Understanding the Market | Photovoltaic stocks widened their losses in the afternoon, with the main contract for polysilicon hitting the limit down. Declining project profitability may restrict new photovoltaic installations
Photovoltaic stocks expanded their decline in the afternoon, with IRICO NEWENERGY down 6.22%, XINYI GLASS down 4.76%, XINTE ENERGY down 2.1%, and FLAT GLASS down 1.28%. The main contract for polysilicon hit the limit down, and data from the National Energy Administration showed that the newly installed capacity for solar power generation in June decreased by 38% year-on-year. It is expected that the EU's newly installed solar capacity will be 64.2GW in 2025, a year-on-year decrease of 1.4%. Cathay Securities pointed out that the new policies for renewable energy will lead to increased uncertainty in future cash flows, which may prompt a decline in renewable energy installations
According to Zhitong Finance APP, the decline of photovoltaic stocks expanded in the afternoon. As of the time of publication, IRICO NEWENERGY (00438) fell by 6.22%, trading at HKD 2.26; XINYI GLASS (00868) dropped by 4.76%, trading at HKD 8.41; XINTE ENERGY (01799) decreased by 2.1%, trading at HKD 6.99; FLAT GLASS (06865) fell by 1.28%, trading at HKD 10.82.
On the news front, on Monday, the main contract for polysilicon hit the daily limit down, reported at RMB 47,750/ton. The National Energy Administration recently released statistics on the national power industry for January to June, showing that the newly installed solar power capacity in June was 14.36 GW, a year-on-year decrease of 38%, and a significant month-on-month decline of 85% compared to May's 92.92 GW, presenting a cliff-like drop. The European Photovoltaic Association recently released a mid-year analysis and forecast, predicting that the EU's newly installed solar capacity will be 64.2 GW in 2025, a year-on-year decrease of 1.4%, which may mark the first negative growth in newly installed photovoltaic capacity in the EU since 2015.
Guotai Junan Securities previously pointed out that under the new policy 430, both the volume and price of distributed photovoltaic systems are not guaranteed, and the uncertainty of profitability has significantly increased, marking the complete end of the past "installing power stations and waiting for payments" easy profit model. The introduction of the 531 new policy has pushed new energy to fully enter market trading. From the current settlement prices of new energy participating in market transactions, they are generally significantly discounted compared to the benchmark price of coal. It is expected that after new energy fully enters the market, settlement prices may further decline. The firm believes that the decrease in future cash flow certainty brought by the new energy policy is likely to lead to a decline in new energy installations, with 2024 potentially becoming a historical peak for new energy installations
