Under the "anti-involution" initiative of the photovoltaic industry, some projects of central enterprises have recently won bids at low prices, which has attracted attention in the industry.

Late at night on December 22, the official Weibo of the "China Photovoltaic Industry Association CPIA" (hereinafter referred to as the "Association") released an article titled "Shimmer and Persistence - Revisiting the Low-cost Photovoltaic Module Bidding of Guodian Power Xinjiang Bazhou Power Generation Company", using three "did not wait" to re-evaluate the phenomenon of Guodian Power Xinjiang Bazhou Power Generation Company's "ultra-low-priced" photovoltaic modules winning the bid (hereinafter referred to as the "Guodian Project"). This is the second public statement after the association publicly raised four questions about the Guodian project on the 18th.

Talking about the phenomenon of winning the bid at a low price for the Guodian project and the association's many "voices" on this, Li Li, a veteran of the photovoltaic industry, said in an interview with the first financial reporter: "First of all, we need to affirm a series of initiatives and self-discipline actions led by the China Photovoltaic Industry Association, but we should not aim at the central enterprises. The self-regulatory agreement of the industry association is bound by the more than 30 PV companies that have reached consensus, not all PV companies. The two companies that won the bid this time are not within the scope of the 'self-regulatory alliance'. ”

Li Li told Yicai that after the bid for Guodian's "limited price" low-price procurement project was opened, if the price set by the bidder was really unreasonable, the company could choose not to participate in the bidding and let the bid "fail". However, from the perspective of second- and third-tier enterprises, they do not have the brand of the head and first-tier enterprises, and if they want to "survive", they can only choose to reduce prices.

So, can the self-discipline consensus of the photovoltaic industry effectively promote the industry's "anti-involution"?

Reproduce the phenomenon of winning bids at low prices

"We can't help but sigh that even if there is a strong wind, there is little helplessness." The association issued a document saying that in three days, after all, there was no response from the bidding unit Guodian Power Xinjiang Bazhou Power Generation Company, no announcement of the cost calculation basis of the bid, and no explanation of the bid.

The public bidding procurement project that the association has commented on many times is a 600 MW photovoltaic module procurement project of Guodian Power Xinjiang Bazhou Power Generation Company.

On December 20, the project announced the winning bid, and Shanghai Electric Group Hengxi Photovoltaic Technology (Nantong) Co., Ltd. and Hesheng Silicon Industry Co., Ltd. shared the orders of 350 MW and 250 MW for the module procurement project at the bidding unit price of 0.6245 yuan/watt and 0.629 yuan/watt respectively.

Judging from the winning candidates announced on December 17 of the project, a total of three companies were shortlisted, namely Shanghai Electric Group Hengxi Photovoltaic Technology (Nantong) Co., Ltd., ReneSola Solar Technology Co., Ltd., and Hesheng Silicon Industry Co., Ltd., and the bidding prices of the three candidates were 0.625 yuan/watt, 0.631 yuan/watt, and 0.629 yuan/watt respectively.

The reason why the Guodian project has attracted widespread attention is that under the initiative of the industry's "anti-involution", the bidding unit of the project has set a maximum bid limit of 0.6313 yuan/watt in advance, which is far lower than the "reserve price" of 0.69 yuan/watt publicly disclosed by the association in November. Judging from the bidding results, the bidding unit prices of the two winning bidders of the project were 0.6245 yuan/watt and 0.629 yuan/watt respectively, which were the lowest and second lowest quotations among the 16 bidders of the project. The association believes that there is a suspicion of intensifying "involution" competition.

Therefore, on December 18, the day after Guodian Power Xinjiang Bazhou Power Generation Company announced the winning candidates, the association publicly raised four questions about the Guodian project: Does the project strictly implement the requirements of the Central Economic Work Conference? Is the lowest bid excluded in accordance with the relevant provisions of the Bidding Law? Is it the best cost-effective for the whole life cycle according to the relevant requirements of the State-owned Assets Supervision and Administration Commission and the National Development and Reform Commission? Is it formalism?

The association said that previously, the bidding unit Guodian Power Xinjiang Bazhou Power Generation Company, a subsidiary of the National Energy Group, clearly set a maximum bidding limit of 0.6313 yuan/watt in the procurement information. The maximum price of the project is nearly 10% lower than the minimum cost estimated by the association, and the basis for the calculation of such a large gap is questioned.

The association said that as early as November 18, they issued a "risk warning letter" to the tendering unit, and suggested that it should not set unreasonable price limits based on the actual situation. But so far, no response has been received.

Liu Yiyang, deputy secretary-general of the China Photovoltaic Association, publicly said that with the rapid development of the photovoltaic industry today, countless examples have proved that between losing market share and maintaining price and reducing market share, enterprises that adopt low-price competition often have a worrying prospect.

Is it feasible for PV to "break the volume" by relying on industry self-discipline

"Don't think that if you can live, others will die." Cao Renxian, chairman of Sungrow, recently publicly talked about the current situation of "involution competition" in the industry and said, "If you are going to 'commit suicide', then if you want to raise this banner tomorrow, you can't raise it, because you don't have any resources." He appealed to his peers, don't overestimate yourself, think more about difficulties, and deduce more, maybe the investment impulse will be suppressed.

The photovoltaic industry, which has been "bleeding" for a long time and is deeply trapped in the "prisoner's dilemma", needs to find a "good medicine" to get out of the involution competition and return to rational competition.

Since the third quarter of 2024, the relevant documents issued by relevant state departments have respectively promoted the orderly clearing of the photovoltaic supply side in terms of the withdrawal of inefficient production capacity, the prevention of involution competition, the promotion of the construction of photovoltaic bases, the establishment of an effective bidding mechanism, and the recommendation that the winning bid price should not be lower than the cost price.

The photovoltaic industry relies on self-discipline to limit production and price to "break the volume" and seems to have "achieved initial results". Judging from the latest disclosure of the changes in the bidding and bidding prices of module centralized procurement projects, the leading enterprises and key enterprises are responding to the "anti-involution" initiative of the association and relevant departments.

In early December, Power Construction Corporation of China (CPC) announced the opening bid price for 51GW of PV module frame procurement in 2025. In the bidding quotation, the quotation of the leading enterprises and core enterprises in the industry shall not be less than 0.69 yuan/watt, which exceeds the cost reference price updated by the industry association in November.

On December 17, the photovoltaic module procurement project of Shenergy 2 million kilowatt photovoltaic project in Tacheng and Buxel counties of Xinjiang was jointly purchased by Trina Solar (688599. SH) and GCL Integration (002506.SZ) "shared the food", and the winning bid prices were 0.72 yuan/watt and 0.682 yuan/watt respectively, which was higher than the reference "reserve price" set by the association at that time.

However, it is also necessary to pay attention to the fact that the elimination of "backward" production capacity is not achieved overnight, whether it is guided by a "visible hand" or market-oriented, it takes a process.

"In the short term, industry self-regulation may not be effective." Zhang Zhang, an executive of a domestic photovoltaic manufacturing company, told the first financial reporter, "Only when the vast majority of people can't fight the 'price war', the effect of industry self-discipline is more obvious." As long as there are still people who can fight the 'price war', self-discipline will become the self-discipline of a few people, and it will become an opportunity for those who fight the 'price war' to take advantage of loopholes. ”

"At present, there is such a situation in the industry self-regulation in the early stage of the initiative." Zhang Zhang told the first financial reporter that for example, now the "one-size-fits-all" brand of the third and fourth lines of photovoltaic has been kicked out, but the bosses of these new brands also want to protect themselves, save themselves, and live themselves, and the money spent on equipment is not blown by the wind.

The first financial reporter learned from multiple interviews in the industry that at present, the market's focus is on the details of the industry's self-discipline and production restriction agreement, how to allocate the quota and how to supervise it in the future. In particular, the follow-up regulatory measures and the ultimate goal determine the certainty and magnitude of profit improvement, respectively. "Whether the self-discipline of PV manufacturers can achieve real change, how sustainable it is, and how to supervise it are a series of questions that need to be explored and verified by the market."

"Maybe in the future, as the industry self-discipline (detailed rules) becomes more and more standardized and formed, everyone will not take advantage of the loopholes." Zhang Zhang said.

(At the request of the interviewee, Li Li and Zhang Zhang are pseudonyms).