PV ribbon is an important part of photovoltaic modules. Also, we can call tinned copper ribbons. It belongs to the electrical connection part of the component. Applied to the series or parallel connection of photovoltaic cells to play the role of conductive electricity collection. Its quality directly affects the current collection efficiency of photovoltaic modules.
According to the quotation of the photovoltaic industry chain on June 21, the current cost of PV ribbon in photovoltaic modules accounts for about 2.7%, which is relatively small.
1. Classification and technology trend of PV ribbon
Classification of PV ribbon:
1) Application scenarios: PV Tabbing Wire, PV Busbar;
2) Wire thickness: regular ribbon, MBB ribbon, SMBB ribbon, 0BB ribbon;
3) Shape: round ribbon, triangular ribbon, flat ribbon, shaped ribbon;
4) Melting temperature: high-temperature ribbon, low-temperature ribbon;
5) Color: regular ribbon, black ribbon;
N-type battery requirements for PV ribbon:
1) Thin wire diameter: In order to reduce the shading area of the grid lines and reduce the consumption of silver paste, the battery is undergoing technical iterations in the direction of multiple grid lines. Currently, the mainstream wire schemes on the market are MBB (9-10 grid) and SMBB (16-18 grid), and the corresponding mainstream ribbon diameters are about 0.29-0.3mm and 0.25-0.27mm respectively.
2) Low-temperature soldering: HJT batteries require the melting point of the solder ribbon to be below 175°C. Therefore, we need to adjust the composition of the tin alloy layer accordingly.
2. The business model of PV ribbon: light assets + heavy operations
Asset-light:
1) Low capital expenditure: single GW investment is 3-10 million yuan/GW, and the equipment investment payback period is about 2 years;
2) Short production cycle: The production period usually only takes about a week.
Heavy operation:
1) Unaccounted period for raw material procurement: direct materials account for about 94%. Mainly bulk commodities such as copper, tin, and lead, which need to be paid in cash when purchasing;
2) Long payback period: Downstream customers are mainly component factories with high concentrations. The payment mode is generally a 3-4 months account period + about 6 months notes. A single GW occupies 24-27 million yuan of operating funds.
3. PV ribbon market space: the expected demand in 2023 is 182,000-209,000 tons
Assuming that the output of photovoltaic modules is 420-480GW, the unit consumption is about 435 tons/GW. We estimate that the PV ribbon market space in 2023 will be about 182,000-209,000 tons.
As the penetration rate of N-type batteries increases, the proportion of SMBB increases. We expected that the unit consumption of PV ribbons will gradually decrease. However, considering that the PV ribbon design redundancy has been basically eliminated in the process of increasing the main grid in the past few years, the cross-sectional area of the PV ribbon should remain unchanged under the premise that the series resistance remains unchanged. Therefore, we expected that the unit consumption of PV ribbon may remain at around 400 tons/GW in the next few years.
4. PV ribbon industry structure: currently relatively dispersed, and the concentration is expected to continue to increase in the future
The market structure of the PV ribbon industry is relatively scattered, dominated by private enterprises, with a CR5 of 43.1%. Considering that the concentration of components continues to increase, the customers of head PV ribbon factories are mainly head component factories. Under the background of superimposed SMBB, low temperature, black ribbon and other technology iterations, the industry’s leading technology is leading. We expected that the concentration of the PV ribbon industry will continue to increase.
5. PV ribbon profit: It has reached a relatively low level, and the profit of leading manufacturers will be 3-4 yuan/kg in 2022
Since 2017, the unit net profit of PV Ribbon, the industry leader, has fluctuated between 3.2-6.5 yuan/kg. Compared with the historical high of 23.6 yuan/kg in 2013, it has fallen sharply, and the downward space is limited.
In 2022, the net profits of the industry leaders Yubang New Materials and Sharing Technology will be 4.1 and 3.2 yuan/kg respectively. Consider that the current SMBB ribbon has a gross profit premium of 3-5pct compared to the ordinary ribbon (about 3-4 yuan/kg net profit premium). As the penetration rate of SMBB ribbon increases. We expect that the net profit per kilogram of the two companies will gradually increase.
