On the evening of July 12, LONGi Green Energy (601012.SH) announced that the company plans to invest 3.206 billion yuan to build a 12.5GW high-efficiency BC cell project, which is expected to be put into production by the end of this year.

The announcement revealed that the company launched its independently developed high-efficiency HPBC 2.0 cell technology (hereinafter referred to as "BC second-generation technology") in the first half of 2024. After thorough research and development, ecosystem construction, and market promotion, the company’s BC second-generation technology is now ready for large-scale mass production.

To accelerate the industrialization of the BC second-generation technology, according to the capacity layout plan, the company plans to invest in the construction of the LONGi Green Energy Photovoltaic (Xixian New District) Phase I project with an annual production capacity of 12.5GW high-efficiency BC cells in Jinghe New City, Xixian New District, Shaanxi Province, with an estimated total investment of 3.206 billion yuan.

Regarding the investment progress of the project, LONGi Green Energy stated that the company has completed the research and development, pilot testing, process design, and equipment selection planning for the BC second-generation technology. Once the project infrastructure meets the production conditions, the installation and commissioning of production equipment will be initiated as soon as possible. The project is expected to start production at the end of 2024 and be fully operational by June 2025.

The announcement shows that of the total investment of 3.206 billion yuan, about 2.749 billion yuan will be for fixed asset investment (including the transformation and utilization of some existing assets), and about 457 million yuan will be for working capital.

Regarding the impact of the project, LONGi Green Energy stated in the announcement that the implementation of the project will accelerate the large-scale mass production of the company's BC second-generation high-efficiency products. With innovative high-barrier technology, it will break the homogeneous competition pattern of the industry, lead the industry’s next-generation technology iteration through forward-looking layout, and further build the company’s long-term sustainable competitive capability and advantages.

However, LONGi Green Energy also highlighted potential risks that the project may encounter in the announcement.

LONGi Green Energy stated that on one hand, if the implementation of the project is affected by adjustments in national or local policies, project approvals, market environment, and other implementation conditions, there may be risks of delay or change in the project implementation. Additionally, under the phased supply-demand mismatch in the photovoltaic industry, the prices in the main photovoltaic industry chain have entered the bottom range. With the rapid elimination of outdated production capacity, the supply-demand structure will improve. If the supply-demand conflict continues for a longer period in the future, it may lead to project returns not meeting expectations.

"Given that the investment and construction of this project will increase the company's capital needs, the company will coordinate fund arrangements, reasonably determine the source of funds and payment arrangements, etc., to ensure the smooth implementation of the project," LONGi Green Energy stated.

Source：Asia-Pacific PV