ton at the beginning of 2021.

Taking LONGi Green Energy as an example, the price of silicon wafers has been raised several times within a year. As of July 26, LONGi Green Energy once again raised the price of P-type monocrystalline silicon wafers. Among them, the price of P-type M10 monocrystalline silicon wafers was 7.54 yuan per piece, an increase of 0.24 yuan; the price of P-type M6 monocrystalline silicon wafers was 6.33 yuan per piece. Up 0.25 yuan; monocrystalline silicon wafer P-type 158.75 was quoted at 6.13 yuan/piece, up 0.25 yuan. Estimates show that the average price of LONGi Green Energy's P-type monocrystalline silicon wafers has risen by 27% compared with the end of last year, and the price has risen for nine consecutive years.

The rising price of photovoltaic silicon wafers will increase the cost of many photovoltaic module factories, which may lead to a slowdown in the growth rate of photovoltaic installations in the second half of the year. According to industry sources, relevant departments have also noticed the situation and are coordinating the situation.

Be wary of history repeating itself Throughout history, the development of China's photovoltaic industry has not been smooth sailing, and its road has been bumpy. Through the efforts of countless photovoltaic people, the current pattern of Chinese photovoltaics in the world has finally been realized.

Around 2000, the world began to encourage the development of renewable energy and control greenhouse gas emissions. The development of photovoltaics mainly relies on the photoelectric effect of semiconductor silicon, which converts solar energy into electrical energy. The power generation process is free of any pollution and is very environmentally friendly. However, the purification, smelting, manufacture and slicing of raw silicon silicon are very energy-intensive, and are also accompanied by highly toxic gas production.

At the same time, in the absence of automated production at the beginning, photovoltaics are labor-intensive industries. Therefore, Europe, the United States, Japan and other countries have begun to transfer the most energy-consuming, polluting and labor-intensive assembly production links in the photovoltaic industry, such as silicon purification and smelting, to China.

As a result, China has become a beneficiary country for the development of the global photovoltaic industry. Data show that from 2004 to 2007, China's photovoltaic industry cells jumped from less than 100MW to 1088MW, becoming the world's largest photovoltaic cell manufacturing country. It has also spawned a number of photovoltaic companies, such as Suntech Power, Trina Solar, Jiangxi Saiwei, Hebei Yingli, etc. to go public in the United States during this period.

However, the photovoltaic industry itself is a high-tech industry integrating various disciplines of optics, electromagnetism, and semiconductors. However, at that time, the advantages of China's photovoltaic industry were concentrated in photovoltaic modules, and some profits were made by relying on labor costs. 90% of the raw materials are imported, 90% of the products are exported to Europe and the United States, and 90% of the core technologies are not in hand.

The rapid expansion of China's photovoltaics has ushered in the coveted by capital predators such as Europe and the United States. Upstream companies in Europe and the United States saw that China had no technical weaknesses, and drove the price of crystalline silicon raw materials to soar. The price of polysilicon rose from US$28/KG in 2002 to US$400/KG in 2008. Chinese companies that can only do processing have not only no right to speak to the upstream, but also no pricing power to the downstream. As a result, they can only sell high and sell low, and profits are seized by capital predators.

By the beginning of 2008, the price of polysilicon in the international market was hot again, and upstream suppliers took the opportunity to propose to sign long-term order contracts, while Chinese companies worried about the continued increase in costs signed and locked in production in advance.

However, in 2008, the global financial crisis broke out and the European debt crisis broke out in 2010. The photovoltaic market, which has always been able to develop rapidly with government subsidies, ceased in an instant. Not only did the subsidies significantly reduce, but the price of photovoltaic modules also plummeted by more than 70%. A large number of Chinese photovoltaic enterprises can only be forced to swallow losses. In 2008 alone, more than 300 Chinese photovoltaic enterprises closed down. In 2009, China's photovoltaic industry entered a recession period, and only a few photovoltaic giants were left to work hard.

By 2011, the U.S. Department of Commerce and the European Union began to carry out "dual-reverse investigations" on Chinese photovoltaic companies, imposing anti-dumping duties of up to 238% on related photovoltaic companies. At the same time, the price of polysilicon in the market fell from a high level to US$40 in just one year. However, because Chinese photovoltaic companies have signed long-term supply agreements with upstream companies, they will either pay for liquidated damages or suffer the consequences.

Fortunately, in 2012, the "Twelfth Five-Year Plan for the Development of Solar Power Generation" was promulgated to save Chinese photovoltaic companies through measures such as electricity subsidies, photovoltaic poverty alleviation, leader projects, household photovoltaics, and green certificate transactions. By the end of 2015, the cumulative installed capacity of photovoltaic power generation in China was 43.18 million kilowatts, and the installed capacity of photovoltaic power generation had returned to the first place in the world.

In 2016, the construction cost of China's photovoltaic power plants finally dropped from 60 yuan per watt in 2010 to about 6 yuan per watt, a reduction of more than 90%. The cost of photovoltaic power generation has also dropped to about 0.8 yuan/kWh, finally crossing the threshold of parity.

At the same time, with the general price reduction in the entire photovoltaic industry chain, the cost performance of China's photovoltaic modules is also further improving. At present, the industry has completely gotten rid of the problem of "three heads outside", and has achieved the world's largest photovoltaic manufacturing industry in China and the installed capacity of photovoltaic power generation in China. The world's first, China's photovoltaic power generation world's first "three firsts".

Realizing that China's photovoltaics cannot be stopped, in 2019, the European Union announced the termination of anti-dumping measures against China, and the United States also lowered the double anti-dumping tax rate on China's photovoltaics to 4% in the same year.

Written at the end, China's photovoltaic industry has been very difficult along the way. There have been glories and troughs. Now it is firmly seated on the throne of the global photovoltaic leader, but every step still needs to be cautious. Now several photovoltaic giants have begun to be sued by overseas related companies, which are mainly affected by the increase in silicon material prices and the US WRO policy. It is expected that the subsequent WRO will gradually affect China's photovoltaic industry.

Fortunately, China's silicon materials have been localized, and are less affected by the price fluctuations of foreign silicon materials. In addition, domestic policies have been vigorously supporting the photovoltaic industry in recent years. Therefore, the current market conflicts caused by the cyclical rise in the prices of photovoltaic raw materials may disappear in the near future, but this will continue to cause certain pressure on the downstream of the industry chain, such as module companies.

Reviewing Editor: Peng Jing

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