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Affiliated companies will survive the photovoltaic winter and will continue for one year.
On November 26, the Ministry of Commerce of the People's Republic of China announced an investigation into the retroactive imposition of anti-dumping duties on imported solar-grade polysilicon from the U.S., South Korea, and the European Union. Industry insiders suggest that if retroactive taxation is implemented, it could severely impact foreign polysilicon firms while indirectly benefiting domestic industries. However, despite governmental efforts to prop up the sector, many companies that once ventured into the photovoltaic industry have already exited. Photovoltaic research firm GTM Research predicts that within the next three years, unless China significantly boosts its planned installed photovoltaic capacity, approximately 60% of current firms might abandon the photovoltaic sector.
Take, for instance, American-listed Chinese PV companies in 2011, which transitioned from profitability to losses, experiencing a sharp decline in revenue year-over-year. Additionally, countries frequently initiate trade disputes to safeguard their domestic PV industries, plunging the sector into a prolonged cold spell. Companies that once participated are now doing everything possible to sell off their stakes or liquidate to exit. For example, Aerospace Electromechanical and its wholly-owned subsidiary Shanghai Shenzhou New Energy transferred shares in Inner Mongolia Shenzhou Silicon, eventually selling the majority stake for 488 million yuan. Despite significant investments in polysilicon, battery cells, components, and photovoltaic power plants in 2007, they now face declining polysilicon markets and must "downsize," as they announced recently.
Similarly, Vosges, primarily known for home textiles, also ventured into the photovoltaic sector during its peak. Recently, Vosges announced plans to sell a 6.4% stake in Bosch Solar for 4.5 million euros. Given falling product prices and the unsustainable economic foundation, the company decided to liquidate its shareholding in Effort PV (50%). Effin PV focuses on producing and selling solar modules. Notably, it's not just smaller companies exiting the photovoltaic industry; major players are also looking for ways to survive, often through selling power plants. Sunflower, for instance, in August 2012, announced the sale of three overseas power stations to improve its asset structure, following an earlier sale of a 20 MW German plant for 50 million yuan. In October and November, multiple large-scale PV power plant sales occurred. Xinda New Materials signed a debt restructuring agreement with Jiangxi LDK, receiving a 14 MW solar power plant project to settle a 140 million yuan debt.
Analysts believe selling power plants can temporarily relieve cash flow pressures, but it doesn't address underlying issues. Industry experts predict the photovoltaic winter may persist for another year. Even global giants like Siemens and Bosch Group plan to withdraw from the PV sector. Lin Boqiang, director of the China Energy Economic Research Center at Xiamen University, stated that this represents a consolidation phase where shrinking markets, overcapacity, and U.S. and EU sanctions on China's PV sector will lead to further company failures next year. Although the Chinese government continues to introduce supportive policies, such as grid integration services and acquiring surplus power at no cost, Lin Boqiang emphasized that slower implementation hampers many firms' survival. Analyst Wang Shengsheng of Minsheng Securities’ PV industry division advised companies to focus on core competencies and optimize operations to enhance product efficiency.
In conclusion, while policy support exists, execution remains slow, and the photovoltaic industry寒冬 will likely persist, affecting both domestic and international players alike.