Photovoltaic industry industry chain

The crystalline silicon photovoltaic power generation industry chain can be roughly divided into four links, which are crystalline silicon raw material production, silicon wafer cutting, cell manufacturing and assembly, and system integration according to the order of production process.
The cost structure of each manufacturer varies due to its own conditions, but the main costs are system depreciation, energy and silicon raw materials in general, which together account for about 80% of the total cost of polysilicon. From the past history, reducing system investment and power consumption is the main driver of cost reduction, and the contribution of materials and labor to cost reduction is relatively small. With the convergence of enterprise technology levels, low energy factor costs have become the core competitiveness of polysilicon enterprises. Considering that the government's control over self-provided power plants in the central and eastern regions is becoming increasingly strict, more and more large enterprises are choosing to deploy new production capacity in the central and western regions. For example, GCL-Poly and Tongwei Co., Ltd. have large-scale expansion plans. In terms of silicon raw materials, as of the end of 2016, the silicon in the domestic polysilicon industry was already at a low level. With the improvement of hydrogenation level and the enhancement of by-product recovery and utilization rate, it is expected that the price will be further reduced in the future. Although due to the impact of environmental protection supervision, the price of metal silicon has risen rapidly since the second half of 2017. But in the long run, the supply is relatively sufficient and the price will still fluctuate cyclically.
Silicon wafers are the main raw materials for the production of crystalline silicon cells. A major embarrassment in the field of silicon wafer cutting is that it is under pressure from both upstream and downstream. Upstream polysilicon companies have high gross profit margins (referring to traditional polysilicon companies), high concentration of production capacity, and strong bargaining power, while downstream chip manufacturers actively develop and apply thin-film power generation technology to reduce the use of silicon wafers. After the implementation of the 531 new policy, although the policy will be loosened, the general trend of promoting grid parity will not change. The pressure from upstream and downstream will be transmitted to the silicon wafer cutting industry together, further squeezing the profit space of companies in the industry.
Cell manufacturing and component manufacturing are closely linked, and most cell manufacturers are involved in component manufacturing and directly face downstream system integrators. China accounts for 54% of the global component manufacturing output, and a considerable number of manufacturers choose to export cells directly to Europe, which are assembled and sold by local component manufacturers. Therefore, whether the global photovoltaic industry market recovers or not will directly affect the profits of cell manufacturing and component manufacturing.
The growth of the photovoltaic industry is ultimately reflected in the continuous expansion of photovoltaic installed capacity and the continuous increase of photovoltaic power stations and BIPV, which is based on the reasonable profitability of photovoltaic power station operations. At present, the global photovoltaic market does not have such a foundation and can only rely on government subsidies. Market-oriented photovoltaic power stations and BIPV operations are the mid-term development goals of the photovoltaic industry. However, at present, after deducting subsidies, most domestic photovoltaic power station operations are not profitable. In the later stage, adjustments to national policies such as photovoltaic subsidies and changes in industrial and commercial electricity prices will have a significant impact on the development of the industry.