Image source: Visual China

Interface News Reporter |

"Grid connection sprint, every second counts" and "Countdown to 531".

On March 11, a person from a new energy company in the Yangtze River Delta posted these words on a poster released by WeChat Moments.

At present, there are still 79 days before the "531" node when new energy electricity prices are fully entered into the market. On February 9, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly issued the Notice on Deepening the Market-oriented Reform of New Energy Feed-in Tariffs and Promoting the High-Quality Development of New Energy (hereinafter referred to as "Document No. 136"), which proposes that in principle, all on-grid electricity of new energy projects will enter the electricity market, and the feed-in tariff will be formed through market transactions.

Implement the price settlement mechanism for the sustainable development of new energy, and use June 1, 2025 as the node to distinguish between stock and incremental projects, that is, the "531" comprehensive market entry node referred to as the industry shortage. For projects after "531", the amount of electricity generated is determined through market-based bidding.

In January, the National Energy Administration also issued the "Administrative Measures for the Development and Construction of Distributed Photovoltaic Power Generation", further clarifying the consumption mode of various types of distributed photovoltaics, etc., the policy takes "430" as the time node, and then the project needs to choose the mode of self-consumption or partial Internet access, and can no longer be sold in full online.

To put it simply, the release of the two major policies has brought a great impact on distributed PV, and the project revenue will face more uncertainty in the future.

Jiemian News learned from the industry that due to the impact of the new policy, some distributed photovoltaic companies and platforms conveyed the news of "lowering the installation fee" to the channel, and also adjusted the settlement price of household lease. There are even terminal enterprises that do not accept new orders in order to prevent them from being connected to the grid before the node, and limit the date of signing orders.

"Now the whole is still in a period of confusion, all departments are groping, and there is a certain worry about the future, but the most important thing at the moment is to seize time." A person from a distributed photovoltaic company proposed to the interface news.

In a short period of time, both from the industry level and the capital market, they are worried that the full entry of new energy into the market will cause fluctuations in electricity prices, which will affect the profitability of projects and the profitability of industries and enterprises.

In an interview with Jiemian News, a relevant person from Jinko Power (601778.SH) said that according to the time limit given by the National Development and Reform Commission, clearer new policy rules will be issued by the end of 2025. However, it is expected that the detailed rules of some major provinces will be seen in the first half of the year at the earliest, especially those provinces with more mature conditions for new energy development and electricity marketization.

The two major time nodes directly promoted the emergence of the "rush to install" of distributed projects in the first half of this year.

Jinko Power's above-mentioned person told Jiemian News that it is foreseeable that there will be some distributed rush installation. For projects that are too late to rush to install, before the issuance of local rules, the company tends to cautiously evaluate investment standards such as yield, but there is no situation where it does not contact new orders.

For the industry chain, the "rush to install" has also directly driven up module prices, changing the trend of continuous price reductions caused by oversupply and demand in the industry.

At present, the price of modules has been rising continuously for nearly a month. Jiemian News reporters confirmed the relevant information about product price increases from a number of major module manufacturers.

A first-tier module company told Jiemian News that the price of distributed module orders in the near future is basically above 0.75 yuan/W, and some orders can reach more than 0.8 yuan/W.

Aiko Co., Ltd. (600732.SH) told Jiemian News that at present, its BC module quotation can reach more than 0.8 yuan/W, and there is still room for module prices to rise under the expectation of rush installation. The person in charge of the relevant market business of LONGi Green Energy (601012.SH) responded to Jiemian News that the average price of modules can reach more than 0.8 yuan/W.

"Module prices have indeed risen, with the current average price above RMB 0.7/W, and the current supply is relatively tight." A person from a module company also told Jiemian News.

Jiemian News learned from the industry that some modules can even be quoted close to 0.9 yuan/W. This needs to be looked at by region, and in areas where electricity prices are high, module quotations may also be slightly higher.

At the end of last year, module prices fell to historically low prices, and the bidding prices for centralized procurement were mostly as low as RMB 0.6-0.7/W. The China Photovoltaic Industry Association has also proposed a module cost price of 0.68 yuan/W to call on enterprises to reverse involution and promote the healthy development of the industry.

On March 12, the latest quotation from new energy analyst InfoLink Consulting showed that the average price of TOPCon bifacial double-glass modules in China reached 0.73 yuan/W, up 0.01 yuan per watt from last week.

The agency pointed out last week that the market rushed to install during the period of seeking policy windows, especially the positive impact of the distributed market, and the pull of goods increased significantly, and the order acceptance rate of manufacturers rebounded significantly from March to April.

In addition, upstream enterprises in the industrial chain also told Jiemian News that the current demand for distributed terminals is strong, driving up the prices of silicon wafers and batteries.

In an analysis on March 5, the Silicon Branch of the China Nonferrous Metals Industry Association said that the industry's expectation of a rush to install in March and April will drive downstream module and cell prices upward, which is expected to continue to be transmitted to the polysilicon sector. It is predicted that the average polysilicon market price will show a slight upward trend this month.

However, the price increase of the industrial chain driven by the policy is not long-term.

The above-mentioned first-tier module companies told Jiemian News that after the release of rush demand in the first half of the year, prices may be under pressure in the third quarter, but they are more optimistic about the price trend in the fourth quarter and next year as the industry's supply-side reform continues to advance.

Another industry insider also told Jiemian News that the price increase stems from the phased rush to install and is greatly affected by the policy. As for whether the price continues the growth curve, it depends on the market increment in the second half of the year, otherwise the price increase will not be sustainable.

Fundamentally, whether the price of the industrial chain can continue to rise depends on whether supply and demand improve.

"The recent repair of industry prices is very small, more in the imbalance between supply and demand, a simple repair in the state of blood loss, domestic superposition policy changes, the next two or three months may have the impact of rush installation." Recently, Li Zhenguo, President of LONGi Green Energy, expressed a similar view in an interview with Jiemian News and other media. In his view, the short-term rebound in the price of the industrial chain does not mean that the industry as a whole has improved.

Wang Bohua, honorary chairman of the China Photovoltaic Industry Association, previously pointed out that the introduction of two major policies, electricity price reform and distributed management methods, has made the revenue calculation of power stations more complex than before, which actually increases the difficulty of investment decisions and the requirements for operating units, and the uncertainty of investment expectations is increasing. And the two major policies are issued to the introduction of specific measures for the implementation of various places, and there is a time lag in the middle, in which the investment unit is likely to have a wait-and-see period, which will affect the installation to a certain extent.

Last year, China's new PV installed capacity exceeded expectations, reaching 277.57 GW, a year-on-year increase of 28.3%. During the same period, the structure and regional distribution of new PV installations have also changed significantly. Last year, the proportion of centralized once again surpassed that of distribution, accounting for 57%; Industry and commerce became the main type of new distributed installations, and the proportion of residential use fell to 11%.

This year, affected by policies such as the management measures for distributed photovoltaic power generation and the market-oriented reform of new energy feed-in tariffs, as well as the time lag between these policies and the specific implementation measures of various provinces, the industry has a certain wait-and-see mood, thereby increasing the uncertainty of installed capacity expectations in 2025.

In the long run, the two major policies will promote the healthy development of the photovoltaic industry.

Niu Yanyan, President of LONGi's Distributed Business China, pointed out to Jiemian News and other media that after the issuance of the above two documents, the industry needs to go through a period of exploration and adjustment, and then gradually enter normalcy.

"But it's not pessimistic, the policy will make this market more orderly." Niu Yanyan said that after the introduction of market-based electricity trading and grid restrictions, it will promote the development of energy storage and virtual power plants, and also require more diversified development of ecological partners in the industry, which will also greatly improve the ability of enterprises.

Niu Yanyan also believes that the above policies will help improve the absorption capacity of the entire power grid and help the development of the industry in the long run.

Jinko Power also responded to Jiemian News, saying that the issuance of Document No. 136 further clarified that new energy electricity prices are fully entered into the market, and specifically proposed the establishment of a price settlement mechanism for sustainable development of new energy, which has largely stabilized the market and the long-term development expectations of green power operators.

The person said that the new policy has made adjustments and new requirements in the classification, grid mode, filing, development and construction of distributed photovoltaics, which also makes the boundary conditions of the market clearer and clearer, and the market will return to the track of steady development. From the perspective of investment attributes, despite the challenge of cost fluctuations, distributed photovoltaic still has a certain competitiveness in electricity prices by virtue of its natural advantages of being close to the owner and having no transmission and distribution costs, and the investment return on investment of a single project still has the advantage. For property owners, with the gradual reduction of self-investment costs, whether it is residential users or industrial and commercial users, their demand for distributed photovoltaic will increase day by day.

Recently, Gao Jifan, chairman of Trina Solar (688599.SH), publicly stated that the market-based trading of electricity is a "coming-of-age ceremony" for the photovoltaic industry to become the largest energy source, and it is also the first year to fully stimulate the marketization of energy storage value and give birth to a historic opportunity for the development of energy storage.

Jinko Power said that in the face of the new stage of new energy entering the market in the future, the company has made preparations, including from the resource side, the asset side, to the asset operation service side that combines energy storage and power trading, as well as the business side of electricity sales, virtual power plants and other emerging business layouts.