1. Photovoltaic glass industry attributes
Initial investment of RMB300 million / year; The willingness to expand production is cyclical
Like ordinary glass, photovoltaic glass industry is also cyclical, mainly due to the following two aspects:
First, due to the high initial investment and long return time, the willingness of most enterprises to expand production is strongly related to their current profits. If the profits are high, they are willing to expand production, and if the profits are low, they may not be willing to expand production.
In terms of initial investment cost, the initial investment of photovoltaic glass kiln is as high as 44 million yuan / 10000 tons, about 230 million yuan / GW, which is close to silicon material (210 million yuan / GW) and silicon wafer (200 million yuan / GW), much higher than adhesive film (15 million yuan / GW) and inverter (10 million yuan / GW).
The return on investment is similar to that of the glass module (ROIC, 15%) and significantly higher than that of the glass module (ROIC, 15%). According to the calculation of ROIC = 12% in 2019 and the initial investment of 230 million yuan / GW in the kiln, the EBIT of photovoltaic glass corresponding to the demand of each GW is 29 million yuan, which is 8 years back to the current cycle; Since the general kilns still need to invest in cold repair after 7-8 years of use, the second and third tier enterprises do not have strong power to expand production when the profits of the industry are poor.
Continuous production (long kiln shutdown and resumption period, high startup and shutdown cost) + slow production expansion (1.5 years) & rarr; There are many stage supply and demand mismatches
Second, the production process and capacity construction characteristics of photovoltaic glass itself determine its periodicity, that is, continuous production, construction & climbing time is long.
Continuous production: similar to the silicon material link, the production of glass also has the characteristics of continuity. If the kiln is stopped and then ignited, it generally takes more than one month to re bake the kiln, consumes a lot of fuel, and the start-up and shutdown cost is high. Therefore, even in the period of excess supply, the second and third tier enterprises may choose to produce at a loss, such as the excess supply of glass in 2018q3, The price is only about 22 yuan / m2, the leading enterprises only have a gross profit margin of 23%, and the third tier enterprises basically have zero gross profit.
Long construction & climbing cycle: it takes about 18 months for the glass production capacity to reach the production capacity. Therefore, even in the period of tight supply and demand in the industry, the production capacity cannot be released quickly, resulting in a rapid rise in prices. For example, 2020q4 reached 43 yuan / m2, almost doubling the low point of 18q3. At the same time, the gross profit margin of leading enterprises also increased rapidly to 59%.
PV installed capacity growth + double glass module permeability & uarr; = The industry is growing
In addition to periodicity, photovoltaic glass also has good growth, mainly in the following two aspects:
First, the growth of new photovoltaic installed capacity drives the growth of photovoltaic glass demand. From 2015 to 2020, the compound growth rate of global photovoltaic new installed capacity was about 20%, which brought basic growth rate to the demand for photovoltaic glass.
Second, the increase of double glass penetration brings additional demand to the industry. In 2017, the proportion of double-sided components (2mm glass is generally required on both sides, which is 25% higher than the weight of traditional single-sided 3.2mm glass) accounted for only 2%, and it will reach 30% in 2020, making the demand growth of photovoltaic glass exceed that of photovoltaic industry. Under the comprehensive effect of the above industry characteristics (growth + cycle), although the glass price reduction trend is clear, the global photovoltaic glass market scale CAGR still reached 9% from 2015 to 2019.
Ground power station: the back power generation gain makes the application of double glass components more economical. In the 21-year bidding, double glass accounts for 57%
In the ground power station scenario, double-sided power generation makes double-sided double glass components more economical. According to the quotation on November 21, 2021, the price of 3.2mm single glass module is about 2.04 yuan / W, while the price of 2.0mm double glass module is about 2.09 yuan / W. the price difference between the two accounts for only 1% of the overall cost of photovoltaic installation of 4 yuan / W. At the same time, the empirical data of Longji show that the average power generation gain of double glass components is 12.1%. Therefore, after considering the power generation gain, the use of double glass components can reduce the kWh cost more than single glass components. In the bidding for ground power station components from January to October this year, 57% were double glass components.
Distributed: the double glass module has three advantages: high strength, low attenuation and 5-year power warranty period, and has power generation gain compared with the single glass
In the distributed scenario, although there is no gain of back power generation, double glass can help prolong the service life of components, lower the attenuation rate, increase the power generation in the whole life cycle, and also effectively reduce the kWh cost. The specific reasons are as follows:
High strength: the structure of double-sided glass is adopted to make the components have higher mechanical strength. Cracks in components can be reduced during handling and installation.
Fireproof, moisture-proof and low attenuation efficiency: the double glass module has excellent corrosion resistance and barrier performance, which can avoid the corrosion of the module caused by water vapor and air through the glass, and reduce the battery attenuation rate of the module. The attenuation rate of the double glass is 0.45% year by year from the next year, while that of the single glass is 0.55%. After 30 years of operation, the low attenuation efficiency will bring an average annual power generation gain of 1.3% to the double glass module.
Longer power warranty period: double glass components have a longer warranty period than single glass components. The warranty period of double glass is up to 30 years, while that of single glass is 25 years.
2. Supply and demand relationship
Demand: the penetration rate of double glass is expected to reach 50% + in 22 years, driving the total demand of glass to reach 11 million tons +
As the photovoltaic glass industry is cyclical, the relationship between supply and demand is the top priority of the industry. From the demand side, we believe that the incremental demand brought by double glass and the structural demand brought by wide glass are the main sources of uncertainty under the condition of setting the growth rate of photovoltaic installed capacity, and we have made sensitivity calculations respectively.
First look at the double glass. CPIA predicts that the penetration rate of double-sided modules will reach 50% in 2023 and 70% in 2030. Considering that double glass is more cost-effective when the glass price is at the bottom, and the promotion speed may be accelerated, we calculate that when the penetration rate of double glass modules is 50 / 70% in 2022, the demand for photovoltaic glass will reach 11.48/11.98 million tons / year respectively (corresponding daily melting capacity is 31451 / 32816t / D), Corresponding to 1.91/2.16 billion Ping / year; In terms of quality, when the proportion of double glass modules increases from 50% to 70%, the demand for photovoltaic glass increases by 4.34%; According to the area, after the proportion of double glass modules is increased, the demand for photovoltaic glass is increased by 13.02%.
Supply influencing factors: willingness to expand production (profit margin, downstream demand), capacity to expand production (energy assessment & environmental assessment, capital)
Willingness to expand production: profit margin: there is a large margin between first tier enterprises and second and third tier enterprises, and the market share of first tier enterprises is high. Leading enterprises may reduce the ex factory price of products to curb the willingness of peers to expand production. Downstream demand: due to the characteristics of continuous production of photovoltaic glass and high start-up and shutdown costs, the actual production capacity launch rhythm of manufacturers is greatly affected by the actual downstream demand of the current period.
According to the most optimistic calculation, the effective production capacity of photovoltaic glass increased by 69% and 61% year-on-year respectively in 22 and 23 years
Assuming that the willingness and capacity to expand production are considered according to the most optimistic situation, it is expected that 26063t / d effective capacity will be added in the whole industry in 2022, and the effective capacity of the industry will reach 64056t / D, with a year-on-year increase of 69%; By 2023, the effective capacity of the industry will reach 103448t / D, with a year-on-year increase of 61%.
Considering the willingness and ability to expand production, some enterprises may not be able to expand production capacity on time, and the effective production capacity of the industry is the same as + 23% when the first line expands production on schedule
Assuming that only the first-line leaders (Xinyi solar energy (12.92, 0.52, 4.19%) expand production as scheduled, while other enterprises only retain the original production line and cold repair the old production line as planned, the annual effective capacity is expected to be 17.06 million tons in 2022 (corresponding to daily melting capacity of 46734t / D), an increase of 23% year-on-year; In 2023, the annual effective capacity is expected to reach 22.29 million tons (corresponding to daily melting capacity of 61059t / D), an increase of 31% year-on-year.
Considering the withdrawal of small kiln capacity with stock less than 400t / D, the effective capacity of the industry planning in 22 years is 21.93 million tons, an increase of 58% at the same time
Assuming that the small kilns below 400 tons begin to exit in 21q4 and the new kilns are put into operation according to the original plan, the planned effective capacity of the industry in 2022 is expected to be 21.93 million tons (corresponding to daily melting capacity of 60076t / D), an increase of 58%, and the planned effective capacity of the industry in 2023 is 36.09 million tons (corresponding to daily melting capacity of 98883t / D), an increase of 65%.
