N-type solar cells
N-type solar cells
Business Model Description
The business model includes the R&D, mass production, and commercial sales of N-type solar cells, which mainly comprise HJT cells and TOPCon cells. Compared with the traditional P-type cells, N-type cells can improve energy conversion efficiency and reduce the cost of PV power generation, which has a promising market prospect.
Expected Impact
N-type cells improve the conversion efficiency of solar power and reduce the cost of PV power generation, but the cost is relatively high and the risk of idle capacity in wind and solar power exists.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- China: Shaanxi
- China: Shandong
- China: Gansu
- China: Ningxia
- China: Guizhou
Sector Classification
Renewable Resources and Alternative Energy
China's current energy structure dominated by fossil energy. Fossil energy resources are limited and can release large amounts of carbon dioxide when burt, accelerating global climate change and extreme weather events. Thus, renewable energy is crucial to China's green transformation and energy security.
The proportion of non-fossil energy in total energy consumption should be increased to about 20%. State Council's action plan for carbon peaking stated that wind and solar power generation, biomass power generation and heating should be developed. By 2030, the total installed generation capacity of wind and solar power will reach above 1200 gigawatts. (1)
Renewable energy employs about 32% women, compared to 22% in the energy sector. (2)
The IOAs in the renewable energy sector center around the utilization of solar energy, wind energy, and biomass energy.
The energy endowment and demand follow the contrastive distribution. Hydropower generation is centralized in southwest China, while wind and solar energy are centralized in northern China, which is far away from the centers of consumption in the eastern and coastal areas. Instable renewable energy makes consumption and stable operation of the grid challenging.
Alternative Energy
Solar energy is an important renewable energy source in China. With dramatic cost reduction, China is gradually phasing out subsidy for solar project, posing pressure for PV industry's further development. (3)
China's Energy Work Guidance has set a goal that photovoltaic power generation share in total electricity consumption to reach 11% in 2021. In addition, it highlight the need to further improve the utilization efficiency and the utilization rate of renewable energy including solar power. (4)
A large number of PV power stations are built on barren lands such as western China gobi deserts. The PV panels can reduce evaporation and thus maintain soil moisture. Its ecological restoration effect is remarkable — take lands in Qinghai and Inner Mongolia as examples — they have become suitable for the growth of grassland plants or even crop production. (5)
IOAs in the PV sector center around the application of cells and PV modules.
Solar Technology and Project Developers
Pipeline Opportunity
N-type solar cells
The business model includes the R&D, mass production, and commercial sales of N-type solar cells, which mainly comprise HJT cells and TOPCon cells. Compared with the traditional P-type cells, N-type cells can improve energy conversion efficiency and reduce the cost of PV power generation, which has a promising market prospect.
Business Case
Market Size and Environment
> 25%
The production capacity for N-type solar cells was 14GW in 2020. It will reach 136GW in 2025. (8)
Pvinfolink, The development and prospect for N-type high-efficiency cell.
Indicative Return
15% - 20%
According to the three projects owned by Shanghai Aiko Solar Energy Co., Ltd. and LONGi Green Energy Technology Co., Ltd., the average internal rate for similar projects is 15%-20%.
LONGi Green Energy Technology Co., Ltd.: Its project in Xixian with an annual production capacity of 15GW high-efficiency monocrystalline solar cells has an IRR of 35.60% for the financial investment, and its static payback period is 3 years. (10)
Shanghai Aiko Solar Energy Co., Ltd.: Its project in Zhuhai, with an annual production capacity of 6.5 GW new-generation high-efficiency crystalline silicon solar cells, has an IRR (after tax) of 16.03%. (9)
Investment Timeframe
Short Term (0–5 years)
Shanghai Aiko Solar Energy: The payback period (after tax; construction period excluded) for high-efficiency crystalline silicon solar cells is 4.9 years; the payback period for its construction project in Yiwu is 5.13 years. The mean payback period for multiple projects is less than 5 years. (9)
LONGi Green Energy Technology: The static payback period for its project in Xixian with an annual production capacity of 15GW high-efficiency monocrystalline solar cells is 3.78 years; the static payback period for it 5GW high-efficiency monocrystalline in Ningxia is 3.87 years,. (10)
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
China's current energy structure is dominated by fossil fuel.To lower carbon emission, China needs to further promote renewable energy, including solar. However China is now gradually phasing out subsidy for solar project, posing pressure for PV industry's further development.
Gender & Marginalisation
According to IRENA, in 2018, renewable energy employs about 32% women, compared to only 22% in the energy sector. (12) Many of the poor population still do not have access to renewable energy. (13)
Expected Development Outcome
The investment of N-type cells can continuously improve the cells' conversion efficiency and increase the total amount of lifetime power generation. This will lower solar energy cost and further promote its development
Gender & Marginalisation
The development of N-type cells have potential to lower costs of solar energy, making it more accessible to poor population.
Primary SDGs addressed
7.2.1 Renewable energy share in the total final energy consumption
The share of non-fossil energy in China's primary energy consumption reached 15.9% in 2020. (14)
The "14th Five-year Plan" stated that the share of non-fossil fuel in China's total energy consumption should be increased to around 20%. (15)
Secondary SDGs addressed
Directly impacted stakeholders
People
Planet
Indirectly impacted stakeholders
People
Outcome Risks
The energy density for solar energy is low, so PV systems can take up lots of spaces which could crowd out agricultural land and other economic activities. (16)
Impact Risks
The issue of idle capacity in wind and solar power is prone to repeated occurrences, and significant potential risks exist. (17)
Both TOPcon cells and HJT has higher efficiency compared with PERC, but the cost is still a constraint on N-type cell's rapid development. (8)
Impact Classification
What
The result can be positive, long-term, and large-scale. Investment can reduce the cost of PV-generated electricity, substituting traditional energy for renewable energy and reducing carbon emissions.
Risk
The cost of N-type cells should be further decreased; new energy consumption is under great pressure, and risk exists regarding the idle capacity in wind and solar power.
Impact Thesis
N-type cells improve the conversion efficiency of solar power and reduce the cost of PV power generation, but the cost is relatively high and the risk of idle capacity in wind and solar power exists.
Enabling Environment
Policy Environment
The scale of wind and solar power generation should be increased. The share of non-fossil fuel in China's total energy consumption should be increased to around 20%.
By 2025, intelligent PV product supply capacity should be enhanced. Its application in the green industry, green building, green transportation, green agriculture, rural revitalization and other new areas should be expanded. (24)
Raise the ratio of renewable energy used; support development of wind power and PV power generation, adapt development of water energy, geothermal energy, ocean energy, hydrogen, biomass, and solar thermal energy in power generation to local conditions. (21)
Financial Environment
On February 24th, 2021, NDRC, MOF, PBOC, CBIRC, and NEA issued a notice that stated several financial measures that support renewable energy industry. (27)
R&D and production of electronic materials like new PV materials. The enterprise income tax on an enterprise in an encouraged industry established in western China shall be paid at a reduced rate of 15%. (22)
In 2021, the NDRC published the "Green Technology Catalog (2020)", and required that local governments should provide stronger support to the promotion and application of green technologies, including PV technologies. (23)
Regulatory Environment
The "Renewable Energy Law of the People's Republic of China" promotes the development and usage of renewable energy, increasing energy supply, improving energy structure, ensuring energy safety, and building a sustainable economy and society. (25)
For new construction, reconstruction, and expansion projects: the average photoelectric conversion efficiency of polycrystalline silicon cells and monocrystalline silicon cells (bifacial cells calculated by front efficiency) should not be less than 20.5% and 23%, respectively. (26)
China's solar PV industry system, except for the administrative departments, adopts the self-regulatory mechanism. The self-regulatory institutions include the China Photovoltaic Industry Association (CPIA) and the China Renewable Energy Society (CRES).
Marketplace Participants
Private Sector
Shanghai Aiko Solar Energy, LONGi Green Energy Technology, Tongwei Co Ltd. Public fund companies: E Fund Management, Foresight Fund Management Company, Rosefinch Fund Management, Da Cheng Fund Management. Private equity companies: Hillhouse Capital Group and Yingshui Investment Company. (18)
Government
There are relevant policies in 31 provinces and municipalities, including Shandong, Jiangsu, and Gansu, to support the development of the PV industry. (19)
Non-Profit
China Photovoltaic Industry Association (CPIA)
Target Locations
China: Shaanxi
China: Shandong
China: Gansu
China: Ningxia
China: Guizhou
References
- (1) State Council, 2021, Action Plan for Carbon Dioxide Peaking Before 2030
- (2) IRENA, 2019, Renewable energy: a gender perspective. https://www.irena.org/publications/2019/Jan/Renewable-Energy-A-Gender-Perspective
- (3) CQVIP, Renewable energy power generation through solar photovoltaic-recyclable and clean energy
- (4) National Energy Agency, 2021, Guiding Opinions on Energy-related Work in 2021, http://www.nea.gov.cn/2021-04/22/c_139898478.htm
- (5) China Central Television Business Channel, https://mp.weixin.qq.com/s/2ORooQlg9MDlzsbHGH5xww
- (6) Solarbe Global, https://news.solarbe.com/202107/30/342436.html
- (7) Guangfu.bjx.com.cn, https://guangfu.bjx.com.cn/news/20210308/1140183.shtml
- (8) cls，2021，2022 will be the first year of N-type components industry chain in the next five years or usher in an explosive period，http://news.hexun.com/2021-12-15/204935928.html
- (9) Shanghai Aiko Solar Energy Co., Ltd, Advance Schemes Report on the Non-public Issuance of Stocks by Companies Listed on A Shares (3rd Revision), http://www.cninfo.com.cn/new/disclosure/detail?plate=sse&orgId=gssh0600732&stockCode=600732&announcementId=1211147394&announcementTime=2021-09-25
- (10) LONGi Green Energy Technology Co., Ltd.: Response to Feedback on the Application Document for Public Issuance of Convertible Bonds (Revision), http://static.cninfo.com.cn/finalpage/2021-09-24/1211136005.PDF
- (12) IRENA，https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/Jan/IRENA_Gender_perspective_2019.pdf
- (13) IRENA，https://www.irena.org/newsroom/articles/2018/Aug/Harnessing-the-power-of-renewables-in-refugee-camps
- (14) National Energy Agency, http://www.nea.gov.cn/2021-03/30/c_139846095.htm
- (15) Xinhua News Agency, The Outline for the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035, http://www.gov.cn/xinwen/2021-03/13/content_5592681.htm
- (16) China5e, https://solar.in-en.com/html/solar-2326665.shtml
- (17) Liu Shiyu, Chen Junjie, Analysis and suggestions on new energy consumption situations in the 14th Five-Year Plan, https://guangfu.bjx.com.cn/news/20210918/1177646.shtml
- (18) International Finance News, https://www.ifnews.com/news.html?aid=120205
- (19) Forward Intelligence, https://www.qianzhan.com/analyst/detail/220/211026-94e921f2.html
- (20) Kesolar, https://www.kesolar.com/headline/181817.html
- (21) State Council, Guiding Opinions of on Accelerating the Establishment of a Sound Economic System with Green, Low-carbon and Circular Development, http://www.gov.cn/zhengce/content/2021-02/22/content_5588274.htm
- (22) National Development and Reform Commission, 2021, "Catalog of Industries Encouraged for Development in the Western Region (2020)", http://www.gov.cn/gongbao/content/2021/content_5598119.htm
- (23) National Development and Reform Commission, 2020, Notice on Issuing the Green Technology Catalog (2020), http://www.gov.cn/zhengce/zhengceku/2021-01/08/content_5578253.htm
- (24) Ministry of Industry and Information Technology, 2021, Intelligent PV Industry Innovation Development Action Plan (2021-2025), http://www.gov.cn/zhengce/zhengceku/2022-01/05/content_5666484.htm
- (25) National People's Congress, 2013, Renewable Energy Law of the People's Republic of China (Revision)
- (26) Ministry of Industry and Information Technology, 2013, Standard Conditions for the Photovoltaic Manufacturing Industry, https://www.miit.gov.cn/xwdt/gxdt/ldhd/art/2020/art_051f4d608dd44286a9fc53a84320f103.html
- (27) National Development and Reform Commission, 2021, Notice of Encouraging the Intensified Financial Support to Promote the Sound and Orderly Development of Wind Power and Photovoltaic Power Industries, https://www.ndrc.gov.cn/xxgk/zcfb/tz/202103/t20210312_1269410.html?code=&state=123