IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v180y2019icp356-366.html
   My bibliography  Save this article

Empirical analysis and strategy suggestions on the value-added capacity of photovoltaic industry value chain in China

Author

Listed:
  • Liu, Jicheng
  • Lin, Xiangmin

Abstract

Energy is the foundation and driving force of modernization. Renewable energy has been developed with the help of global environmental awareness. In recent years, supported by the relevant national industrial policies, China's photovoltaic market has developed rapidly and its production capacity is huge. However, the core of supporting the sustainable development of an industry lies in the continuous appreciation of the value of itself. In order to correctly understand the status quo and problems of PV industry value chain in China, based on the “Smile Curve” theory, taking the gross profit rate of PV industry listed companies as sample variables from 2015 to 2017, the research finds that its value chain shows a gradually deepening smile. And to explore the extent to which gross profit margin is affected by various factors, 15 variables are selected from six aspects: internal innovation power, growth potential, profitability, operational efficiency, scale strength and external environment, the Stepwise Regression method is used to determine the optimal model first. Further use Principal Component Analysis to confirm the motivations affecting the value-added of listed companies in the PV industry in the upper, middle and down reaches. The results indicate that only 6 variables have significant effects on the gross profit margin of the PV industry value chain, and there are big diversities in the main influencing factors of the value-added capacity of PV companies in different links, so they should seek their own value-added breakthroughs.

Suggested Citation

  • Liu, Jicheng & Lin, Xiangmin, 2019. "Empirical analysis and strategy suggestions on the value-added capacity of photovoltaic industry value chain in China," Energy, Elsevier, vol. 180(C), pages 356-366.
    • Handle: RePEc:eee:energy:v:180:y:2019:i:c:p:356-366
    DOI: 10.1016/j.energy.2019.05.100
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544219309776
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2019.05.100?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ruyin Long & Wenhua Cui & Qianwen Li, 2017. "The Evolution and Effect Evaluation of Photovoltaic Industry Policy in China," Sustainability, MDPI, vol. 9(12), pages 1-40, November.
    2. Bin Huang & Rui Xu & Cheng Fu & Ying Wang & Lu Wang, 2018. "Thief Zone Assessment in Sandstone Reservoirs Based on Multi-Layer Weighted Principal Component Analysis," Energies, MDPI, vol. 11(5), pages 1-13, May.
    3. J. Le-Rademacher & L. Billard, 2017. "Principal component analysis for histogram-valued data," Advances in Data Analysis and Classification, Springer;German Classification Society - Gesellschaft für Klassifikation (GfKl);Japanese Classification Society (JCS);Classification and Data Analysis Group of the Italian Statistical Society (CLADAG);International Federation of Classification Societies (IFCS), vol. 11(2), pages 327-351, June.
    4. Bradshaw, Amanda & de Martino Jannuzzi, Gilberto, 2019. "Governing energy transitions and regional economic development: Evidence from three Brazilian states," Energy Policy, Elsevier, vol. 126(C), pages 1-11.
    5. al Irsyad, M. Indra & Halog, Anthony & Nepal, Rabindra, 2018. "Estimating the impacts of financing support policies towards photovoltaic market in Indonesia: A social-energy-economy-environment (SE3) model simulation," Working Papers 2018-09, University of Tasmania, Tasmanian School of Business and Economics.
    6. Rungi, Armando & Del Prete, Davide, 2018. "The smile curve at the firm level: Where value is added along supply chains," Economics Letters, Elsevier, vol. 164(C), pages 38-42.
    7. Wang, Hongwei & Zheng, Shilin & Zhang, Yanhua & Zhang, Kai, 2016. "Analysis of the policy effects of downstream Feed-In Tariff on China’s solar photovoltaic industry," Energy Policy, Elsevier, vol. 95(C), pages 479-488.
    8. Beijia Huang & Juan Zhao & Jingyang Chai & Feng Zhao & Xiangyu Wang, 2018. "Economic and Social Impact Assessment of China's Multi‐Crystalline Silicon Photovoltaic Modules Production," Journal of Industrial Ecology, Yale University, vol. 22(4), pages 894-903, August.
    9. Carstens, Danielle Denes dos Santos & Cunha, Sieglinde Kindl da, 2019. "Challenges and opportunities for the growth of solar photovoltaic energy in Brazil," Energy Policy, Elsevier, vol. 125(C), pages 396-404.
    10. Zou, Hongyang & Du, Huibin & Ren, Jingzheng & Sovacool, Benjamin K. & Zhang, Yongjie & Mao, Guozhu, 2017. "Market dynamics, innovation, and transition in China's solar photovoltaic (PV) industry: A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 197-206.
    11. Namchul Shin & Kenneth L. Kraemer & Jason Dedrick, 2012. "Value Capture in the Global Electronics Industry: Empirical Evidence for the “Smiling Curve” Concept," Industry and Innovation, Taylor & Francis Journals, vol. 19(2), pages 89-107, February.
    12. Zhang, Lingxian & Wang, Jieqiong & Wen, Haojie & Fu, Zetian & Li, Xinxing, 2016. "Operating performance, industry agglomeration and its spatial characteristics of Chinese photovoltaic industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 373-386.
    13. Stephen R. Koontz & John D. Lawrence, 2010. "Impacts of alternative marketing agreement cattle procurement on packer costs, gross margins, and profits: evidence from plant-level profit and loss data," Agribusiness, John Wiley & Sons, Ltd., vol. 26(1), pages 1-24.
    14. Campos-Guzmán, Verónica & García-Cáscales, M. Socorro & Espinosa, Nieves & Urbina, Antonio, 2019. "Life Cycle Analysis with Multi-Criteria Decision Making: A review of approaches for the sustainability evaluation of renewable energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 104(C), pages 343-366.
    15. Dehghani, Ehsan & Jabalameli, Mohammad Saeed & Jabbarzadeh, Armin, 2018. "Robust design and optimization of solar photovoltaic supply chain in an uncertain environment," Energy, Elsevier, vol. 142(C), pages 139-156.
    16. Alin Lin & Ming Lu & Pingjun Sun, 2018. "The Influence of Local Environmental, Economic and Social Variables on the Spatial Distribution of Photovoltaic Applications across China’s Urban Areas," Energies, MDPI, vol. 11(8), pages 1-14, July.
    17. Songi Kim & Bongju Jeong, 2016. "Closed-Loop Supply Chain Planning Model for a Photovoltaic System Manufacturer with Internal and External Recycling," Sustainability, MDPI, vol. 8(7), pages 1-17, June.
    18. Kung, Chih-Chun, 2019. "A stochastic evaluation of economic and environmental effects of Taiwan's biofuel development under climate change," Energy, Elsevier, vol. 167(C), pages 1051-1064.
    19. Gomes, I.L.R. & Melicio, R. & Mendes, V.M.F. & Pousinho, H.M.I., 2019. "Decision making for sustainable aggregation of clean energy in day-ahead market: Uncertainty and risk," Renewable Energy, Elsevier, vol. 133(C), pages 692-702.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ou, Yinlin & Hsiao, Cody Yu-Ling & Chui, Chin Man, 2024. "How does the supply chain market respond to policy shocks? Evidence from solar photovoltaic sectors in China," Renewable Energy, Elsevier, vol. 232(C).
    2. Wang Lai Wang & Marek Kryszak, 2020. "Technological Progress and Supply Base under Uncertain Market Conditions: The Case Study of the Taiwanese c-Si Solar Industry 2016–2019," Energies, MDPI, vol. 13(21), pages 1-25, November.
    3. Yujie Pan & Ke Peng & Hongxia Peng & Jing Zhang & Min Zeng & Changsheng Huang, 2019. "Evaluation Model and Empirical Study on the Competitiveness of the County Silicon Crystal Industry," Sustainability, MDPI, vol. 11(19), pages 1-15, September.
    4. Elzaki, Raga M. & Elrasheed, Mutasim.M.M. & Elmulthum, Nagat A., 2022. "Optimal crop combination under soaring oil and energy prices in the kingdom of Saudi Arabia," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    5. Maria A. Franco & Stefan N. Groesser, 2021. "A Systematic Literature Review of the Solar Photovoltaic Value Chain for a Circular Economy," Sustainability, MDPI, vol. 13(17), pages 1-35, August.
    6. Jing Yu & Jicheng Liu & Jiakang Sun & Mengyu Shi, 2023. "Evolutionary Game of Digital-Driven Photovoltaic–Storage–Use Value Chain Collaboration: A Value Intelligence Creation Perspective," Sustainability, MDPI, vol. 15(4), pages 1-30, February.
    7. Liu, Jicheng & Lu, Yunyuan, 2023. "A task matching model of photovoltaic storage system under the energy blockchain environment - based on GA-CLOUD-GS algorithm," Energy, Elsevier, vol. 283(C).
    8. Maciej Chrzanowski & Piotr Zawada, 2023. "Fraction Separation Potential in the Recycling Process of Photovoltaic Panels at the Installation Site—A Conceptual Framework from an Economic and Ecological Safety Perspective," Energies, MDPI, vol. 16(5), pages 1-10, February.
    9. Zhang, Hengshuo & Li, Shaoping & Cui, Liying & Li, Liping, 2023. "Energy industry advancedization of dynamic evolution and resource-environment decoupling effect: Evidence from China's value chain upgrading," Energy, Elsevier, vol. 283(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ou, Yinlin & Hsiao, Cody Yu-Ling & Chui, Chin Man, 2024. "How does the supply chain market respond to policy shocks? Evidence from solar photovoltaic sectors in China," Renewable Energy, Elsevier, vol. 232(C).
    2. Hao Cai & Ling Liang & Jing Tang & Qianxian Wang & Lihong Wei & Jiaping Xie, 2019. "An Empirical Study on the Efficiency and Influencing Factors of the Photovoltaic Industry in China and an Analysis of Its Influencing Factors," Sustainability, MDPI, vol. 11(23), pages 1-22, November.
    3. Lobaccaro, G. & Croce, S. & Lindkvist, C. & Munari Probst, M.C. & Scognamiglio, A. & Dahlberg, J. & Lundgren, M. & Wall, M., 2019. "A cross-country perspective on solar energy in urban planning: Lessons learned from international case studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 108(C), pages 209-237.
    4. Yiping Liu & Jian Chen & Lingjun Wang, 2020. "Research on Self-Organizing Evolution Level of China’s Photovoltaic Industry Chain System," Sustainability, MDPI, vol. 12(5), pages 1-22, February.
    5. Zhisong Chen & Shong-Iee Ivan Su, 2017. "Dual Competing Photovoltaic Supply Chains: A Social Welfare Maximization Perspective," IJERPH, MDPI, vol. 14(11), pages 1-22, November.
    6. Ruxu Sheng & Juntian Du & Songqi Liu & Changan Wang & Zidi Wang & Xiaoqian Liu, 2021. "Solar Photovoltaic Investment Changes across China Regions Using a Spatial Shift-Share Analysis," Energies, MDPI, vol. 14(19), pages 1-14, October.
    7. Chen, Zhisong & Sun, Ping, 2024. "Generic technology R&D strategies in dual competing photovoltaic supply chains: A social welfare maximization perspective," Applied Energy, Elsevier, vol. 353(PB).
    8. Stöllinger, Roman, 2021. "Testing the Smile Curve: Functional Specialisation and Value Creation in GVCs," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 93-116.
    9. Felipe Moraes do Nascimento & Julio Cezar Mairesse Siluk & Fernando de Souza Savian & Taís Bisognin Garlet & José Renes Pinheiro & Carlos Ramos, 2020. "Factors for Measuring Photovoltaic Adoption from the Perspective of Operators," Sustainability, MDPI, vol. 12(8), pages 1-29, April.
    10. Murat A. Yülek & Gilberto Santos, 2022. "Why Income Gaps Persist: Productivity Gaps, (No-)Catch-up and Industrial Policies in Developing Countries," Journal of Economic Issues, Taylor & Francis Journals, vol. 56(1), pages 158-183, January.
    11. Victoria Kihlström & Jörgen Elbe, 2021. "Constructing Markets for Solar Energy—A Review of Literature about Market Barriers and Government Responses," Sustainability, MDPI, vol. 13(6), pages 1-20, March.
    12. Zhisong Chen & Keith C. K. Cheung & Xiangtong Qi, 2021. "Subsidy policies and operational strategies for multiple competing photovoltaic supply chains," Flexible Services and Manufacturing Journal, Springer, vol. 33(4), pages 914-955, December.
    13. Garlet, Taís Bisognin & Ribeiro, José Luis Duarte & de Souza Savian, Fernando & Mairesse Siluk, Julio Cezar, 2019. "Paths and barriers to the diffusion of distributed generation of photovoltaic energy in southern Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 111(C), pages 157-169.
    14. Coveri, Andrea & Paglialunga, Elena & Zanfei, Antonello, 2024. "Global value chains and within-country inequality: The role of functional positioning," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 382-397.
    15. Meng, Bo & Ye, Ming, 2022. "Smile curves in global value chains: Foreign- vs. domestic-owned firms; the U.S. vs. China," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 15-29.
    16. Zhang, Haoran & Yan, Jinyue & Yu, Qing & Obersteiner, Michael & Li, Wenjing & Chen, Jinyu & Zhang, Qiong & Jiang, Mingkun & Wallin, Fredrik & Song, Xuan & Wu, Jiang & Wang, Xin & Shibasaki, Ryosuke, 2021. "1.6 Million transactions replicate distributed PV market slowdown by COVID-19 lockdown," Applied Energy, Elsevier, vol. 283(C).
    17. Santibañez-Aguilar, José Ezequiel & Castellanos, Sergio & Flores-Tlacuahuac, Antonio & Shapiro, Benjamin B. & Powell, Douglas M. & Buonassisi, Tonio & Kammen, Daniel M., 2020. "Design of domestic photovoltaics manufacturing systems under global constraints and uncertainty," Renewable Energy, Elsevier, vol. 148(C), pages 1174-1189.
    18. Andrea Coveri & Antonello Zanfei, 2023. "The virtues and limits of specialization in global value chains: analysis and policy implications," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(1), pages 73-90, March.
    19. Li, Lili & Taeihagh, Araz, 2020. "An in-depth analysis of the evolution of the policy mix for the sustainable energy transition in China from 1981 to 2020," Applied Energy, Elsevier, vol. 263(C).
    20. Liu, Jicheng & Sun, Jiakang & Yuan, Hanying & Su, Yihan & Feng, Shuxian & Lu, Chaoran, 2022. "Behavior analysis of photovoltaic-storage-use value chain game evolution in blockchain environment," Energy, Elsevier, vol. 260(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:180:y:2019:i:c:p:356-366. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.