Navigating the New Challenges of Solar Investment: Balancing Power Generation and Electricity Prices

New Challenges in Photovoltaic Investment: Should We Focus on Power Generation or Electricity Prices?

As the new energy sector progresses under the impetus of document number 136, the industry has recognized that the previous investment logic is no longer effective. The uncertainty surrounding electricity prices has become the greatest challenge for current new energy investments. First, the feed-in tariff has shifted from a fixed coal-based benchmark price to a fluctuating market-based price, fundamentally disrupting the old investment model. Second, for photovoltaic (PV) power stations, as soon as the sun rises, all PV stations in sunny areas across the country, whether in Xinjiang or Beijing, begin generating power. Since supply and demand dictate that electricity prices during this time are likely to be at their lowest, this period coincides with the peak generation time for PV modules. This has led to the realization that the previously independent calculations for the early development of new energy stations now increasingly require integration with production and marketing to assess investment value.

The industry faces a critical question: should we prioritize power generation or electricity prices? Is it possible to achieve both? This dilemma represents the most significant impact the electricity market has had on new energy investment. The changes in investment logic will also fundamentally alter the existing criteria for selecting PV stations and disrupt current innovation directions.

Contradiction: High Conversion Efficiency Does Not Necessarily Equal High Project Returns

Under the rules of the electricity market, to achieve higher overall returns, PV stations must strike a balance between power generation and electricity prices. Recent insights indicate that the spot market settlement price for PV stations in Shandong has dropped to only 5.7 cents per kilowatt-hour, less than 0.1 yuan per kilowatt-hour, reflecting a trend common among major PV installation provinces.

From the perspective of electricity supply and demand, to obtain higher electricity prices, PV stations need to adjust their generation curves by reducing output during peak hours and increasing output in the early morning and late evening. In addition to relying on energy storage and other supplementary means, considerations must also be made regarding how PV components themselves can overcome this limitation. Ironically, the PV sector has historically focused its technological innovations on enhancing module efficiency. However, it now appears that higher efficiency, which leads to increased midday generation, actually results in lower electricity prices.

This indicates that for investing companies, calculating project investments is becoming increasingly complex. They need to consider both the levelized cost of electricity (LCOE) and the time-sensitive characteristics of electricity prices, aiming to generate more power during high-price periods. Clearly, achieving this is not simply a matter of pursuing high conversion efficiency in modules; a comprehensive, multidimensional approach is required to ensure responsible investment.

Investment in Power Stations Must Consider Cost-Effectiveness

To analyze from a cost-per-kilowatt perspective, PV investment must assess both initial investment costs and the total energy generated over the entire lifecycle. Among mainstream product types in the industry, TOPCon modules stand out as the most cost-effective option, particularly in high reflectivity application scenarios represented by large desert solar farms.

On one hand, recent bids for various component procurement segments show that TOPCon components are generally priced 0.05 to 0.1 yuan per watt lower than other technological routes. On the other hand, while TOPCon may not have the highest front-side generation efficiency, its generation data is relatively stable and excellent due to factors like bifaciality in most application scenarios. Data from the Daqing solar storage base of the State Power Investment Corporation indicates that, when compared annually, N-type TOPCon components achieve the highest average power generation per watt, exceeding IBC and PERC components by 1.16% and 2.87%, respectively. This is based on the optimal balance of the TOPCon components, with a moderate temperature coefficient and over 80% bifaciality, leading to a back-side illumination percentage as high as 60% under snowy conditions, contributing significantly to back-side generation.

In addition to snow-covered areas, back-side illumination percentages in grassland and other environments can be at least 10%. With China’s plans for solar reclamation in desert regions (2024-2030) aiming for a theoretical installed capacity of 100 billion kilowatts, it is clear that large desert solar farms will be a focal point for future concentrated PV markets. Thus, the bifaciality of PV components remains a critical factor when selecting equipment.

According to the latest data from the authoritative third party InfoLink, the global share of bifacial scenarios is expected to reach 86-88% from 2025 to 2028, approaching 90%. Therefore, when evaluating the power generation performance of PV components, it is essential to consider factors such as temperature and bifaciality.

Tracking High Electricity Price Periods

In addition to evaluating the cost-effectiveness of equipment prices and power generation performance, PV station selection should also focus on the ability to generate power during high electricity price periods. Only by increasing generation during these times can the overall returns of the project be effectively enhanced. This can be optimized through two main approaches: component performance and structural innovation.

From a performance perspective, TOPCon components demonstrate superior generation capabilities under low irradiation, making them highly suitable for the current demand for tracking high electricity prices during early morning and late evening hours. The Daqing test base reports that the duration of irradiation below 800W/m² accounts for over 80% of total irradiation, comprising nearly 60% of annual total irradiation. “Low irradiation performance is crucial, as globally, the time spent at irradiation levels of 1000W/m² is less than 10%,” states Dr. Zhang Yingbin, global market manager of Trina Solar. High electricity prices generally align with low irradiation periods, helping to address the issue of falling electricity prices due to excessive midday generation.

In addition to the components themselves, another method to enhance generation during high electricity price periods is through tracking mounts. Trina Solar’s 2024 tracking release shows that under typical cloudy and sunny conditions, using their smart AI algorithm for tracking can yield generation increases of up to 9.15% and 2.87% compared to astronomical algorithms, with higher generation gains observed during early morning and late evening compared to the daily average. This aligns well with the characteristics of the domestic electricity market and can further boost early and late generation revenues.

Overall, as new energy stations fully enter the electricity market, they will undoubtedly disrupt existing revenue calculation models, further influencing the rules and methodologies for equipment selection. The direction of industry innovation should shift towards the comprehensive returns of electricity quantity multiplied by electricity price, as solely emphasizing the advancement of any single metric often fails to achieve optimal results.