What is the way out for photovoltaic financing in 2014?

August 27, 2019

Abstract At the National Energy Work Conference at the beginning of the year, the National Energy Administration requested 14 new PV installations in 2014. Experts estimate that the target will cost about 140 billion yuan. Financing is a major problem in the development of photovoltaics. Power plant projects in the downstream of the industrial chain have long return periods,...
At the National Energy Work Conference at the beginning of the year, the National Energy Administration requested 14 new PV installations in 2014. Experts estimate that the target will cost about 140 billion yuan. Financing is a difficult problem in the development of photovoltaics. Power plant projects located downstream of the industrial chain have always been a distant area for banks due to their long payback period and high risks. According to industry insiders, the interest rate of banks lending to PV power plant projects is higher than other projects. Due to the state's policies, many banks are welcome to new energy projects, but only PV can't enjoy this treatment. In the face of photovoltaic power plant construction, banks always Push away "to study again."

Experts said that the investment in the power station is good, but because of the inability to obtain guarantees, bank loans are difficult to operate.

Some experts suggest that in this case, you should not only focus on the bank, but also try other financing channels, such as securities, or even foreign investment. However, another part of the experts believe that China's PV is not short of money. The reason why there is no large amount of funds pouring into this field is that the profit model of PV power plants is still unclear. The PV plant's return period is as long as 25 years, much higher than the return period of general financial products. Coordinating the distribution of this benefit or the key to solving the problem of PV financing. Experts said that photovoltaic development requires financial innovation, and it is expected that the form of photovoltaic financing will be more abundant in 2014.

Meng Xianyu, vice chairman of the China Renewable Energy Society, advocates diversification of financing channels. “There are existing banks and securities bond markets, and foreign investment is not excluded.”

"Because the introduction of foreign capital has been widely used in other industries, if the opening continues, the foreign investment in the photovoltaic industry will not be ruled out, but these need to be carried out under the national legal framework." Meng Xianyu said.

However, "foreign investment in photovoltaic power plants is relatively complicated." Meng Xianyu revealed that "especially doing distributed photovoltaic power plants, there are too many troubles, the main ones are the distribution of interests and business model issues. China is a rare land in the world. There is no private country in the house, which creates uncertainty about the distribution of benefits in the project."

Wang Runchuan, manager of JA Solar, said that at present, under the current policy of China, there is no restriction on foreign banks entering China's PV power plants. "There is no precedent because even the Bank of China is not willing to invest in China's PV power plants, not to mention foreign banks. Foreign banks tend to take far more risks than the domestic PV industry considers."

In the eyes of the industry, China is not short of money, but investors are not willing to invest in photovoltaic power plants. Wang Runchuan believes that "the main problem lies in the operation mode of photovoltaic power plants."

“Photovoltaic itself is not short of money, and it has not yet reached the point where it is necessary to introduce foreign capital.” Wang Runchuan explained, “At present, China has sufficient funds to develop photovoltaic power plants. The reason why there is not a large influx of capital is because photovoltaic power plants still lack stability. The return, the risk is still uncontrollable, that is, the return on investment is unpredictable."

"If from the perspective of securities bonds, the yield of photovoltaic distributed power plants should be higher than the bank's deposit and bond interest rates, and the issuance of bonds can be used to issue 25-year bonds, which is equivalent to long-term gains." Meng Xianyu told reporters that "it is OK In order to operate in segments, it is possible that the bond yield in the fifth year is relatively low, so the price is relatively low. The higher the income, the higher the price, and the higher the price, depending on the investor's requirements."

"It is still said that we have better policies to allow investors to save money. The reason why no one is throwing money inside is because of the uncertainty of the policy, and everyone lacks credit." Meng Xianyu said, "Although, currently based on bonds, banks. There are many investment proposals in terms of foreign investment, etc., but the operability is not large."

Hung Hom, chief researcher of the China Energy Economic Research Institute, said: "The financing of the terminal market should be based on financial innovation. It is not a traditional bank financing bond financing, so innovative financial products are needed."

“It can be used as a start-up fund by a large-scale industrial investment fund; as well as asset securitization, with large-scale industrial funds as initial investment, and asset recovery, in the form of recycling and rolling, to ensure sustainable and diversified financing needs every year.” It is said that many private PV companies have sold their power stations, but the funds have not yet been recovered. This can be done as a credit asset securitization and a power plant project into a financial product.


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