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Solar Energy

LONGi: Financial net loss in Q3 – more PV modules shipped in 2024

November 14, 2024 ryansheehanrts

LONGi has released its financial report for Q3 2024, showing cumulative revenue of CNY 58.593 billion (770 mio. €)for the first three quarters of the year. The third quarter contributed CNY 20.064 billion (264 mio. €) in revenue, with a net loss attributable to shareholders of CNY -1.261 billion (170 mio. €) reflecting a gradual reduction in losses as the company progresses through a challenging industry cycle and enhances its operational efficiency.

Adapted market strategy and counter measures

In 2024, a supply-demand imbalance in the photovoltaic (PV) industry and intensified price competition have led to the industry’s first collective loss since 2016. In response, LONGi adapted its market strategy and adjusted shipments to manage risks associated with fluctuating supply and demand. For the first three quarters, LONGi shipped 82.80GW of silicon wafers (including 35.03GW for external sales), a decrease of 4.22% year-on-year, while module shipments reached 51.23GW (including 13.77GW of BC modules), a year-on-year increase of 17.70%.

LONGi implemented cost-control measures, reducing management expenses by 34.70% year-on-year to CNY 2.422 billion. This strategic focus on cost efficiency would have bolstered the company’s resilience amid market challenges, LONGi announced.

Continiuous investment in R&D and back contact technology

LONGi has invested over CNY 23.5 billion in R&D over the past five years to enhance core competitiveness and advance its product portfolio. Following the strategic route announced in September 2023 towards BC (back contact) technology, LONGi has introduced several differentiated products to align with market demand.

Previously, BC technology production was limited to less than 1GW annually. In the first half of 2024 Chinese firms, including LONGi or AIKO, have expanded production to nearly 12GW, with BC modules now included in large-scale Chinese procurement bids.

“For twenty years, LONGi has been focused on one thing, which is to make solar power cheaper, easier to use, and safer, so that it can benefit everyone. We always focus on improving photovoltaic conversion efficiency and the safety and reliability throughout the entire life cycle,” said Baoshen Zhong, Chairman of LONGi.

LONGi’s HPBC 2.0 product line further supports this expansion, offering high efficiency and reliability across a range of photovoltaic applications. The adoption of BC technology and the associated laser-based production process reflects a strategic shift toward product differentiation and increased market penetration.

HPBC 2.0 against homogenized competition and industry pressure

In response to industry pressures and to avoid homogenized competition, LONGi launched its high-efficiency HPBC 2.0 technology. With a mass production power rating up to 670W, LONGi’s HPBC 2.0 modules claim to surpass TOPCon modules by over 30W, achieving a mass production efficiency of 24.8%, the highest globally for solar modules according to LONGi.

HPBC 2.0 technology claims to deliver 6% higher power generation than comparable TOPCon products and enhances pre-tax profitability by 15%-20%, according to LONGi. LONGi’s recent releases, the Hi-MO 9 and Hi-MO X10 modules, would incorporate these technological advancements, according to the company.

LONGi sees sustained growth for the photovoltaic industry

LONGi anticipates improvements in the industry landscape as outdated capacity is phased out and some projects are postponed or terminated. The demand for efficient products continues to drive sector growth, with policies supporting further expansion. LONGi projects that the PV industry will achieve stable annual growth of 10%-15%, supported by efficiency gains and high-performing technologies. (hcn)

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Solar Energy

“A company cannot be on hold for a year”

September 9, 2024 ryansheehanrts

Scheper previously concluded that solar panels behave as a seasonal product in ‘normal periods’. As soon as the sun starts to shine, consumers are reminded that energy bills can be reduced by installing solar panels. Usually, a rise in temperature led to an increase in the sale of solar panels.

The fact that this is not the case now is therefore a sign that the solar energy sector is not in a normal period. Despite the fact that the prices are extremely low, sales are still very disappointing. “A year and a half ago, you paid 30 cents per watt peak for a solar panel. Now you can buy an entire installation for that price,” says Scheper.

Also see: Trinasolar reports profitability – 26% more PV modules shipped

Recently media reported that Chinese solar panel manufacturers are suffering large losses. For example, LONGi expects a net loss of 4.8 billion renminbi (about 610 million euros) for the first half of 2024. Tongwei and TCL have a loss of 3 billion renminbi (381 million euros).

Huge losses throughout the supply chain

“Manufacturers are having a really hard time and are incurring huge losses, but you can see this throughout the supply chain. No one is making money from the current situation and companies are now trying to compensate in other ways. Fortunately, the C&I and projects market and batteries still offer some hope,” says Scheper.

Also see: Sungrow – Increased net profit and rising R&D investments

“Some companies are getting into the production of electrolysers for green hydrogen, intensifying the sale of batteries or collaborating more. LONGi used to have a near monopoly in the field of wafers, but has lost a large part of it. Now, thanks to a partnership with DAS Solar, they are back to a market share of 40 percent. Then you may be able to do something about prices autonomously, but of course it remains to be seen how the other 60 percent will react to that.“

Biggest problem still overcapacity

“At the end of the day, the biggest problem remains that there is overcapacity at the moment and that can only be solved with a significant increase in demand or a significant drop in new supply. A relevant increase in demand is not in line with expectations and if a producer shuts down its factory, banks and investors lose their confidence and this party will be over in no time,” says Scheper.

Some time ago, the Chinese government took a first step towards a solution by prohibiting manufacturers from further increasing their production capacity. With the financial resources that are freed up, manufacturers must use them to improve existing product technology and reduce production costs. However, this does nothing to change the current supply surplus and the overpriced stocks.

Two scenarios – both with pain

“In my opinion, there are therefore only two scenarios that will really cause movement in the market again. In the first scenario, a number of large producers go bankrupt, bringing the market to a standstill. The supply is getting smaller and the prices are going to rise again. In the second scenario, a large market player that has large credit limits outstanding with manufacturers collapses. They will then lose money and will be forced to raise their prices,” says Scheper.

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“It’s still a frustrating time. Because of the long-term goals for solar energy, we know that there are still a lot of solar panels need to be installed. Consumer interest and market are currently temporarily ‘on hold’, but a company cannot be on hold for a year.” (GS/hcn)

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