“Science and Technology Innovation Board Daily”, December 5 (Reporter Qiu Siyu) On December 4, the 2024 Photovoltaic Industry Annual Conference was held in Yibin, Sichuan.

At the conference's special conference “Overseas PV Market Analysis and Investment Opportunities Seminar”, experts such as Ren Xiaopei, Asia Pacific Director of the Global Solar Energy Council, Si Junyan, Director of the New Energy Business Model and Risk Research Center at Shanghai Electric Power University, Zhou Guanxun, research assistant in the solar energy department of Infolink Consulting, and Fu Yike, head of climate projects at Ruina New International Consulting, discussed in depth the current opportunities and challenges of the photovoltaic industry in the process of going overseas, as well as the development of the photovoltaic industry in the Middle East, Africa and other regions.

Opportunities and challenges for PV companies to go overseas to the Middle East

The Middle East market has always been a popular area for PV to go overseas. Many photovoltaic companies, such as Jingke Energy, Trina Solar, and CITIC Expo, are actively developing the Middle East market. Zhou Guanxun, research assistant in the solar energy department of Infolink Consulting, said at the seminar that large-scale government tenders will drive the development of PV markets in the Middle East and Africa.

According to Si Junyan, director of the New Energy Business Model and Risk Research Center at Shanghai Electric Power University, China's new energy companies have four advantages in the process of going overseas to the Middle East. One is technological innovation and production capacity advantages. The second is global layout and market expansion; the third is policy support, market demand. Middle Eastern policies help the energy structure transformation, and module import demand is rising rapidly; four are costs and economic benefits. PV prices in the Middle East have begun to rise, and power plant revenues have increased economically.

At the same time, the business environment in many parts of the Middle East is also quite open. According to reports, Saudi Arabia is one of the largest economies in the Middle East, and the Saudi government has taken a series of measures to improve the corporate investment environment, such as simplifying registration procedures and reducing corporate taxes. Furthermore, Saudi Arabia has increased investment in infrastructure construction.

Dubai is the economic center of the UAE. The Dubai Government is committed to simplifying administrative procedures, reducing corporate costs, and providing convenience for investors. For example, Dubai has established several free zones that allow 100% foreign ownership and are exempt from corporate income tax and personal income tax.

Admittedly, in the process of going overseas, photovoltaic companies are bound to encounter many challenges, and some international projects have already failed. “In the process of going overseas to the Middle East, photovoltaic companies have a series of legal risks such as intellectual property rights, technology export, and environmental compliance; market risks such as geopolitics and foreign trade barriers where the project is located; and environmental risks such as special natural environments and differences in cultural environments.” Si Junyan said.

According to reports, international EPC projects and domestic EPC projects showed significant differences in various aspects such as model concept, negotiation, and contract execution. For example, domestic EPC projects generally focus on process and price, while international projects pay more attention to process and commerce, as well as cost control.

“When making project budgets, some companies do not fully take into account the high management costs of international projects. In addition, some enterprises have unclear contract price adjustment mechanisms and do not pay attention to risk compliance management throughout the construction process.” Si Junyan admits, “In the process of working on an international EPC project, enterprises still have to do a good job in supply chain management to prevent delays in construction and handle relationships with local workers and trade unions.”

China-Africa energy cooperation heats up, and many companies compete for the African market

With the 2024 China-Africa Cooperation Forum summit, all parties in the market are gradually paying more attention to China-Africa energy cooperation. During the summit, China and Africa reached a number of bilateral energy cooperation results. Ruina New International Consulting anticipates that this will bring an increase of more than 720 MW of renewable energy installed capacity in Africa.

At the “Overseas PV Market Analysis and Investment Opportunities Seminar” of this conference, Fu Yike, head of the climate project at Ruina New International Consulting, conducted an in-depth analysis of the African PV market.

According to her, there are three main models for future China-Africa photovoltaic cooperation: model 1 is to create a friendly business environment for small and medium-sized private enterprises to encourage distributed solar energy projects to develop from the bottom up; model 2 is to develop green industrialization related to solar energy projects, solar product manufacturing, and key minerals; and model 3 is to pilot innovative PPP models to deploy solar power generation projects in Africa.

On the regional side, Fu Yike said that the African countries most suitable for Chinese PV investment include South Africa, Egypt, Rwanda, Zimbabwe, etc.

Currently, many photovoltaic companies, including Longji Green Energy, Jinko Energy, Tianhe Solar, and Jingao Solar, have deployed their offices in the African region. LONGI GREEN ENERGY has set up representative offices in Africa and has laid out utility photovoltaic projects in South Africa, Egypt, Tunisia, Burkina Faso, Togo, and Uganda. According to Ruina's new international consulting statistics, the company's production capacity layout in the above regions is 300+MW, 600+MW, 120MV, 20MW, and 19MW, respectively.

Jinko Energy has deployed regions such as South Africa, Egypt, Kenya, Nigeria, and Zimbabwe. The company's Cape Town solar module plant has a capacity of 120 MW; Trina Solar mainly trades and services through local distributors in Africa, and the layout area includes South Africa, Morocco, Egypt, Kenya, and Ghana.

In terms of other markets, Zhou Guanxun mentioned at this seminar that with the gradual improvement of green power trading, Southeast Asia PV will usher in new opportunities. Jin Feng, chief analyst of S&P Global Clean Energy Technology, said, “South Asia is expected to account for about 6% of the world's total number of new PV installations per year. Furthermore, China's exports of PV modules to South Asia are expected to increase by 50% year over year.”