70% of PV companies exit the market during the year

Regarding the bankruptcy of Suntech Power's subsidiary Wuxi Suntech, the industry believes that although the national and local governments have sent warm winds to frozen PV companies, the photovoltaic giants are actively seeking for survival through various means, but they are short. During the time when the photovoltaic industry picked up hopelessly, the bankruptcy of Suntech marks the arrival of industry consolidation and reorganization.

Suntech Power's Wuxi Suntech bankruptcy incident has not yet completely cooled down, and wind power leader Huarui Wind Power has exposed “accounting mistakes”. According to media reports, a few days ago, Huarui Wind Power announced that the company's 2011 annual report, operating income, operating costs were more than confirmed by the accounting errors of 929 million yuan, 662 million yuan, net profit was confirmed more than 168 million yuan. This means that the company has changed its face in the first year of listing and the final net profit of Huarui Wind Power decreased by 78.3% in FY2011. From a net profit of 2.8 billion yuan in 2010 to a loss of more than 400 million yuan in 2012, the sharp decline in the performance of Sinovel Wind Power is inextricably linked to the current development of the entire wind power industry in China. At present, wind power has surpassed nuclear power, becoming the third largest power source after coal power and hydropower. However, in recent years, the wind power industry suffered a sharp decline due to factors such as overcapacity, incorporation of grids, wind curtailment, and inadequate subsidies for electricity prices.

Like wind power, photovoltaic companies are also experiencing a period of reduced production after a major leap forward. Industry sources pointed out that the number of domestic photovoltaic companies in 2011 was 262, and in 2012 it had dropped to 112. More than half of the companies have exited the photovoltaic industry. Even so, in 2012, the capacity of photovoltaic modules completed in China was still 45 million kilowatts, which was 7 times that of 2009.

The winter of photovoltaic industry will not end in a short period of time. Only by the end of the “Twelfth Five-Year Plan” and the beginning of the “Thirteenth Five-Year Plan” period, the entire industry may have improved, and 2013-2014 will be the key period for the adjustment of the entire industry. Although the global PV market demand will continue to grow steadily in 2013, the global PV production capacity has exceeded 50 billion watts, still far exceeding the overall market demand. This means that unless there is a sudden progress in the process of de-capacity, it is still not possible to digest excess production capacity overnight. It can be seen that the photovoltaic industry will usher in a major reshuffle. During this period of time, well-developed companies will move toward better development, and poorly developed companies will be eliminated, within the photovoltaic industry. The phenomenon of corporate reorganization will occur frequently. Experts in the industry predict that from May to September this year, SMEs with poor ability to cope with risks will collapse in batches, and the closing tide may reach a peak. During 2013, more than half of PV companies may have closed down, and more than 70% of small and medium enterprises have closed down. Enterprises exit the market.