Policy support solar water heater industry development

On May 10, the Ministry of Industry and Information Technology formally released the "Guiding Opinions on Promoting the Healthy Development of the Solar Water Heater Industry". The suggestion is to cultivate three leading enterprises with an annual output of more than 2.5 million units by 2015. Solar water heaters account for more than 40% of the entire water heater industry, and products with an energy efficiency grade of two or more have a market share of 50%. Compared with the Consultation Draft, the individual indicators of this formal opinion appear to be fine-tuned, and the comments also indicate that the solar energy machine product is expected to be included in the national “CCC” certification management directory in the future.

Leading production and sales standards reduced by 500,000 units

The Ministry of Industry and Information Technology released the consultation draft of this opinion on March 6th. The biggest change in the official opinion is the production and sales target of leading enterprises. The preliminary consultation draft proposes that by 2015, three leading enterprises with an annual output of over 3 million units will be nurtured. In actual opinion, the standard dropped to 2.5 million units. Correspondingly, the industry's top 10 companies accounted for the industry's total production and sales volume has also dropped from the previous 50% to "more than 45%."

Sunrise Dongxiang Secretary Liu Wei told the China Securities Journal that the final release of the opinion that the reduction in the production and sales indicators may be related to the industry's fundamentals. “Sunrise East’s sales target of 3 million units this year is no problem at present, but second-tier companies may only have about 1.5 million units of market sales this year. The Ministry of Industry and Information Technology may start down the indicators of production and sales for the overall situation of the industry. ."

Analysts believe that although the ministries tend to be conservative in their final comments, according to industry growth forecasts, 2015 annual sales of the top three companies in the industry will reach 9 million units will be a high probability event.

In addition to cultivating three key leading companies, the opinions also emphasized that more than 5 enterprises with an annual output of more than 2 million square meters (1 million units) must be cultivated. The proportion of solar water heaters in the entire water heater industry exceeds 40%, and the energy efficiency level is two. The market share of products above the level reached 50%.

Solar industry concentration is expected to increase

At the practical level, the opinion stated that it will make full use of the special funds for renewable energy development, support the promotion of solar water heating systems and products in various places, promote the use of solar energy hot water systems for the protection of housing and government agencies, and encourage the application of high-quality enterprises in the industry. National-level, provincial-level high-tech enterprises and national technology innovation demonstration enterprises; When conditions are ripe, the promotion of complete machine products into the national "CCC" certification management directory.

The relevant analysis believes that 3C certification will adopt a unified package, unified standards, technical regulations and other package solutions to establish assessment procedures consistent with international rules. Including the 3C management catalog plays a major role in promoting the facilitation and liberalization of the solar water heater trade.

The official release of this opinion draft can be said to be long and dry. According to the data from China Yikang, the total retail sales of solar water heaters in 2012 decreased by 32.26% year-on-year, and retail sales decreased by 30.17% year-on-year, while the increase in the company's business performance last year also fell sharply compared with previous years.

The industry believes that the official launch of this draft will clarify the overall performance trend of the solar energy industry in the medium term. Due to the clear support attitude, the government will not rule out adopting centralized purchasing catalogs and other methods to centrally support a group of large enterprises. The fundamentals and concentration of the entire industry are expected to increase.

It is worth noting that the publicity of this opinion coincides with the expiry of energy-saving subsidies. Solar water heaters have long been known to the public for energy conservation, and there are doubts about whether the energy saving subsidies for solar water heaters will continue. Liu Wei told the China Securities Journal that compared to air conditioners, color TVs and other categories, the average amount of subsidy for solar water heaters is only about 150 yuan each, which has limited attraction for consumers. The company can directly distribute profits to consumers through discounts. Coupled with the fact that dealers still have some tactics at the operation level, the company currently tends not to extend the subsidy policy. The industry generally believes that through the energy-saving subsidies, it will not be possible to drive the healthy development of the industry in the long term.