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PostsStrong rally, is the photovoltaic sector about to see a major reversal?
LONGi Green Energy Technology hit the limit-up on Friday
This is the second limit-up for LONGi after the National Day bull run.
At the same time, the entire photovoltaic sector is also close to hitting the limit-up.
So the question now is: Has the continuously declining photovoltaic sector really reversed?
Here’s the conclusion: Currently, the photovoltaic sector is only experiencing a rebound, not necessarily a reversal,though there may still be some hidden opportunities.
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1. Why is it just a rebound?
This is because the issue of overcapacity in photovoltaic power generation has not been fully resolved,and the photovoltaic industry is still in a state of strong expectations but weak reality.
First, despite the large number of news reports about the photovoltaic industry,these messages won’t have a significant impact on the sector.
①Limited improvement on the demand side
One of them is the U.S. Department of Commerce’s announcement on October 21 to revoke anti-dumping and countervailing duty orders on certain solar cell products.
Note that the photovoltaic cells mentioned in this news specifically refer to small, low-power non-mainstream products,but most listed companies don’t produce such products.
Secondly, another piece of news is that on October 18, the Photovoltaic Industry Association called on power plant bidders to follow market rules and the relevant regulations of the Bidding Law, with bids not lower than 0.68 yuan/W.
Later, China Energy Conservation’s 2.5 GW tender also received bids at 0.68 yuan/W.
But obviously, this stability is guided rather than mandatory—it only prevents a certain degree of vicious competition.
Earlier, industry leaders in the photovoltaic sector held a meeting and reached a consensus to voluntarily reduce capacity, but this is also not mandatory.
No one will voluntarily leave the table, so this won’t fundamentally change the supply-demand dynamics.
Moreover, when prices are supported and losses can be calculated, the time for capacity reduction may actually be prolonged.
②Signs of a turning point for photovoltaic products remain unclear
Secondly, this can be seen from the price trends of main-chain products.
The chart below shows that since mid-October, prices for various modules have been declining.
Of course, under policy protection, prices won’t continue to fall,but the arrival of a turning point still requires patience.
Among all the news, the following two are truly worth paying attention to and tracking:
First, LONGi’s self-developed BC battery, HPBC2.0, has achieved a photoelectric conversion efficiency of 25.4%.
In the photovoltaic industry, conversion efficiency is a critical metric—it directly determines whether you can secure orders and whether your competitors are forced to exit.
During this cycle, LONGi didn’t chase the trend of expanding TOPCon capacity but instead bet on BC batteries.When BC batteries scale upand gradually become mainstream,that may be when this cycle truly turns upward.
Another rumor on the 23rd is that the Ministry of Industry and Information Technology may issue a document later,restricting capacity utilization in various photovoltaic segments from an electricity consumption perspective, such as "silicon production energy consumption not exceeding 50 kWh per KG."
If implemented, this would be mandatory capacity reduction.Because even some listed companies may struggle to meet this standard, let alone small and medium-sized factories.
If this standard is enforced, capacity will drop quickly,so keep an eye on whether this can be implemented.
Currently, the photovoltaic sector has been at rock bottom for a long time. Now, with the market switching opportunities and some positive news, a rebound is normal.
Over the weekend, the National Bureau of Statistics reported a 27.1% year-on-year decline in national industrial profits.
Next week’s earnings reports may pour cold water on the current market sentiment.
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