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Why does the technical route of photovoltaic industry continue to iterate

The decline of kilowatt hour cost (LCOE) is the key thrust for the development of photovoltaic industry. The early development of China’s photovoltaic industry was mainly export-oriented, with less domestic demand; With technological progress, the cost of kilowatt hour electricity continues to decline, and the government starts the domestic market through subsidies and other policies to drive the development of the whole industrial chain; The development of the whole industrial chain has accelerated the cost reduction and efficiency increase of the industry. After the cost has fallen to a certain level, the government will implement the refund and subsidy to promote the industry to realize parity online through the market-oriented mechanism. In this process, LCOE is always the key indicator.

Before 2011, due to the limitations of technology and scale, China’s photovoltaic power generation cost was high, the economy was not competitive with thermal power, and the installation willingness of power station operators was low. Photovoltaic cells were mainly exported. In 2010, China’s photovoltaic cell output accounted for about 50% of the total global output, and the export proportion was as high as 95%.

With the continuous improvement of the photoelectric conversion efficiency of the battery, the price of kilowatt hour electricity fell from 1.7 yuan in 2009 to 1.2 yuan in 2011. China has quickly launched the domestic photovoltaic market by setting a benchmark on grid electricity price, and photovoltaic development has entered a transitional period. At the same time, the government introduced subsidy policies. For the part where the benchmark on grid price of photovoltaic power stations is higher than the benchmark on grid price of local coal-fired units (including desulfurization and other environmental protection prices), subsidies are given through the renewable energy development fund, which has led to the rapid growth of photovoltaic installed capacity. The cumulative domestic photovoltaic installed capacity has increased from 17.45gw in 2013 to 174.46gw, and the CAGR has reached 58.48%.

The rapid expansion of demand has made the speed of technological progress and cost reduction of the industry faster than expected, and the decline of benchmark electricity price of photovoltaic power generation has accelerated. In 2018, the national development and Reform Commission issued the “531” new deal, which means that the photovoltaic industry has entered a parity period of full refund and subsidy. At present, the comprehensive power cost of photovoltaic is still higher than that of thermal power (considering peak shaving), especially in the eastern region with high power demand, the industry cost reduction and efficiency increase is still the main theme, and the decline of lcoe can enhance the profitability of power station operators, and economy is the core driving force of their installation.

The profit law of battery chips urges manufacturers to constantly explore more efficient technologies to obtain a high premium. The production of battery chips is relatively process oriented, and the product differences between enterprises are small. The technical barrier mainly lies in the equipment end. Therefore, the industry has obvious late development advantages. Latecomers can purchase equipment and quickly enter the industry after the technical path is determined. The profits of advanced entrants are impulsive, enjoying a high premium in the large-scale stage of new technology, but soon fell due to more entrants. For example, the gross profit margin of monocrystalline silicon battery of Tongwei shares gradually increased in the early stage of perc mass production, but fell sharply in 2020 and 2021. This Law urges manufacturers to maintain a certain level of profitability by producing more efficient battery chips, raising prices and reducing production costs. When the price of battery chips shows a downward trend, the technology iteration speed will be faster.

The cost reduction is mainly reflected in the large size and thin slice of silicon wafer to reduce the silicon cost, and the localization of equipment and consumables to reduce the non silicon cost.

Large size: when the new generation technology route is not clear, enterprises invariably choose to increase the size of silicon wafer, increase the area of components contacting the sun, and obtain higher power generation efficiency, so as to reduce the cost of kwh. According to the calculation of Shandong Electric Power Engineering Consulting Institute Co., Ltd., compared with 166 silicon wafer, the support cost of 210 silicon wafer has been reduced by 25%. When accounting for the cost of kwh, it can be reduced by 0.1 yuan /w at most. In addition, 210 silicon chip components have certain advantages in land occupation area and the number of piles. In 2021, the size of 158.75mm and 166mm will account for 50% in total; 166mm is the largest size scheme that can be upgraded for the existing battery production line, so it will be the transitional size in recent 2 years; The combined proportion of 182mm and 210mm sizes has rapidly increased from 4.5% in 2020 to 45%, and will continue to expand in the future.

Slicing: in 2021, the expansion capacity of silicon and battery chips gradually fell, while the expansion speed of silicon material link was slow, resulting in silicon material supply exceeding demand, and the price continued to rise. In November, it rose to a high point of 272 yuan / kg and then fluctuated. Some manufacturers have reduced the thickness of silicon wafers, alleviated the cost pressure, and promoted the wafer slicing process. For example, the decline rate of the thickness of monocrystalline silicon wafers quoted by Longji has significantly accelerated since 2020, and has now fallen to 160 μ m。 Wafer slicing and the marketization of n-type batteries complement each other. The thickness of perc’s wafer is 160~175 μ M, if it is further thinned, the stress of the aluminum back field will cause the silicon wafer to crack; The current mainstream thickness of TOPCON is 150~155 μ m. The laboratory batch of hjt is 110~120 μ M, very few manufacturers can achieve 90 μ M or so. In conclusion, n-type batteries such as TOPCON and hjt are more suitable for thin silicon wafers, which can save about 20% respectively μ m、60 μ M thickness. Moreover, the cost of n-type battery is high, and the slicing is conducive to reducing the cost and improving the economy.

Localization of equipment and consumables: in the early stage of development, the key production equipment of perc, TOPCON, hjt and other batteries were monopolized by overseas manufacturers, and the production line investment was quite high. With the breakthrough made by domestic manufacturers and the gradual availability of the whole line of supply capacity, the current overseas enterprises have basically withdrawn from the Chinese market, and the decline rate of equipment investment continues to exceed expectations, resulting in the decline of lcoe. In terms of consumables, the increment of consumables of n-type battery compared with p-type battery is mainly silver paste. Because the backlight surface of n-type battery also needs silver paste to realize the electrode structure of the front side of p-type battery, and the front emitter of n-type battery needs more silver paste to achieve mass production and acceptable conductivity, therefore, the demand for silver paste of n-type battery is higher than that of p-type battery. The localization rate of positive silver of p-type batteries has significantly increased in recent years, which is 50% in 2020 and is expected to reach 55% in 2021. However, the silver paste technology threshold required for n-type batteries is higher and the localization rate is low, about 20%. Overseas Kyoto electronics of Japan can provide mature n-type silver paste. In addition, Holly’s, LG, namics and DuPont also have relatively mature products. Therefore, reducing the consumption of silver slurry and improving the localization rate without changing the efficiency has become another key direction of cost reduction.

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