Five major monocrystalline silicon wafer companies promote unified standards to seize the domestic power station market

The alliance of several large monocrystalline silicon wafer companies has another deeper meaning: they hope to grab more module manufacturers and power station customers from polycrystalline silicon manufacturers.

The main components of the photovoltaic industry chain are polysilicon, silicon wafers, ingot pulling, slicing, cells, modules, and power station construction. Currently, approximately 70% or more of the silicon wafer industry in China is controlled by polycrystalline silicon wafers. A large number of battery customers of monocrystalline silicon wafer manufacturers such as LONGi and Comtec Solar are concentrated overseas. This is mainly because overseas customers have high quality requirements, are less price-sensitive than domestic customers, and domestic monocrystalline silicon wafer manufacturers hope to have shorter payment terms (overseas customers have shorter payment terms than domestic customers).

The reason why domestic battery manufacturers prefer polycrystalline silicon wafers is that they feel that the standards for monocrystalline silicon wafers are not as simple as those for polycrystalline silicon wafers, and the overall price of monocrystalline silicon wafers is higher than that of polycrystalline silicon wafers. Li Zhenguo said that the quoted price of the same type of monocrystalline silicon wafers may be about 20% higher than that of polycrystalline silicon wafers; and after the silicon wafers are made into modules, monocrystalline silicon wafers are also 3% to 5% higher than the latter, so domestic module manufacturers are willing to choose polycrystalline silicon wafers.

Importantly, unlike overseas battery and module manufacturers, a large number of domestic module manufacturers also have polycrystalline silicon wafer production capacity, and they need to digest their own upstream silicon wafer production capacity. When selling their own modules, these module manufacturers are also willing to recommend cheaper polycrystalline silicon modules to customers, including Yingli Green Energy, Trina Solar, and ReneSola.

"What is worrying is that a large number of domestic module manufacturers are planning to expand production next year, so the demand for polycrystalline silicon wafers will further increase," said Hou Wentao, a photovoltaic industry analyst at Guotai Junan. "In the past, there were some module or battery manufacturers overseas, and they were also very convenient to supply to Europe; but now, with the continuous enhancement of the overall battery and module manufacturing capabilities in China, some overseas battery and module companies are likely to entrust domestic OEMs in the future, which will inevitably cause monocrystalline silicon wafer companies to lose some customers." For example, Comtec Solar, 77% of its total revenue in 2012 came from customers in the Philippines and Malaysia.

Li Zhenguo said that the reason why overseas customers favor the more expensive monocrystalline silicon wafers is that the power generation efficiency and overall investment return rate of monocrystalline silicon wafers are higher than those of polycrystalline silicon wafers. The sales of P-type and N-type monocrystalline cells made of monocrystalline silicon wafers are 23% and 27%, while polycrystalline cells are around 20%. However, domestic customers are more concerned about the one-time low procurement cost, "so we need to launch products with uniform standards, higher efficiency, and the same price for customers to choose. Of course, it will take some time for domestic downstream customers to accept our positioning products."