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In the "post-PV era" without subsidies, can the demand for tracking solar brackets be activated?


The Ministry of Finance, the National Development and Reform Commission, and the National Energy Administration’s "Several Opinions on Promoting the Healthy Development of Non-aqueous Renewable Energy Power Generation" and the "Administrative Measures for Renewable Energy Price Additional Subsidies" Wind power, photovoltaic power plants, and industrial and commercial distributed photovoltaics will completely eliminate state subsidies (excluding users).
 In the "post-PV era" without subsidies, can the demand for tracking solar brackets be activated?
This means that 2020 will be the last year for my country's photovoltaic power plants to enjoy state subsidies, and 2021 will fully enter the era of parity.
So, in the "post-PV era" without subsidies, can the demand for tracking solar brackets be activated?
On the power generation side, according to the latest data from the National Energy Administration, coal-fired is currently the lowest-cost source of power generation. The average desulfurization price in 2019 is 0.3624 yuan/kWh, but the cost of photovoltaic power generation is 0.44 yuan/kWh. From the user side, Western Securities has calculated that the domestic distributed photovoltaic unit price per kilowatt-hour is 0.389 yuan/kWh, and the highest internal ground photovoltaic is 0.447 yuan/kWh. Compared with the electricity price of 0.52 yuan/kWh for urban residents in China as of April 2020, photovoltaics are significantly lower than the electricity price of urban residents, and households have already achieved the standard of parity.
The power distribution side can achieve parity on the grid, while the power generation side wants to do so without government subsidies, and cost reduction is the key.
In terms of prices, the prices of polycrystalline silicon wafers, inverters and fixed photovoltaic solar brackets have fallen year after year, and manufacturers are only in a state of meager profit. It can be said that the price of various components in the industry chain has not much room for decline.
Another idea is to start from improving the efficiency of photovoltaic systems, such as improving module performance and intelligent operation and maintenance. As the only component that can greatly improve the power generation efficiency, the tracking photovoltaic bracket plays an important role in this case.
According to GTM Research data, in 2017, the global tracking bracket accounted for 16% of ground-based photovoltaic power plants, and it is expected that by 2023, the proportion of tracking brackets will increase to 42%. Globally, the Americas is still the main market for photovoltaic tracking brackets, accounting for more than half of the global tracking bracket demand. However, in recent years, many emerging photovoltaic markets, especially Asia, Australia and Africa, have rapidly increased the demand for tracking brackets.
In the short term, the tracking bracket can well meet the demand for improving power generation efficiency on the power generation side. The main function of the tracking bracket is to improve power generation efficiency. According to industry insiders, the increase in power generation is about 8-15%. China used to have guaranteed hours under the high subsidy policy, and the excess electricity could not be consumed, so the tracking bracket could not be effective. In the era of parity, the flexibility of utilization hours has increased. With the addition of tracking brackets, the stability of power station output has greatly increased, which is beneficial to grid consumption. Tracking brackets can play a role in increasing power generation, and demand is expected to increase significantly.
In the long run, compared with traditional fixed solar mounting system, the operational efficiency improvement brought by tracking brackets will offset the incremental costs of equipment installation and operation and maintenance, and on this basis, greater investment returns can be achieved.
It is understood that the premium of the tracking bracket compared to the fixed solar mounting system is about 0.3 yuan/W. The new research team of Haitong Electric believes that if the tracking bracket increases power generation by 8%, the increase in IRR will be about 1.8 points (considering 30% leverage ); When the system cost increases by 0.3 yuan/W, the IRR will drop by 1.8-1.9 points; therefore, if the tracking bracket can provide more than 8% of the additional electricity issuance, it will be a premium of 0.3 yuan/W compared to the fixed bracket. For investors , The cost is consistent. Under normal circumstances, the tracking bracket can increase the power generation efficiency by 8-15%, so the benefits can not only offset the premium cost relative to the fixed bracket, but also achieve greater benefits.
However, it is worth noting that overseas markets are an important support point for China's tracking bracket manufacturing enterprises, and changes in international trade protection policies have a greater impact on the company's overseas product sales. At present, the overseas sales revenue of domestic photovoltaic companies is generally on the rise. However, in recent years, affected by the Sino-US trade war, the international situation has changed a lot. If the customer's country adopts trade protection policies such as imposing tariffs on China, this will directly affect the photovoltaic company Profitability and expansion in overseas markets.
In addition, the price of the tracking bracket is subject to the risk of raw material price changes. According to industry insiders, the raw materials or services required for the production of photovoltaic support products include steel, aluminum, and some purchased components. If the company signs a sales order and determines the sales price, the price of raw materials will rise sharply, and the sales price cannot be adjusted with the raw materials. Synchronous price adjustments may cause the profit margin of the corresponding orders to be compressed, which will adversely affect the company's performance.
In this context, among the front-end companies in the global tracking bracket field, only CITIC Bo and Trina Solar are Chinese companies, and Trina Solar is also an acquired Spanish company. The only major company developed in China is CITIC Bo. The market share is around 5%.
Judging from the financial statements, the current development trend of CITIC Bo is good. From 2017 to 2019, product sales volume increased steadily, and the proportion of tracking bracket sales revenue increased from 40% to 52%; in 2018, tracking bracket sales increased significantly. The slowdown in sales volume growth in 2019 is due to the 2019 domestic photovoltaic power plant bidding policy that was only introduced on July 10, 2019, which lags far behind previous years, resulting in a slowdown in industry growth. In the first half of 2020, the company achieved sales revenue of 858 million yuan in tracking brackets, which further increased to 67%.
An industry insider from Jufeng Finance believes that assuming that the proportion of global tracking brackets will continue to grow at an overall compound growth rate of 27% and domestic annual compound growth rates of 24%, it is predicted that domestic tracking bracket demand will increase from about 6GW to 11GW by 2023, and overseas tracking bracket demand will increase from 28GW increased to 58GW. Therefore, the market for tracking stents has broad room for development.
Guosen Securities expects that under the condition that the company maintains significant technological and brand advantages in the domestic tracking bracket market, its market share is expected to rise from 28% to 42%. At the same time, the company needs time to build overseas channels and enhance brand influence. The market share of tracking solar brackets has increased from 4% to 10%, and the future growth momentum is good.
However, a private equity investment director expressed a cautious attitude: "This year, the share prices of companies related to the photovoltaic industry chain have generally risen, but from a fundamental perspective, the pressure of related companies to reduce costs in the future will be great, otherwise their profitability will decline. Under this circumstance, switching from a fixed photovoltaic support system to a tracking support will first increase the costs of all parties. Therefore, it remains to be seen whether this new business model can be run through in the country," the person believes.

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