According to Wind data, among the 2014 mid-year report or performance forecast issued by 30 companies of the A-share photovoltaic sector, 27 companies achieved an average net profit of 87.67 million yuan attributable to the shareholders of the listed company, an increase of 658% compared with last year. Accompanied by this, the private placement of companies such as Hairun Solar and Zhonghuan has also attracted the active participation of institutional investors.

However, it cannot be overlooked that the Chinese PV market did not perform well in the first half of 2014. According to the “First Half of 2014 Photovoltaic Power Generation Profile” published by the National Energy Administration, the installed capacity of new grid-connected PV in the first half of the year was approximately 3.3 GW, of which approximately 1 GW was distributed, and in 2014, the target for new PV grid-connected capacity was 14 GW. Distributed to 8GW. In contrast, the new photovoltaic grid-connected capacity in the first half of the year only completed 30.7% of the target. The distributed generation is even lower, only completing 12% of the annual target.

Various capitals have been optimistic about the direction of China's distributed photovoltaic power generation. Since 2013, the country has begun to vigorously deploy distributed power generation projects, and finally introduced a policy on further distributed photovoltaic power generation in early September. Many investment institutions are generally expected to have a blowout-type development of photovoltaic power stations in the fourth quarter.

Some media reports quoted relevant policy makers claiming that the Energy Administration considers the introduction of a heavy quota policy and cooperates with the September policy to try to shake up the PV market. Some institutions believe that the recovery of the domestic photovoltaic industry will be further accelerated by various positive stimulus. The Haitong Securities analysis report believes that plans for new grid-connected or over 13 GW plans this year will reach the target of 15 GW.

Deloitte Partners, a partner of Deloitte Touche Tohmatsu, told Tencent that the dramatic increase in China's PV market since 2013 “is due to the promotion of national policy support”. Policy support will temporarily free some companies from the quagmire, but over-reliance on policies remains the key to the real "recovery" of the photovoltaic industry's untold reliance.

The "recovery" of PV market still depends on policy

The “Photovoltaic Industry Operational Situation in the First Half of 2014” pointed out that the overall situation of China's PV industry in the first half of 2014 was summarized. Although it has continued to recover from the second half of last year, it is still in a state of adjustment and development.

Qi Yang also pointed out that at the same time, China's PV market will continue to develop steadily in the next few years, and there will be no significant increase or decline. On the one hand, the development of international market demand has gradually stabilized. On the other hand, China's domestic PV industry has not experienced major changes in recent years.

Since 2013, government policies have strongly subsidized the driving of the photovoltaic industry to go against the market and provide strong support in connection with photovoltaic power generation, subsidies, and finance. At this stage, the photovoltaic industry entered a period of deep adjustment. In 2013, China's PV installed capacity surpassed Germany for the first time, ranking first in the world. Relevant people in the industry believe that the turning point is mostly the support of national policies.

On the one hand, the state's subsidy policy for the photovoltaic industry is expected to affect the market's attention to the photovoltaic industry; the support of government policies and the expected time of electricity price subsidies, and the speed of issuance of capital loans, are still very uncertain. This will also affect the expectations of investors in the photovoltaic industry.

On the other hand, long-term dependence on policy drivers is not a long-term good strategy. Improvement of policies, reduction of electricity price subsidies, promotion of photovoltaics at the level of prices, and the reliance on policies to promote marketization are the macroeconomic trends faced by photovoltaic companies.

Compared to the optimistic “recovery” expectations, the truly mature path of the Chinese PV market is still a long way to go.

As a large photovoltaic market in China, how to achieve policy-driven market-driven development, breaking the existing excess capacity, effectively developing market demand, and implementing grid-connected power generation still have many practical problems and difficulties.