The annual PV industry conference will open in Yibin, Sichuan Province, on December 4, 2024.

Yibin, known as the "City of Coal" and "City of Wine," is now moving towards becoming the "City of New Energy" with the support of star companies such as CATL, Yingfa, Hengdian Dongci, Gaojing, and Heguang Tongcheng.

This annual conference, the most important event of the year for PV professionals, has traveled from Chuzhou in 2022 and Suqian in 2023 to the source of the Yangtze River in 2024.

Photographed by Carbon Catcher

01

PV's "New Situation"

The conference notification from the China Photovoltaic Industry Association is meticulously written and demonstrates great skill:

'To better explore the development status, direction, and path of the global and domestic PV markets under the new situation and promote industry exchange and communication, the China Photovoltaic Industry Association will convene the "2024 PV Industry Annual Conference" in Yibin, Sichuan Province, from December 4-6, 2024, inviting representatives from industry authorities, organizations, experts, and PV enterprise leaders to discuss and analyze hot topics in industry development.'"

What is PV's "new situation"?

From a personal perspective, Carbon Catcher interprets this "new situation" as follows:

From the perspective of supply and demand, there is a further imbalance. Whether domestic or overseas, the PV industry is mired in vicious competition, and while the industry seems to have hit rock bottom, there are no clear signs of a rebound. Internationally, actions across the ocean are frequent, exacerbating the risk of decoupling between China and the US, and complicating variables affecting other overseas markets.

From a business perspective, the entire industry chain has been losing cash for a considerable period, with severe losses among leading enterprises. Older and less risk-resilient enterprises are struggling to survive. On the other hand, the effects of market-driven capacity reduction and deleveraging are not significant due to various subsidies and support from external forces.

To optimize supply and demand structures and promote the healthy development of the PV industry, since October 14th this year, the China Photovoltaic Industry Association has actively organized industry self-discipline, promoting measures such as production and price controls, which have achieved some success in alleviating the "blood loss" in the PV industry.

Regarding the current state of overseas markets, the Ministry of Finance and the State Taxation Administration have introduced measures to historically reduce the PV export tax rebate ratio, which has been in effect for many years. This will stabilize expectations for overseas PV product markets in the long run, but it will also significantly impact the already struggling PV enterprises in the short term. Southeast Asian capacity has long been anticipated, while US capacity is being transferred or observed. Middle Eastern capacity is on the rise. How can PV enterprises navigate the overseas market without pitfalls? More importantly, what kind of cooperation model should be established to seek common ground while reserving differences, resolving conflicts and issues, and fostering a symbiotic relationship between Made in China and the world?

Regarding PV overcapacity, to "encourage and guide industry technological progress and standardized development," the Ministry of Industry and Information Technology has issued the "PV Manufacturing Industry Specification Conditions (2024 Edition)," which imposes higher requirements on the power consumption of newly built and expanded polysilicon projects. Carbon Catcher believes that this subtle change reveals the intention of the industry authority to start with polysilicon, the key link in the PV industry chain, to carry out macroeconomic regulation and control.

The document also specifically mentions, "Guiding local governments to reasonably lay out PV manufacturing projects based on resource endowments and industrial foundations, encouraging intensive and clustered development. Guiding PV enterprises to reduce PV manufacturing projects that simply expand capacity, strengthening technological innovation, improving product quality, and reducing production costs. The minimum capital ratio for newly built and expanded PV manufacturing projects is 30%."

I remember when the industry association first organized a closed-door meeting for leading enterprises, there were mixed reactions in the market, with most people taking a wait-and-see approach. Many misunderstood or opposed it, and some were skeptical about its actual outcomes.

A month and a half has passed, and with the joint efforts of all relevant parties in the industry, a consensus has been reached. Industry self-discipline measures such as production and price controls are also moving in a positive direction, albeit slowly - after all, the PV industry has been "sick" for quite some time now.

In the world of affairs, "doing" is always more important than "saying." As long as we follow the right direction, we will eventually arrive! It is against this background that PV professionals have gathered for this annual, most important conference.

02

Can Yibin Become the 'Lizhuang' for PV Professionals?

Wax figure at the China Lizhuang Culture and Anti-War Museum; Photographed by Carbon Catcher

Starry fields and forests of masters - this is Lizhuang. My first acquaintance with Lizhuang was through Mr. Yue Nan's book "From South to North" over a decade ago - a historical account of how a large number of intellectuals braved artillery fire to migrate to the southwest during the Anti-Japanese War, preserving the spark of Chinese culture. It was a serendipitous encounter, and I was delighted to visit. Lizhuang is located 20 kilometers downstream along the Yangtze River from Yibin. From 1940 to 1946, over 10,000 teachers and students from Tongji University, the Institute of History and Philology at the Academia Sinica, the Chinese Institute of Architecture, and the Geodetic Survey Section of the Chinese Academy of Sciences gathered here. During the Anti-Japanese War, as long as "China Lizhuang" was written on a family letter, it would be accurately delivered to this small town. Over 40 academicians have emerged from here: Fu Sinian, Liang Sicheng, Liang Siyong, Li Ji, Dong Zuobin, Jin Yuelin, Tong Dizhou, Li Fanggui, Tao Menghe, Wu Mengchao...

A corner of Lizhuang; Photographed by Carbon Catcher

My opportunity to visit Lizhuang was directly related to a flight schedule change: I received a notification before departing Shanghai that my December 3rd flight was canceled and rescheduled to the 2nd, with changes to my return flight as well - forcing me to arrive in Yibin two days earlier. Of course, I also wondered if Yibin was being hospitable by hoping visitors would stay longer. I suspected Yibin was "tampering" with flights, not out of baseless speculation - this southwestern city has gone all out to stimulate tourism. In October this year, Yibin Wuliangye Airport's official Weibo account announced that regardless of the origin, passengers arriving by high-speed rail to Yibin and departing by air within 36 hours would have their second-class train tickets reimbursed. This policy continues until December 31st this year. Come to Yibin, and we'll reimburse your travel expenses! After all, it's just a bottle of Wuliangye! However, while there are many cities wealthier than Yibin, not many do this (Shanxi Jincheng and Yunnan Qujing are exceptions).

On December 3rd, the day before the conference opened, gardening workers were busy; Photographed by Carbon CatcherRegarding the equally fiercely competitive PV industry investment attraction, Carbon Catcher has always had some reservations. After all, today's difficulties in the PV industry are not only due to the efforts of enterprises themselves and the support of capital but also inseparable from the strong support of local governments and even their direct involvement.

Although PV enterprises have little say or dignity in front of the "Big Five and Six Small" power companies and overseas customers, they are honored guests of local governments, receiving financial support, land, factories, equipment, and even electricity price subsidies. Everything possible is given, and if it's not possible, conditions are created to make it so. The goal is a single one: to develop the local economy, create jobs, and nurture the local environment.

Regarding this issue, last month in Chengdu, a PV industry leader told Carbon Catcher:

'In fact, every local government exhausts various methods to attract investment and promote regional economic development. If no one is willing to invest, take risks, or develop, then society as a whole will stagnate. If government officials do not attract investment or create conditions for people to succeed after they arrive, the government's elements will also disappear. Therefore, I have never criticized them. As long as society maintains stable expectations, all choices are normal. As long as you accept the consequences, it is acceptable.' This statement has some merit. Every region needs to develop its economy, just like corporate investments, as long as it is responsible for the final outcome. It is understandable for the government to use all its resources to develop the economy. Resources vary in quantity and capabilities differ, but the direction of effort is the same. Of course, for the huge waste of resources caused by industrial investment attraction or even "smuggling in private goods," we also have relevant departments and units to manage and the public and media to supervise.

In the past two years, whether in Chuzhou, Xuancheng, Wenzhou, or now in Yibin, Carbon Catcher has felt the local enthusiasm and initiative. I remember once when the mid-year PV industry conference was held in Xuancheng, the city's Development and Reform Commission, Industry and Information Technology Bureau, and other units mobilized their entire staff, with each attendee being served by a local staff member on a one-on-one basis.

Competition is fierce among enterprises, and so is competition among regions to develop their economies.

Now, with the successive introduction of various macroeconomic control policies in the PV industry, the phenomenon of blind capacity expansion and low-level investment may be effectively curbed. Under macroeconomic control, competition still exists but will transition to a higher level, driving high-quality growth. The current PV industry is like experiencing an unprecedented arduous war. PV professionals gathered in the open city of Yibin, just like the masters gathered in the ordinary village of Lizhuang back then. What sparks of thought will they collide with?

Enduring hardships with perseverance, painstaking efforts, all for PV.

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