It is difficult to solve the problem of China's photovoltaic financing
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At present, the photovoltaic market is overcast. Photovoltaic companies, which have been favored by investors, are now regarded as “sacred gods†by banks. Commercial banks have generally adopted financial tightening policies for PV companies, which has made some PV companies have tight capital chains.
Photovoltaic industry crisis
The world's photovoltaic industry has fallen into too many industry benchmarks, including Q-Cells SE, the world's largest solar cell company, and Solyndra, which Obama has declared “leading us to a brighter and more prosperous future,†and the world. The largest solar energy project development right holds the US Solar Trust Company.
Although benefiting from the country's "Golden Sun" project and the strong support of local governments and state-owned banks, China's PV companies are also difficult to stay out of. At the beginning of this year, Chaori Solar Company opened the domestic credit bond default, which shocked the domestic bond market. Then Wuxi Suntech, the world's largest solar panel manufacturer, also crashed into the ground, becoming the first company in mainland China to default on foreign debt. Jiangxi LDK, the world's largest producer of solar wafers, followed Suntech and entered the vortex of debt default. The default behavior of large enterprises is similar to that of domestic counterparts who are also in huge losses. At present, it is difficult for the PV industry to obtain loans from banks.
As a domestic industry that relies heavily on foreign markets, PV companies not only have internal worries but also external problems. The domestic market of China's PV industry has not been opened, and the fate of the company is closely tied to the economic conditions of the countries importing Europe and the United States. The photovoltaic industry suffered from the 2008 financial crisis when it was a toddler, and the demand for solar products in Europe and the United States fell sharply. At the same time, the US and EU's anti-subsidy and anti-dumping investigations on China's solar industry are tantamount to pushing the Chinese PV industry to a desperate situation.
Waiting for policy spring breeze
What are China’s PV companies waiting for now? Bank loans? Issuing corporate bonds? Exploring the domestic market? For PV companies that are not looking for “markets†to find “mayorsâ€, they are waiting for a spring breeze to save them. Water and fire.
At the most difficult time for PV companies in 2009, the Ministry of Finance, the Ministry of Science and Technology and the National Energy Administration jointly issued the "Notice on Implementing the Golden Sun Demonstration Project", which decided to accelerate domestic photovoltaic power generation through financial subsidies, technology support and market pull. Industrialization and scale development. However, the photovoltaic "New Deal" that PV companies are waiting for is probably not satisfactory, and the "Golden Sun" project has also entered the subsidy liquidation stage.
The first thing that PV companies are waiting for is the Notice on Further Improving the Issuance of Corporate Bond Issuance issued by the National Development and Reform Commission. The "Notice" lists solar photovoltaic and wind power applications as "projects that focus on overall structural adjustment or promote regional coordinated development" and will receive key support.
However, this intention is to simplify the notification process of the bond issuance application process, and it cannot solve the PV enterprise crisis. Compared with the situation a few years ago, the photovoltaic industry has fallen into a financing dilemma. When the photovoltaic industry is still a hot spot in the market and the darling of local governments, banks are scrambling to lend to these companies. The leading PV industry is also able to successfully finance from domestic and foreign stock markets and bond markets. While reducing PV subsidies in Europe, Chinese PV companies are enjoying a huge feast of government subsidies and bank loans. The period from 2009 to 2011 is the fastest increase in the amount of loans to Chinese PV companies. According to research by Mercom Capital Group, a foreign clean energy consulting company, from January 2010 to September 2011, Chinese state-owned banks and Chinese solar leading enterprises reached a $41 billion loan agreement. A loan agreement of this size dwarfs the $535 million loan from Solyndra, which Obama carries.
The former “golden†big family was now listed as a “high-risk enterprise†by the bank and was rejected. The recent loan success case is only the $165 million loan contract signed by Yingli Green Energy Holdings Co., Ltd. and the policy bank China Development Bank.
As domestic rating agencies are marginalized and investors generally believe that PV companies face significant operational risks, PV companies' bond interest rates tend to exceed the equivalent rating of corporate bonds by more than 200 basis points. LDK’s debt financing in Hong Kong with a 10% high interest rate has failed. The suspension of credit debts by Super Solar is equal to cutting off the financing of PV companies from the bond market. The only successful PV bond this year is Jingke Energy Co., Ltd.'s six-year bond with a coupon rate of 8.99% per annum. In addition to the full guarantee of the local government, the reason for the company’s successful bond is that the asset quality of the company is better. It is not counted to open the Jingke debt, and there has been no news that photovoltaic companies have issued bonds in the market for ten months.
Misreading situation
If PV companies are still expecting government support during the government's "Golden Sun" period, it is misreading the current situation.
The government will take countermeasures to investigate the import of EU wines at the moment of EU “double-reverse†PV companies, and is also discussing the distributed power subsidy policy, but a meeting of the State Council last year has set the theme for the development and policy of the PV industry this year. The meeting listed “major capacity overcapacity†as the top priority of the PV industry, and “accelerated industrial restructuring and technological progress†was the first of the five policies proposed by the conference. The meeting called for the "market" mechanism to fully play its role: "to make good use of the market's 'forced mechanism', encourage mergers and acquisitions, eliminate backward production capacity, and improve technology and equipment levels"; at the same time, it is required to restrict government intervention and "prohibit local protection."
It can be seen that the development theme of the photovoltaic industry this year is mergers and acquisitions, eliminating backward production capacity. From a means of means, the role of the market mechanism will be magnified, and the role of the government's "visible hand" will be weakened. Therefore, the possibility that the PV industry wants to receive large-scale loans during the “Golden Sun†period, government subsidies, or want to get the government's full support in the bond market is very small. A good example is the promulgation of the “Notice on Further Improving the Issuance of Corporate Bond Issuance†and the policy of applying electricity subsidies to photovoltaic power generation close to the market.
Can't enjoy the feast again
Large-scale subsidies, loans, and bond market financing with policy backgrounds are a poison for new energy industries such as photovoltaics. Although subsidies to the photovoltaic industry are almost international practices, the amount of subsidies received by Chinese companies is huge. Due to the support of local governments, the pressure on Chinese PV companies to repay loans is much smaller than that of European and American companies. Even foreign companies believe that the government is "paying money" to Chinese counterparts. Ample low-cost capital flows allow companies to relax their vigilance, ignore market demand, and rush to government subsidies. Photovoltaic is still an emerging industry, the market is developing in the gap between traditional energy sources, and the progress of production technology is changing with each passing day. Faced with the market demand created by the government, PV companies that hold low-cost assets will naturally expand their production capacity on the same technical level and grow into a weak industry “giantâ€. When the limited foreign market is eroded and the profits are plummeted, it is discovered that the money should be spent on cultivating the domestic market and technology research and development. According to the MIT Science Review article, the global PV production capacity reaches 60 billion to 70 billion watts, of which China's production capacity accounts for two-thirds, but in 2013 the world's market demand was only 30 billion watts. China's photovoltaic "giant" has exhausted the vitality of the world's photovoltaic market.
This is the consequence of the neglect of the role of the market mechanism in the development of the enterprise, and the government is also blamed on this issue. As mentioned above, the technology of emerging industries is updating rapidly, and the market development is still in its infancy. New technologies that seem to be infinitely bright may be eliminated by the market in the blink of an eye. If the government provides financing facilities for such industries, it will undoubtedly play the role of high-risk investors. The government should put more taxpayers' money into basic scientific research and lower-risk industrial projects, so that the market can play a greater role in determining the advantages and disadvantages of new energy technology companies.