Photovoltaic power generation is expected to have explosive growth in 2013

In many sub-sectors of emerging industries, new energy sources have received widespread attention from governments, enterprises, and the general public for their broad space for future development and more mature technology. In recent years, every step of its technological innovation, every government support policy has become a hot topic in the market. In the development of new energy in full swing, we specially invited Mr. Li Bo, a new energy researcher from JP Morgan's Emerging Industry Group, and Mr. Huang Shouhong, the best analyst of New Fortune Power Equipment and New Energy Industry in 2010, to look forward to the new development. The energy industry faces investment opportunities.

Photovoltaic industry ushered in the golden development period How far is solar power from large-scale industrialization?

On the investment Morgan Li Bo: technological progress is the basis of new energy industrialization. In recent years, the technological evolution of solar energy has been accelerating, and the cost has also been greatly reduced. This provides good conditions for further industrialization. Take crystalline silicon solar energy, which is currently most widely used in commercial applications, for example, polysilicon consumption has reached 260 degrees per kilogram and can now be reduced to 180 degrees or even lower. The scale of a single production line has also been expanded from the previous 1200 tons per year to 3000-5000 now. Ton/year, the cost has dropped accordingly. Once it costs 80 US dollars per kilogram, the best production line cost is now 25 US dollars, and the future will be even lower.

Securities Co., Ltd. Huang Shouhong: Solar power generation technology mainly includes crystalline silicon battery technology, thin-film battery technology, concentrating power generation technology, and solar thermal power generation technology. The future price of polysilicon still has more than 30% decline. Technological breakthroughs will also bring about changes in the photovoltaic industry. In the future, it is hopeful that a variety of photovoltaic power generation technologies will coexist. The photovoltaic industry will usher in a period of gold development, and affordable access to the Internet will be within easy reach.

What are the supporting policies of the government in solar energy industrialization?

Xinshun Securities Huang Shouhong: At present, the demand for the photovoltaic market is mainly concentrated in Europe. Germany is the first country to implement feed-in tariff subsidies. After the revision of the feed-in tariff method in 2007, it began to detonate the photovoltaic industry. Other European countries such as Italy, the Czech Republic, France, and the United Kingdom have a clear feed-in tariff. In addition to Europe, the future will focus on the United States and China. The U.S. market has huge potential. There is no unified subsidy policy at the national level. Several state governments, such as California, are actively developing the photovoltaic industry. There are also more than a dozen other states that are actively studying PV subsidy policies. The installed capacity in the next few years is expected to grow exponentially.

On the investment Morgan Li Bo: China has adopted feed-in tariff subsidies and gold solar project construction cost subsidies in two ways. In the future, the United States and China will be the two markets with the fastest growth and the largest market capacity. On May 5th this year, Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission of China, stated that by 2015, China’s PV installed capacity target will reach 10 GW, and by 2020, the target will be at least 50 GW. At present, the cost of domestic photovoltaic power generation is about 1.2 yuan/kWh, and the cost of domestic photovoltaic power generation is expected to reach 0.8 yuan/kWh in 2013. Due to lower costs and policy support, we expect domestic demand for PV installations to begin in 2013-2014.

How do electric vehicles support key government support to the demand for new energy vehicles and how does the related industry chain benefit?

Anshun Securities Huang Shouhong: The promotion of electric vehicles will drive the explosive growth in demand for lithium battery-related materials. As an effective means of stimulating the economy and energy-saving emission reduction, electric vehicles have become the focus of government policy support in various countries. As the core component of lithium battery, the industry scale will have more than 100 times growth. At present, China's electric vehicles are in the key stage of demonstration, promotion, and application and industrialization. The demonstration and application of electric vehicles are continuously expanding, and the industry is expected to grow geometrically. We propose to pay attention to the investment opportunities brought about by the introduction of the "New Energy Vehicle Plan." There will be investment opportunities in the relevant industrial chains such as electrolytes, cathode materials, lithium hexafluorophosphate and separators.

Didn't look at the good CBM industry in addition to solar energy, but also what other new energy?

Securities Co., Ltd. Huang Shouhong: The world's biomass power generation originated in the 1970s, and Denmark began to vigorously promote biomass power generation such as straw. Since 1990, biomass power generation has begun to develop in many countries in Europe and America. The total amount of biomass energy that can be used every year in China, such as crop stalks, biogas, and municipal waste, is about 500 million tons of standard coal, and there is huge room for development. In addition, China currently buries 2,000 meters of shallow CBM geology resources of 36.8 trillion cubic meters and 1,500 meters of shallow CBM recoverable resources of 10.9 trillion cubic meters. Therefore, China is rich in CBM resources and is suitable for the development of resources. With a large proportion, the coalbed methane industry has just started and is expected to develop in the future.

On the investment Morgan Li Bo: The status of other new energy sources, such as biomass energy, coal bed methane, etc., is still relatively low in industrialization. CBM, commonly known as "gas," is an unconventional natural gas. It is a high-quality chemical and energy raw material and is the energy that the country encourages to infer. Although China has abundant reserves, its current industrialization faces three major problems. Among them, the most important issue is the dispute over the mining rights of gas extraction and coal mining, which requires the national overall planning and coordination of local governments.