Industry Insights | Under the Drive of Carbon Neutrality Policies, What is the Global Development Trend of the Photovoltaic Industry?

Compared to traditional fossil fuels and other clean energy sources, photovoltaic power generation has three major advantages: permanence, cleanliness, and flexibility. Solar energy is a relatively convenient source of clean energy, with abundant resources and easy distributed deployment. Currently, the technology is quite mature, and its widespread application has continuously improved the economic efficiency of photovoltaic power. Power generation does not require mechanical driving components, produces no noise, has stable power generation performance, high safety, simple maintenance, and low maintenance costs.

Photovoltaic power generation is a technology that uses the photovoltaic effect at semiconductor interfaces to directly convert light energy into electrical energy. In simpler terms, when photons from solar energy strike the metal of photovoltaic devices, the light's energy can be absorbed by an electron within the metal. When the energy absorbed by the electron is large enough to overcome the internal gravitational force of the metal and do work, it can leave the metal surface and become a photoelectron.

What does the photovoltaic effect refer to?When light shines on a solar cell and is absorbed at the interface layer, photons with sufficient energy can excite electrons from covalent bonds in both P-type and N-type silicon, resulting in electron-hole pairs. Electrons near the interface layer and holes are separated before recombination by the electric field of space charge. Electrons move towards the positively charged N region, while holes move towards the negatively charged P region. Through the charge separation at the interface layer, an outward measurable voltage is generated between the P and N regions. At this time, electrodes can be added to both sides of the silicon wafer and connected to a voltmeter. The more electron-hole pairs generated by light shining on the interface layer, the greater the current. The more light energy absorbed by the interface layer, the larger the area of the solar cell, and thus the greater the current formed in the solar cell. When many cells are connected in series or parallel, they can form a solar cell array with a relatively large output power.

The key component of photovoltaic power generation is the solar cell. Solar cells are connected in series and then encapsulated for protection to form large-area solar cell modules. These modules are then combined with power controllers and other components to form photovoltaic power generation devices.

In terms of battery cell technology routes, there are P-type and N-type. The raw material for P-type batteries is P-type silicon wafers (doped with boron), while the raw material for N-type batteries is N-type silicon wafers (doped with phosphorus).

Type P batteries mainly include BSF and PERC batteries. Among them, the traditional single-crystal and polycrystalline battery technology is AI-BSF, which is an aluminum backsheet technology used to improve solar cell performance by reducing the surface recombination rate (SRV). The production process of aluminum backsheet battery technology mainly includes seven steps: cleaning and texturing, diffusion and junctioning, etching, preparation of anti-reflection film, electrode printing, sintering, and automatic sorting. The mainstream single-crystal battery technology is PERC technology, short for 'Perovskite Solar Cell'. By attaching a dielectric passivation layer to the back of conventional BSF cells, it aims to reduce photoelectric losses and improve photoelectric conversion efficiency. This technology has a simple manufacturing process and low cost.

The mainstream technologies currently invested heavily in N-type batteries include HJT and TOPCon, as well as PERT, IBC, etc. HJT, also known as HIT (Heterojunction Transistor), is a symmetric double-sided battery structure. In HJT, N-type crystalline silicon is placed in the middle, followed by the sequential deposition of intrinsic amorphous silicon thin films and P-type amorphous silicon thin films on the front side to form a P-N junction. An intrinsic amorphous silicon layer is inserted between the P-N junctions as a buffer layer. TOPCon batteries are tunneling oxide layer passivated contact solar cell structures. The tunneling principle allows one type of carrier to pass through while preventing another type from transporting, thereby suppressing interface recombination. IBC batteries, also known as finger-back contact cells, have the PN junction and metal contact located on the back side of the solar cell, with optimized metal grid electrodes used on the back. They have high conversion efficiency but are more complex in process.

Type N batteries are characterized by high conversion efficiency and a high double-sided utilization rate. Compared to Type P batteries, they have advantages such as low attenuation, good weak light effect, and low temperature coefficients, which help improve the power generation gain throughout the entire lifecycle. Therefore, the industry is currently actively transitioning from Type P technology to Type N technology.

The upstream of the photovoltaic industry chain involves the collection and processing of raw materials, initially processing silicon materials into ingots and rods, which are then made into single-crystalline and polycrystalline silicon. Through a series of processes, silicon wafers are produced. The midstream of the industry chain includes the manufacturing of solar cells, battery modules, photovoltaic components, and the integration of power generation systems. The downstream mainly involves the application of photovoltaic products and systems, including distributed photovoltaics and photovoltaic power stations.

>> Development Trend

New installed capacity growth - continuous expansion of manufacturing scale:In the past 10 years, from 2011 to 2021, photovoltaic power generation capacity has continued to grow rapidly globally, with a global compound annual growth rate of 27.9%. The fastest growth was seen in Asia, with a compound annual growth rate of 48.0%.

Despite the global economic slowdown caused by the COVID-19 pandemic, global photovoltaic new installations still reached 130 GW in 2020, a year-on-year increase of more than 10%, maintaining the largest new power source installation scale globally.

In the global new photovoltaic market, the Asia-Pacific region, including China, Vietnam, Japan, South Korea, etc., accounts for more than 60%, making it the market with the largest proportion of new photovoltaic installations; the United States, as the world's second-largest photovoltaic market, ranks first in the Americas and has a continuously improving outlook for new energy development in Latin America; driven by carbon reduction targets, the European market's demand for solar energy is only increasing and not decreasing, leading to a stable development of the European photovoltaic market; the Central and North African region benefits from its geographical advantages, rich solar resources, and has great development potential for the entire photovoltaic market.

In recent years, China's photovoltaic industry has maintained rapid development. The cumulative installed capacity has ranked first in the world for consecutive years since 2015, with the cumulative photovoltaic capacity approaching one-third of the global total. According to statistics from the National Energy Administration, in 2021, 54.9 GW of new photovoltaic installations were added, bringing the cumulative installed capacity to 306.0 GW, including 25.6 GW from centralized photovoltaic power stations and 29.3 GW from distributed photovoltaic power stations. By the end of 2021, China's cumulative grid-connected photovoltaic power generation capacity was 306.0 GW, including 198.5 GW from centralized photovoltaic power stations and 107.5 GW from distributed photovoltaic power stations. The installed capacity of solar power generation was about 310 million kilowatts, a year-on-year increase of 20.9%.

The industrial focus continues to shift towards China.

Due to the leading technology of Chinese photovoltaic companies in crystalline silicon processes, photovoltaic products have achieved remarkable cost control. Leading photovoltaic companies have continued to accelerate the expansion of their photovoltaic production capacity in recent years. The manufacturing capacity and output share of photovoltaics in the global market have been continuously increasing, further shifting the focus of the global photovoltaic industry to China. In terms of production of polysilicon, silicon wafers, solar cells, and photovoltaic modules, the production capacity in China accounts for a relatively large proportion globally and continues to rise.

The photovoltaic electricity price is on a downward trend.

In recent years, more and more countries and regions have seen photovoltaic power generation prices lower than thermal power generation prices, with global bidding prices for photovoltaic power generation frequently breaking minimum records. In 2020, the winning bid price for a 700MW photovoltaic project in Portugal reached 1.32 US cents/kWh. In 2021, a 600MW photovoltaic IPP project in Saudi Arabia set a new low with a price of 1.04 US cents/kWh, and the downward trend in prices continues.

>>>Carbon emissions continue to decrease

According to the International Energy Agency's statistical disclosure, in 2020, globally, carbon dioxide emissions from energy sources experienced a historic reduction under the combined effect of renewable energy progress. The role of photovoltaics in reducing carbon dioxide emissions from electricity is gradually increasing.

Commercial photovoltaic power generation is developing actively.

More and more countries are adopting commercial photovoltaic power generation models through electricity markets or PPA sales. Photovoltaic power generation on a utility scale is actively developing, bringing affordable and cost-effective electricity to users.

>> Global market drivers

Global Policy - Carbon Neutrality:The Paris Climate Agreement requires that the global average temperature rise be controlled within 2 degrees Celsius above pre-industrial levels, with efforts to achieve a control of 1.5 degrees Celsius. Based on this goal, major global countries have introduced relevant policy measures to reduce greenhouse gas emissions and accelerate the transformation of the energy structure. Countries and regions in most parts of Asia, America, Europe, and Africa have set 'zero carbon' and 'carbon neutrality' climate targets. According to predictions by the International Renewable Energy Agency, by 2050, photovoltaic installations may exceed 14,000 GW. The International Energy Agency has proposed a net-zero pathway, requiring that by 2030, global annual new photovoltaic power generation capacity need to reach 630 GW.

>>>China's Photovoltaic Market Drivers

• Expand the use of clean energy

The strategic development plan for the '3060 Dual Carbon' goal, proposed in September 2020, states that 'carbon dioxide emissions should strive to peak before 2030, and efforts should be made to achieve carbon neutrality by 2060.' The development of renewable energy, such as photovoltaic power, has entered a new acceleration phase. The national 14th Five-Year Plan mentions that by 2025, non-fossil energy should account for about 20% of energy consumption. According to calculations by the National Energy Administration, by 2030, the cumulative installed capacity of wind power and photovoltaic power should reach at least 1.6 billion kilowatts, gradually becoming the main source of electricity in China. During the '14th Five-Year Plan' period, photovoltaic power generation will enter an era of full parity. The market scale and project construction management layout driven and guided by electricity price subsidies need to undergo fundamental changes. The process of reforming the electricity system is accelerating, and renewable clean energy such as photovoltaic power generation is gradually expanding its participation in the electricity market.

• The construction of supporting facilities for photovoltaic power generation is accelerating

1) Promote the grid connection of new energy services

The State Grid has continuously strengthened the construction of new energy grid connection supporting projects. In 2020, it has completed 14 key provincial power transmission channels, put into operation the Zhangbei flexible DC grid test demonstration project, Qingyuyu UHV DC project, etc., to enhance the consumption capacity of new energy and optimize resource allocation on a large scale. The National Energy Administration has actively carried out bidding for new energy projects and declared parity projects. By creating a one-stop service process for grid connection settlement of household photovoltaic power stations, it has improved the grid connection service level of distributed photovoltaics.

2) Strengthening the construction of transmission channels

There are currently 14 power transmission projects in operation, including the completed Haisi-Tala 750 kV line project and the Kucha-Aksu-Bachu II loop 750 kV power transmission and transformation project, which have increased the new energy transmission capacity by more than 12 million kilowatts. The construction of UHV power transmission projects is accelerating. By the end of 2020, the State Grid had cumulatively built fourteen AC and twelve DC UHV power transmission projects, including the Qinghai-Henan 800 kV UHV DC power transmission project, the Zhangbei-Xiongan 1,000 kV UHV AC power transmission and transformation project, and the Zhumadian-Nanyang 1,000 kV UHV AC power transmission and transformation project, with a total UHV DC design transmission capacity exceeding 100 million kilowatts.

3) Advance the construction of pumped storage power stations

By optimizing the operation mode of the power grid, enhancing the transmission capacity of UHV DC power, improving the utilization efficiency of energized equipment, and expanding the storage capacity of new energy generation, the overall system operation efficiency of photovoltaic power grids has been improved.

• The application scenario continues to expand, and the application market accelerates its growth.

At the end of 2021, the Ministry of Industry and Information Technology, the Ministry of Housing and Urban-Rural Development, the Ministry of Transport, the Ministry of Agriculture and Rural Affairs, and the National Energy Administration jointly issued the "Action Plan for the Innovative Development of the Intelligent Photovoltaic Industry (2021-2025)". The plan proposes that by 2025, the intelligent level of the photovoltaic industry will be significantly improved, and breakthroughs will be made in industrial technology innovation, helping various fields achieve carbon peak and carbon neutrality in multiple aspects such as industry, transportation, construction, agriculture, rural revitalization, smart power stations, communications, and intelligent innovation.