Affected by the three factors of rising electricity price, energy security and power supply guarantee, the overseas household market has exploded, and the demand for photovoltaic and energy storage has been higher than expected this year. This report will focus on this market and explore the sustainability of demand and investment opportunities in this segment. The core conclusion is that the focus of investment is "super prosperity", and we are optimistic about flexible inverters, components and energy storage batteries.
1. Phenomenon: high demand for light storage for overseas households
Background: on the one hand, the mismatch between global fossil energy supply and demand raises energy prices (insufficient production expansion during the epidemic, and the demand resumes growth after the epidemic), resulting in a sharp rise in electricity prices in Europe and other regions; On the other hand, after the Russia Ukraine war, Europe faced the risk of gas cut-off (39% of the EU's natural gas imports came from Russia), and the problem of energy security and stability became more and more prominent. In this case, countries all over the world are eager to get rid of their dependence on fossil energy, the demand for stable power consumption at the residential end is stronger, and the demand for photovoltaic and energy storage installation is also stronger.
Phenomenon: the demand in Europe, Brazil, Australia and other regions dominated by distributed installed capacity remains strong. The installed capacity in Europe may increase by more than 100% in February, while the demand for components in Brazil has also increased by 66% in 21 years. Under the background of high demand for distributed installed capacity, the demand of global household energy storage market also increases.
2. Thinking: how sustainable is the increase of overseas household's high demand for light storage
Photovoltaic:
From the policy side, many countries around the world have raised their new energy installation targets. For example, Germany has raised its annual PV installation target to four times the original. For distributed PV, some countries and regions formulate installation planning or mandatory installation requirements. For example, many states in the United States specify the installation target of distributed PV; Some countries have introduced subsidy policies and preferential tax policies. For example, Poland introduced subsidies and low interest loans for farmers' own power facilities in 2021, and the Netherlands and Italy respectively introduced fixed subsidy policies for commercial or agricultural distributed photovoltaic in 2022.
From the economic side, IRR is mainly affected by three factors: utilization hours, electricity price and installed cost. The utilization hours of various regions are basically stable, while the on grid price of new energy is synchronized with that of traditional energy, and the additional gains such as green power, green card and carbon trading will be superimposed. The electricity fee income of photovoltaic power stations will be increased, thus increasing the rate of return on installed capacity. We estimate that for every penny / kWh increase in electricity price, the IRR will increase by 0.7pct; In addition, the installed cost will also return to the downward trend with the release of upstream capacity such as silicon material. We calculate that for every 1 wool / W decrease in the installed cost, the corresponding IRR will increase by 0.5pct.
We expect that the overseas distributed installed capacity will reach about 75gw in 22 years, with a year-on-year increase of 88%, accounting for 47% (about 35% in 20 years) of all photovoltaic installed capacity.
From the policy side, the relevant policies of many countries include tax credit (Ruyi Dali reaches 110%) and subsidies (for example, the maximum in Spain is 700 euros / kWh), and the allocation cost of household light storage has been reduced.
From the economic point of view, take Germany as an example (the electricity price has increased year after year, reaching 0.32 euros / kwh in 21 years and further increased to 0.36 euros / kwh in January of 22 years). Without considering the subsidy, compared with the annual cumulative electricity charge, the household light storage system will reflect the economy in the 10th year after configuration by storing the excess electricity in the daytime for use at night.
From the perspective of power supply guarantee, taking Australia as an example, the transmission network presents the characteristics of narrow, long and low-density distribution. The independent power grid infrastructure in the areas not covered by the power grid is weak and the coverage area is less; Affected by extreme weather such as forest fires and storms in recent years, the stability and security of power system and the interconnection between power grids in various states are threatened. Therefore, residents can ensure the stability of power consumption by installing household light storage.
3. Investment: which links benefit the most?
Inverter: the high growth of household optical storage and installation drives the demand for optical storage hybrid inverter. At the same time, with the increase of single-chip component power and the emergence of one driven four products, the performance price ratio of micro reverse circuit is significantly improved. Therefore, we believe that the growth rate of energy storage and micro reverse circuit is higher, the market competition is not sufficient, and the profit level is better. Highlight [ Ningbo Deye Technology Co.Ltd(605117) ] (jointly covered with the home appliance group), [Hemai shares], [ Ginlong Technologies Co.Ltd(300763) ], [ Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) ].
Components: focus on recommending integrated component enterprises [Jingke energy] (78% overseas, 33% advantageous market in North America), [ Trina Solar Co.Ltd(688599) ] (62% overseas, 39% advantageous market in Europe), [ Ja Solar Technology Co.Ltd(002459) ] (61% overseas, 36% advantageous market in Europe) [ Longi Green Energy Technology Co.Ltd(601012) ] (overseas accounts for 60%, the dominant market is in the Americas, and distribution accounts for 33%).
Energy storage battery: it is suggested to pay attention to [ Pylon Technologies Co.Ltd(688063) ], which leads the market share in the field of overseas home storage; It is suggested to focus on benefiting from the growth of downstream demand, which is expected to obtain [ Guangzhou Great Power Energy&Technology Co.Ltd(300438) ], [ Eve Energy Co.Ltd(300014) ]. In addition, the high electricity price makes overseas customers have high acceptance of energy storage price. We believe that companies are expected to transmit the price pressure of raw materials through price increase and recover their profitability. [ Pylon Technologies Co.Ltd(688063) ]: the core supplier of overseas home storage (including Sonnen, Segen, etc.), which has a high market share in Germany, Britain, Italy and other countries and regions in 2019. Based on our calculation, the shipment price rose from 1.33 yuan / wh in 21q4 to 1.44 yuan / wh in 22q1. Driven by the increase of shipment price, the company's gross profit margin rose from 23.1% in 21q4 to 27.5%. [ Guangzhou Great Power Energy&Technology Co.Ltd(300438) ]: in 21 years, it has obtained a large number of home storage business orders in Europe and Australia, with more than 100000 sets of home storage battery products shipped, and has successfully become the preferred supplier for head customers such as Sanjing electric and gurewatt. [ Eve Energy Co.Ltd(300014) ]: take a stake in wotai energy (the 5th largest storage system in the world in 21 years) + become a supplier of American integrator powinenergy.
Risk warning: downstream demand is less than expected and overseas trade policy changes; The calculation is subjective and only for reference.
