The Zhitong Finance app learned that on November 29, Shanghai issued “Certain Opinions on Promoting the High-Quality Development of Photovoltaics in New Residential Buildings”. Among them, it is mentioned that in 2023-2025, the scale of newly built residential photovoltaics will exceed 100,000 kilowatts. In 2026-2035, promote integrated demonstration and large-scale and market-based applications of photovoltaic buildings such as photovoltaic films and photovoltaic curtain walls, etc., and build more than 500,000 kilowatts of residential photovoltaics. Societe Generale Securities believes that at present, the domestic BIPV industry is still in the early stages of development, and BIPV still needs to rely on policy enforcement at the current stage of development. Under the guidance of the national top-level plan implementation plan, BIPV policies at the local government level have entered a period of intensive implementation, which is expected to accelerate the expansion of the BIPV market. Related concept stocks: Follett Glass (06865), Xinyi Solar (00968), Xinte Energy (01799), GCL Technology (03800).

Driven by carbon peak and carbon neutrality goals, the “photovoltaic+” model is continuously upgraded, updated, and innovated, and the BIPV concept is gradually becoming well known to everyone, that is, the integration of photovoltaic buildings. In recent years, the trend of cross-border integration between different industries in photovoltaic applications in China has become more and more prominent. The rapid development of the photovoltaic industry has become the general trend and has become a new engine for implementing low-carbon energy transformation. At the same time, the policy side is also encouraging construction enterprises to integrate with clean energy such as photovoltaics, etc., and relevant departments in many parts of the country have introduced relevant support policies.

According to reports, national policies such as the “14th Five-Year Plan” for energy efficiency and green buildings development and “county photovoltaics” have been implemented one after another, BIPV related standards continue to mature, and the domestic construction photovoltaic market is rapidly rising. Currently, over 20 cities in 13 provinces, including Anhui, Zhejiang, Guangdong, Shaanxi, and Jilin, have clarified PV construction subsidy policies to help the BIPV industry.

According to statistics from the Yinchuang Think Tank, in the subsidy policy introduced, Beijing has a subsidy standard of 0.4 yuan/kilowatt-hour (tax included) for all projects that achieve integrated applications of photovoltaic buildings (photovoltaic modules as building components). The subsidy period is 5 years, and the subsidy level is the highest; Hangzhou in Zhejiang Province gives investors a one-time construction reward of 0.1 yuan/watt in other regions except Shangcheng, Gongshu, West Lake, Binjiang, and Qiantang districts. The subsidy level is the lowest.

With the intensive introduction of green building-related subsidy policies in various regions, the economic benefits of BIPV have improved markedly, and it is expected to usher in rapid growth. Relevant agencies had previously optimistically predicted that the total area of urban and rural construction in China would exceed 60 billion square meters, with an additional construction area of more than 4 billion square meters per year. If the BIPV penetration rate of 2% is calculated, the BIPV market space for only new buildings is close to 100 billion yuan each year; and considering the stock of construction renovations, the long-term space of the BIPV market may exceed trillion yuan.

It is worth mentioning that previously there was news of excess production capacity in the photovoltaic industry. In response to this, a relevant person in charge of China's Ministry of Industry and Information Technology recently stated that there is indeed a risk of phased and structural overcapacity in China's photovoltaic industry, but overall it falls within the normal scope of industry development. Currently, the global photovoltaic industry has entered a booming development cycle. At the same time, there have also been cyclical shocks, phased supply and demand mismatches in the supply chain, etc., but the overall PV industry in China is still within a normal range.

Furthermore, some practitioners pointed out that the BIPV sector has gradually become a “happy place” under the impetus of lower cost thresholds. Since this year, it has continued to attract enterprises to expand across borders from time to time, providing new opportunities for construction companies in particular.

Guojin Securities pointed out that the photovoltaic industry is showing an increasingly obvious trend of supply-side improvement due to macro-factors in market financing regulation, as well as central factors such as the industrial cycle, external resources, and capital market sentiment. Events such as the recent emergence of a dynamic inflection point in prices in the industrial chain, the sharp decline in Q3 institutional holdings, and the Q3 performance of leading companies exceeding expectations to verify alpha capability will join forces with these improvements in supply-side expectations to drive a complete recovery and continuation of the rebound in the sector market. Under the current level of industry sector valuations, expectations, and institutional holdings, whether it's volume, profit, or expectations in any part of PE, it is enough to drive considerable stock price increases and even bring about a phased double blow.

Related concept stocks:

Follett Glass (06865): The company announced the results for the first three quarters of the nine months ended September 30, 2023. Operating income was 15.885 billion yuan, up 41.64% year on year; net profit attributable to shareholders of listed companies was 1,969 billion yuan, up 30.86% year on year.

Xinyi Solar (00968): The company is mainly engaged in the manufacture of photovoltaic glass and the development and construction of photovoltaic power plants. The main products include ultra-white solar embossed glass (original sheet and tempered sheet), anti-reflective coated glass and backplate glass, providing photovoltaic glass products to the world's major photovoltaic module manufacturers. Currently, Xinyi Solar has six major photovoltaic glass production bases, which are located in Wuhu City in Anhui Province, Beihai City in Guangxi Province, Zhangjiagang City in Jiangsu Province, Tianjin City, and Malacca City in Malaysia.

Xinte Energy (01799): The company is mainly engaged in the production of polysilicon, the provision of engineering construction contract services for solar and wind power plants and systems, and the operation of solar and wind power plants.

GCL Technology (03800): The company is mainly engaged in manufacturing polysilicon and silicon wafers for companies in the photovoltaic industry, as well as developing, managing and operating environmentally friendly power plants. It is one of the four largest silicon companies in China.