CITIC SEC: Export restrictions and new industry standards open for comment simultaneously; photovoltaic industry expected to move toward high-quality development

CITIC SEC released a research report stating that the photovoltaic industry is transitioning from homogeneous price competition to a new stage of high-quality development centered on technology and energy consumption. Recently, two policy consultation documents from the Ministry of Commerce and the Ministry of Science and Technology, one external and one internal, aim to delay overseas capacity expansion externally while accelerating the exit of outdated and excess capacity domestically. Through raising technical indicators and implementing export restrictions, the policy side is compressing the survival space for inefficient capacity, and advanced capacity with efficiency and cost advantages is expected to benefit significantly. In terms of investment direction, the report suggests positioning along the following three paths: 1) focus on polysilicon enterprises leading in energy consumption and cost; 2) leading cell and module companies with a high proportion of high-efficiency N-type capacity; 3) equipment companies with technology reserves and layouts in tandem and perovskite technologies. The main views of CITIC SEC are as follows: Events: 1) On October 16, 2026, the Ministry of Commerce and the Ministry of Science and Technology issued Announcement No. 48 of 2026, soliciting public comments on the revision of the "Catalogue of Technologies Prohibited or Restricted from Export in China," proposing to add 40 technologies across three fieldsartificial intelligence, biomedicine, and photovoltaics (including 23 in artificial intelligence, 5 in biomedicine, and 12 in photovoltaics). From the date of the announcement until the official revision and implementation of the Catalogue, pre-export registration management will be implemented for the relevant technologies. 2) On October 16, 2026, the Electronic Information Department of the Ministry of Industry and Information Technology released the draft for comments of the "Normative Conditions for the Photovoltaic Manufacturing Industry (2026 Edition)." On the basis of the substantial threshold increases already made in the 2024 edition, this draft for comments further tightens technical indicators, energy and water consumption, and environmental protection requirements, and adds management requirements such as product spot checks, carbon footprint accounting, ESG disclosure, and supply chain management. This revision establishes both prohibited and restricted exports for three segmentspolysilicon, wafers, and cellswhile also bringing related equipment under management. Among them, five items are prohibited from export: 1) cold hydrogenation fluidized bed process with single-line trichlorosilane capacity 250,000 tons/year; 2) silane fluidized bed process with single-line capacity 20,000 tons/year; 3) wafer preparation technology with thickness 70 micrometers; 4) edge passivation photovoltaic-specific technology used for crystalline silicon cell preparation; 5) perovskite and tandem cell module production technology. Seven items are restricted from export: 1) polysilicon engineering technology with single-line capacity 30,000 tons/year; 2) reduction process with single reduction furnace polysilicon capacity 800 tons/year; 3) monocrystalline silicon rod pulling technology for photovoltaic use; 4) monocrystalline silicon rod machining technology for photovoltaic use; 5) ultra-thin large-size photovoltaic wafer preparation technology; 6) high-efficiency tunnel oxide passivated contact (TOPCon) and high-efficiency back contact (XBC) crystalline silicon cell preparation technology; 7) heterojunction (HJT) crystalline silicon cell preparation technology. Another 17 categories of key equipment are included in management along with the technologies, including cold hydrogenation fluidized beds, silane fluidized beds, reduction furnaces, crystal growth furnaces, slicing and cropping equipment, PECVD/LPCVD, ALD, boron diffusion furnaces, copper electroplating, PVD, slot-die coating equipment, and others. This is not the first time photovoltaic technology exports have been restricted; a similar proposal was made in 2022 but ultimately did not materialize. On December 30, 2022, the Ministry of Commerce and the Ministry of Science and Technology solicited public comments on the revision of the "Catalogue of Technologies Prohibited or Restricted from Export in China," proposing to list "photovoltaic wafer preparation technology" as a restricted export technology. During the comment period, the industry strongly opposed it on the grounds that "wafer technology barriers are not high and overseas alternatives have already been initiated." When the catalogue was finalized and implemented on December 21, 2023, that entry was deleted. Compared with 2022, this revision represents an upgrade in four aspects: 1) the number of entries increased from 1 to 12; 2) the single restricted category was changed to two levelsprohibited and restricted; 3) the covered segments expanded from wafers to polysilicon, wafers, and cells; 4) 17 categories of key equipment were included for the first time. The report believes the fundamental reason for the change lies in the different stage of the industry: in 2022, photovoltaic technology was still iterating rapidly and the industry was in a capacity expansion cycle, so restricting exports would have weakened enterprises' overseas competitiveness; now that N-type photovoltaic technology has matured and China holds an absolutely leading position, export control policies not only restrict overseas technology iteration but also limit overseas capacity increases, and also provide substantial help in resolving the domestic photovoltaic "involution and overcapacity" problem. The draft for comments of the "Normative Conditions for the Photovoltaic Manufacturing Industry (2026 Edition)" is the other hand tightening from the domestic capacity access side. The core consists of three thresholds: 1) Conversion efficiency: for existing N-type TOPCon, HJT, and xBC cells, average conversion efficiency requirements are no less than 25.3%, 25.3%, and 25.6%, respectively, and modules no less than 23.4%, 23.4%, and 23.7%; for new and expanded/modified cells, no less than 26.2%, 26.0%, and 26.6%, respectively, and modules no less than 24.2%, 24.0%, and 24.4%. 2) Energy consumption: for new and expanded/modified polysilicon projects, comprehensive electricity consumption under the trichlorosilane method and silane fluidized bed method is required to be less than 37 and 15 kWh/kg, respectively, and for existing projects less than 49 and 18 kWh/kg, respectively; new silicon rods less than 14 kWh/kg, monocrystalline silicon wafers less than 45,000 kWh/million pieces, and N-type cells less than 3.5 kWh/MWp. 3) For new and expanded/modified projects, a minimum capital ratio of 30% is required, and R&D investment must be no less than 3% of sales revenue and no less than RMB 20 million. The changes in this revision of the photovoltaic manufacturing industry norms go beyond indicator increases; they represent a structural shift in the indicator system. First, a comprehensive shift to N-type with higher indicators: entries for polycrystalline wafers, polycrystalline and P-type monocrystalline cells and modules are deleted, and requirements are listed separately by the three routes of N-type TOPCon, HJT, and xBC, with module thresholds raised from 23.1% to 24.2%, 24.0%, and 24.4%. Second, frontier technologies are included for the first time: efficiency requirements for tandem modules are added (existing no less than 25%, new no less than 27%), and the new-build efficiency requirement for perovskite modules is raised from 15.5% to 20%. Third, the energy consumption assessment method changes: the reduction power consumption indicator used for many years is cancelled, and comprehensive polysilicon electricity consumption is listed separately by two process routes and substantially tightened. Fourth, reliability and management requirements are added: the coupled environmental stress degradation rate of crystalline silicon modules must be no higher than 8.6%, and for the first time industry self-discipline results are used as a reference for inclusion, with requirements not to maliciously delay payment to suppliers. The report believes that the essence of the manufacturing standard revision is to shift the exit of excess capacity from administrative promotion to standard constraints, which helps further leverage the technological advantages of leading enterprises and benefits polysilicon leaders leading in energy consumption and cost, leading cell and module enterprises with a high proportion of high-efficiency N-type capacity, and frontier capacity with tandem and perovskite reserves. Risk factors: Photovoltaic installations growth falling short of expectations; final policy indicator standards being relaxed or implementation delayed; technology iteration falling short of expectations; delayed revenue recognition of overseas orders for equipment companies; etc.