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16 June 2022

Deluge of Chinese companies investing in heterojunction

The number of Chinese companies entering the solar industry has ramped up since China adopted its dual carbon goal – “peak in 2030, net-zero in 2060” in September 2020. Eleven state-owned enterprises have reportedly entered solar manufacturing of late, with heterojunction manufacturing, glass manufacturing, and rooftop installation being popular segments. The past years have also seen well-established photovoltaic giants expand into other fields, with LONGi entering hydrogen, Jinko entering wind and hydrogen, and with the photovoltaic supply chain becoming more verticalized.

As a general rule the established manufacturers are investing more in TOPCon, while heterojunction is being disproportionately pushed by first time entry combinations of state-owned enterprises with finance, looking to enter the solar industry, with small solar companies that have expertise but not money. Heterojunction is better suited to new companies because it’s a newer technology, which in the past year has had a production equipment supply chain developed to the scale of dozens of GW and beyond. In contrast TOPCon is typically built as an upgrade to existing PERC production lines.

This year, and much of it in the past month or two, we have seen:

  • Zhongli Group investing in a $750 million, 5 GW heterojunction cell and module factory in Fuping.
  • Akcome Technology plans to commission 8.27 GW of cell and 9.4 of module production capacity for heterojunction this year.
  • Risen Energy plans to complete the 5 GW cell, 10 GW module first phase of its 15 GW cell and module heterojunction factory in Ninghai by April 2023 – the total factory will cost $1.75 billion.
  • Haiyuan Composites will build a 600 MW cell production line.
  • Shanxi Coal international has said it has secured land for a 10 GW heterojunction factory, but is still being cautious with its investment due to constant changes in the cost and technical nature of available heterojunction production equipment.
  • Jiedeng Intelligence and Baoxin Technology will embark on a three-phase 18 GW heterojunction cell, 8 GW module factory expansion.

And that’s just a random selection skewed towards the larger announcements – in total some thirty companies have entered the solar industry by investing in factories, and twenty have gone into distributed photovoltaics specifically – China’s residential sector came alive in a big way for the first time last year, pushed by government policy, and Europe has yet to obstruct Chinese imports as its demand skyrockets – though it is now again threatening to do so.

Other large investments from back in 2021 include $1.65 billion from China Resources for a 12 GW cell and module plant in Zhoushan, Zhejiang, which it committed to last year, and Shuifa Group’s commissioned 6 GW cell factory in Shandong.  State Power Investment Corporation plans to make a 5 GW plant with Fujian Juineng Power.

One interesting announcement comes from Jiangxi Hankefan Semiconductor Technology which has completed angel round financing of a few million dollars. This is a budding heterojunction manufacturing equipment and R&D company, which claims it is a leader in silk chemical vapor deposition technology, and will also be promoting hot filament chemical vapor deposition methods. This is a reminder that heterojunction hasn’t been fully figured out – there’s variation in a number of stage processes.

Since our February report on polysilicon, there have also been at least two new, additional entrants into polysilicon – Qiya Group and Qingdian Energy Group. Qiya Group is an aluminum maker which now plans a 200,000-ton factory, the single biggest investment mentioned here at $2.4 billion – equivalent to two-thirds of Qiya Group’s current assets. If (as we think likely) only half of that gets built, and it’s run at 50% capacity utilization, it’s still going to churn out enough for 40 GW of photovoltaics a year. As for Qingdian Energy Group, it plans 100,000 tons for 2023 commissioning. Unlike many new factories, both of these will be in Xinjiang – Western sanctions aren’t the be-all and end-all if China by itself is a third of global solar installations each year, before considering other non-sanctioning markets such as Latin America.

While TOPCon is currently dominant over heterojunction investments, heterojunction will take over through the next five years as a destination for new investment – it is more expensive to make for now in it has several theoretical advantages such as lower polysilicon consumption, high bifacial ratio, and low temperature coefficient, and should generate a twentieth to a tenth more per Watt of rated capacity over a thirty-year lifetime thanks to lower degradation. The other major new trend is Interdigitated Back Contacts (IBC), which can be combined with both heterojunction and TOPCon, and promises mass production of 25% to 26% efficient modules in the next few years.

Mingyang Smart Energy predicts that heterojunction will reach 40% of a 350 GW global photovoltaic market in 2025 – incidentally we at Rethink have much the same expectation for overall market size, at 360 GW that year.

Outside of China, heterojunction is also being pushed by Singapore’s REC – whose managing director said “our future is in heterojunction” this month – and Indian manufacturing investments include heterojunction, on the part of Reliance Industries and others.

Having discussed these mainstream technologies, it is worth stating that perovskites are still mentioned, both in terms of R&D investments by major companies and with pilot production line announcements which probably should not be viewed with total optimism. Perovskites still have the same promise as before but even a materials scientist can only guess when certain remaining technical hurdles will be overcome.