Shi Zhengrong: The era of huge profits in the photovoltaic industry has passed

Although the U.S. Department of Commerce announced on March 20 that the preliminary tax rate for countervailing China's PV products was between 2.9% and 4.73%, the tax rate was lower than the previous industry's forecast of 10%-15%, far lower than the U.S. 7 Photovoltaic companies raised the level of 100% tariffs, and the US Department of Commerce ruled that the stock prices of several Chinese PV companies listed in the United States will rise, but it will not be announced until later this year. What is the final result of the so-called anti-subsidy and anti-dumping investigations? After that, there will be a series of "double reverse" actions in the European market.

On March 28th, “Idol” figure of the photovoltaic industry, Shi Zhengrong, chairman and CEO of Suntech Power, accepted an exclusive interview with the “Huaxia Shibao” reporter and elaborated on relevant issues.

Obama will regret the United States' "double opposition"

“Huaxia Times”: After the US Department of Commerce announced preliminary results on March 20, Suntech’s stock price in New York City rose sharply by 16%, making public opinion generally feel a bit surprised. Is this result predictable?

Shi Zhengrong: My mood has been very stable and will not change with changes in stock prices. I have always believed that we only have market competitors with very competitive manufacturing costs and product prices, instead of alleging that the government subsidies are the so-called government subsidies. Of course, the United States is a country ruled by law and needs to investigate relevant allegations and follow such a procedure. However, after the survey results came out, regardless of the level of the tax rate, I still believe that we do not have any government subsidies. The so-called anti-dumping investigation results will be announced in May, but we have no dumping at all. As listed companies, our reports are open. In the past so many years, our gross profit margin was positive. How could there be dumping?

We believe that the so-called “double-anti” investigations in the United States are harmful to both the photovoltaic industry in China and the United States and its employment population, as well as to the US’s industrial policy of actively promoting the use of new energy. Both sides have no winners. So, President Obama will regret it.

“Huaxia Times”: Although the US anti-subsidy tax rate announced this time is low, the final ruling will include anti-dumping duties. The two tax rates combined together may reach 30%. Will this cause Chinese PV companies to lose their competitive edge in the US market? The results of the US ruling may also trigger a chain reaction in the European market. What do you think about this?

Shi Zhengrong: There is no doubt that it will have a certain impact. As long as there is a tax rate, it will have a negative impact on either side. As an international company, Suntech has manufacturing and supply chains all over the world. How to give full play to the energy of this supply chain and meet the needs of customers in different regions is our long-term goal and development direction.

In the long run, I firmly believe that this industry will continue to thrive. In the past 10 years, we have come to face numerous difficulties. Through technological innovation and the expansion of industry scale, we have reduced the price of solar photovoltaic modules by six times through the continuous development of the supply chain, thus reducing the cost of solar power generation by six times. Although it is still far from success, it is our first milestone to access the Internet at a low price. By 2015, 50% of the world's countries will implement parity Internet access. This time will come. Despite the current hurdles, or even the possibility of such twists and turns, we are full of confidence.

China's new energy policy needs to be adjusted

“Huaxia Times”: Some people say that the best business opportunity in this industry has already been taken away by you. According to the latest news from the market, the spot price of polysilicon continues to decline, and the saturation of the domestic photovoltaic industry market is an indisputable fact. What do you think?

Shi Zhengrong: We can already clearly see the great future of this industry. As a power generation technology, its cost will continue to decline, its advantages will become more apparent in the future, and its competitiveness will continue to increase. However, at present, the panic selling due to excess capacity has caused the entire industry, not just Suntech, to have problems in the supply chain. Some polysilicon manufacturers have suffered losses from the original profits, and many factories have closed down. The slicing plant in the middle of the supply chain was still profitable a year ago and it is now losing or remaining flat.

In short, the entire supply chain is currently in a state of loss or profit. This is an unsustainable situation for an industry. It will eventually return to rationality. When an industry is in the era of profiteering, many capitals will flow in. Once a siege occurs, profits will inevitably decline, leading to low profits or losses. Finally, in the whole industry, some people must give up and leave or regroup, and the relationship between supply and demand will inevitably change.

The era of profiteering in the photovoltaic industry has passed and is returning to gross profit of about 10% to 15% of the manufacturing industry. But don't forget that the photovoltaic industry is a concept of weight-bearing energy, and gross profit, even if only 10%, is very profitable. Now, this industry needs to be slimmed down and it needs to improve its management. Only in this way, this low-margin sunrise industry can achieve sustainable development.

“Huaxia Times”: You recently published an opinion in this newspaper and called on the government to upgrade the development of the photovoltaic industry to a national strategy. Your so-called “national strategy” and internationally-acclaimed “China's solar panel manufacturers have access to national raw materials and finances. What are the similarities and differences between dual support?

Shi Zhengrong: China should use solar energy as a very important power generation technology for comprehensive application and development in energy strategy. China is facing a heavy task of energy-saving and emission-reduction. China, which is in short supply, is increasingly relying on imported oil and gas resources. We have seen that solar power generation technology is already very mature and feasible. It is not only very cheap, but all the technical problems it faces may be solved. The most critical issue now is the policy issue. The government should formulate corresponding policies to incorporate photovoltaic power into the overall layout of the country's energy development and incorporate it into the road map for the development of national power construction. For example, in 2012, the proportion of national photovoltaic power generation could be 1%; with the continuous development of technology, will the national photovoltaic power generation share reach 10% by 2020, and then reach 20%, 30% or even more? Such a road map, government departments should have. With appropriate incentive policies, there will inevitably be social investment, and the government will not have to invest itself.

Now we would rather build a nuclear power plant and would rather spend huge sums of money on importing oil and coal. We also don't think that the importance of photovoltaic power generation is of strategic significance. How China's large-scale photovoltaic industry can fully play its role must be included in the national energy development strategy.

Western developed countries have formulated very specific and differentiated pricing policies based on different conditions in the market, which has greatly encouraged and promoted solar power generation in the country. This move to benefit the country and the people should be actively learned. The "New Energy Law" promulgated in 2006 has no specific electricity price policy support regulations. Even if relevant regulations are provided, if there is no regional, practical sunshine, and no difference in specific users, it is equally difficult to promote photovoltaic power generation. Specific development project implementation. Therefore, China's new energy policy should be adjusted accordingly.

Photovoltaics will become a disruptive power generation technology

"China Times": As far as you are concerned, are there any other concerns?

Shi Zhengrong: At present, media reports on the photovoltaic industry are mostly negative. I think people need warmth and encouragement in winter. The enterprise has undertaken a great social responsibility, not only providing products, but also solving employment. The media's in-depth analysis and discussion of the difficulties facing the company will help guide the society in solving practical problems.

China Times: What kind of predictions are there for the future?

Shi Zhengrong: I firmly believe that after 10 years, photovoltaics will become a subversive power generation technology. At the same time, it should also be noted that the development of any new things will face great resistance, but people will persevere and persevere. Otherwise, there will be no modernization today.