In the face of the continued irrational decline in PV module prices, the China Photovoltaic Industry Association gave a "reference price" for module costs in October 2024: 0.68 yuan/W, and pointed out that according to the Regulations for the Implementation of the Tendering and Bidding Law of the People's Republic of China, the winning contract must be higher than the cost.

A number of industry insiders told the Financial Associated Press reporter that the association is not a pricing unit, but as a "wind vane" of the industry, it is more likely that the head enterprises will cooperate with the plan. In the short term, there may be a number of companies at the same time to quote 0.68 yuan/W, so the weight of technical bids in the future will be further increased, and even directly affect the bidding results.

The China Photovoltaic Industry Association released a report titled "Analysis of the Current Cost of Photovoltaic Modules: Winning the Bid Below Cost is Suspected of Violating the Law!" It is mentioned that the cost of 0.68 yuan/W is already the lowest cost of outstanding enterprises in the current photovoltaic industry under the premise of ensuring product quality.

The article pointed out that according to the relevant provisions of the "People's Republic of China Tendering and Bidding Law", the winning contract must be higher than the cost. The China Photovoltaic Industry Association calls on the tenderer to respect the rules of the market, abide by the law, and formulate a reasonable bidding plan by setting a minimum price, reducing the proportion of price scores, and improving the proportion of service and quality scores.

Why 0.68 RMB/W? According to the calculation materials provided by the association, taking the current integrated enterprise N-type M10 double-glass photovoltaic modules as an example, the cost of the cell in October 2024 is 0.269 yuan (unit W, the same below), and after adding glass (0.106 yuan), adhesive film (0.046 yuan), frame (0.091 yuan) and others (0.091 yuan), the total module cost is 0.603 yuan, and the tax-included price is 0.68 yuan.

The association mentioned in the article that depreciation is not included in the above cost calculation, so it is actually lower than the real cost of production, and even lower than the full cost including the three fees. At the same time, the association also pointed out that even if some companies still have meager gross profits from simple module manufacturing and sales, it is based on serious losses in important raw and auxiliary materials such as polysilicon, silicon wafers, cells, and glass, which is unsustainable.

The reporter of the Financial Associated Press noticed that according to the recent public bidding announcement, it is not uncommon for the price of a single tile to be lower than 0.68 yuan. On October 16, Guohua Investment's 2024 third batch of photovoltaic module equipment centralized procurement public bidding candidates were announced, and the bidding prices of the top two winning candidates were 239,678,476,960 yuan and 245,471,310.24 million yuan respectively, corresponding to a unit price of 0.662 yuan/W and 0.678 yuan/W.

According to the above-mentioned regulations, if the bid price is lower than the cost or higher than the maximum bid limit set in the bidding documents, the bid evaluation committee shall reject the bid. Some industry analysts believe that after the "reference price", there may be a situation where multiple companies use 0.68 yuan/W as the bidding price at the same time in the future.

Lv Jinbiao, deputy director of the silicon industry expert group of the China Nonferrous Metals Industry Association, told the Financial Associated Press reporter that the competition between leading enterprises is very fierce. Whether or not you can win the bid will depend on the technical standard judges, and the technical standard generally cannot be blindly evaluated.

It is understood that the technical standard usually includes the comprehensive performance of the enterprise's scale, strength, technical strength, and past performance. In the case that the price of the commercial standard is the same, the technical standard can be used to judge. Generally, the technical standard focuses on showing the bidder's technical plan and implementation plan to ensure the technical feasibility and quality of the project.

On Monday (October 14), a symposium on preventing "involution" vicious competition in the industry organized by the China Photovoltaic Industry Association was held in Shanghai 601012. SH), JinkoSolar (688223. SH), Tongwei Co., Ltd. (600438. SH), GCL Group and other 16 leading enterprises in the photovoltaic crystalline silicon industry chain attended the meeting.

According to the public information of the association after the meeting, the entrepreneurs and representatives fully communicated and reached a consensus on "strengthening industry self-discipline, preventing 'involution' vicious competition, strengthening the market survival of the fittest mechanism, and smoothing the exit channels of backward and inefficient production capacity" and the healthy and sustainable development of the industry.

Some business people told the Financial Associated Press reporter that the photovoltaic leader reached a consensus, and the price limit policy to a certain extent so that the price will not continue to fall, and a good sign of photovoltaic to stop falling has appeared. However, the current vicious competition in the industry stems from many reasons, in addition to the bidding mechanism, local protectionism, raw material expansion, patent protection failure, etc., are also one of the reasons for the low price of modules. In order for the photovoltaic industry to return to orderly development, more measures are needed.