The Motivation,Performance And Route Choice Of Vertical Integration Strategy Of Photovoltaic Enterprises

Solar energy has a huge development prospect because of its unique advantages.China has been in the forefront of the world in the field of solar energy application and photovoltaic manufacturing.At present,photovoltaic power generation is uneconomic,and photovoltaic industry is a new industry that relies on supporting and guidance by policy.Facing the global market competition,Chinese photovoltaic enterprises should not only compete in the manufacturing side,but also make continuous investment in the R&D links.Under the general trend of technological progress,quality improvement and cost reduction,how to make the right strategic choice is particularly critical for the sustainable development of photovoltaic enterprises.Nowadays,vertical integration has gradually become a common strategic choice for PV enterprises in China.More and more PV enterprises improve their vertical integration level through investment and mergers and acquisitions.This paper focuses on the vertical integration strategy of photovoltaic enterprises,analyzes the strategic motivation and the impact on enterprise performance and industry development,and discusses the implementation path of vertical integration of photovoltaic enterprise.In order to further exploring the motivation of PV enterprises to implement the vertical strategy,this paper analyzes the theoretical results of previous scholars on the motivation of vertical integration from two ways.One way is in accordance with the PV industry chain and the relationship of supply and demand between the upstream and downstream,constructing a game theory model to analyze the changes of the integration enterprise's production and profit.The other way is the use of mathematical statistics for empirical research,this paper measures the level of vertical integration in accordance with the number of vertical links.Then,the correlation between the degree of vertical integration and business performance is studied by using the variable coefficient panel data model.The above two aspects of research focus on the microlevel of enterprises.In order to analyze the effect of vertical integration on photovoltaic industry,the system dynamics model of ‘Access to Grid at Equal Price' is built,and the dynamic prediction of ‘Access to Grid at Equal Price'schedule is realized by simulating the whole technology and cost progress of photovoltaic industry.Finally,this paper analyses two paths of vertical integration: new investment and external M&A.By constructing the game model of vertical integration of upstream and downstream enterprises,the choice boundaries of the two paths are obtained.The research concludes that: The vertical M&A of photovoltaic enterprises can occupy a larger market share,achieve more total profits,promote the decline of the final product price and increase the total supply of the industry.If considering the R&D effect,integrated R&D can achieve greater output than independent R&D upstream and downstream.Compared with independent R&D upstream and downstream enterprises,the profit margin has increased significantly.The integration level and business performance of most sample enterprises are in line with each other.Positive correlation shows that the implementation of vertical integration can effectively improve business performance.If the annual effective utilization hours of photovoltaic power generation in China is 1400 hours,the goal of ‘Access to Grid at Equal Price'will be achieved by the beginning of 2023.Under the circumstances of high integration level,the cost of photovoltaic industry will be reduced more quickly,which is conducive to the earlier realization of ‘Access to Grid at Equal Price'.The choice of the two paths depends on the comparison between the advantage of variable cost brought by the technological advancement of new capacity and the reduction of investment expenditure by external M&A.The external M&A mode can reduce the overall output of the industry compared with the new investment mode,which is conducive to restraining the growth of capacity scale in the current context of overcapacity.