Author: PV-Tech

Tesla’s solar panel suppliers have changed rapidly

In the hotly contested Californian residential solar market, new data compiled by ROTH Capital Partners highlights, amongst many data points, that Tesla’s solar panel supply base and suppliers is undergoing a major transition and that it has been changing for several years.

PV Tech has well documented the dynamic US residential market and its key public listed installers, which used to be dominated by SolarCity but since its acquisition by Tesla, sales and business strategies have radically changed in an effort to create a sustainable business, instead of being market share driven.

US market leadership has changed hands in the past year but at the same time installation growth has been hard to achieve for the leading publically listed US installers. 

Tesla’s quarterly solar installation figures have declined rapidly but showed a small upward trend in the second quarter of 2018.

Data compiled by ROTH Capital, highlights that Tesla’s panel supplier base has changed rapidly from the SolarCity days. 

Back in 2016, Kyocera and REC Group had been the main panel suppliers to the company, accounting for 31% and 35% of supply to California installs, respectively. A much smaller share came from two ‘Silicon Module Super League (SMSL) members, Trina Solar and Canadian Solar with 7% and 6%, respectively. 

In that year, the company also sourced panels (only in the fourth quarter) from Hanwha Q Cells and LG Electronics, 1% and 3%, respectively. Unspecified ‘other’ suppliers accounted for 7% of the total through 2016. 
  
However, a lot of changes occurred in 2017.

The chart below shows Tesla’s module suppliers that were used for installations in California since the beginning of 2017 through to May 2018. 

In 2017, the company increased its use of Canadian Solar, Trina Solar and LG Electronics considerably. By year-end Canadian Solar’s share was 15%, while Trina Solar’s totalled 28%, but to highlight the growth, Trina Solar accounted for only 3% of supply in January, 2017 and ended with a share of 33% in December.

In the case of LG Electronics the supply would seem to have been a short partnership, having mainly started strongly in the fourth quarter of 2016, it peaked in February, 2017 (30% of supply) and leaned out significantly by December (2%) and accounted for 14% of supply in 2017.
 
Long-term trusted suppliers, Kyocera and REC Group lost out in 2017 as their shares declined to 4% and 10%, respectively. The others also were whittled down from the 7% share in 2016 to just 1% in 2017. 

But the supplier base has changed again in 2018. Although data is only available through May, the chart highlights that Canadian Solar’s erratic share through 2017, ended abruptly at the beginning of 2018 and only recovered to 2% of the total by May. 

Trina Solar, which had been the largest supplier to Tesla from the second quarter of 2017 saw its share fall from a peak of 45% in October, 2017 to 28% by May, 2018.

Although Hanwha Q CELLS share started relatively strongly in the first quarter of 2017, the chart shows an erratic pattern, similar to that of Canadian Solar. The only difference here is that Hanwha Q CELLS share suddenly bounced back from zero in April, 2018 to 17% in May this year. This is the only supplier to have gained meaningful share through the first five months of 2018.

Tesla’s own modules

However, the most dramatic change comes from within Tesla. Starting in March, 2016 it would seem that panels produced in-house at its Fremont facility (formerly Silevo), which was known to have around 100MW of annual capacity started supplying panels to projects in California. 

This ramped (dark blue line in the chart) through the rest of the year, accounting for an 11% share. However, Tesla’s own panel supply to California installs took a notable dive through May, 2017 but bounced back strongly, peaking in November with a 35% share and share for the year of 18%, which also highlights the capacity constraint of the Fremont production facility. Only Trina Solar had a bigger share (28%) in 2017. 

The supply dramatically changed again at the beginning of 2018, when Tesla’s panel share rocketed to 56% in January and peaked at 64% in April. This could be attributed to panel production finally ramping at the Panasonic managed Gigafactory 2 in Buffalo, New York state. 

Interestingly, reports of some re-tooling at Gigafactory 2 could be reflected in the peaks and troughs seen in 2018, as production levels may have fallen during equipment changes. 

Although still early to be sure, the chart also indicates that Tesla has in the first five months of the current year, narrowed down its panel supplier base, depending very much on its in-house capacity but retaining two SMSL members, Trina Solar and Hanwha Q CELLS as its major external suppliers. 

It should also be noted that Hanwha Q CELLS (Korea) has announced the building of at least a 1.6GW assembly plant in Whitfield County, Georgia. 

Finally a special thank you call-out to Philip Shen, financial analyst at ROTH Capital for sharing the volume of data that also covered companies such as SunPower, Sunrun, Sunworks, SolarEdge and Enphase.

 

Note: The California Distributed Generation Statistics publishes all IOU solar PV net energy metering (NEM) interconnection data from the three large California Investor Owned Utilities (IOUs) which include Pacific Gas & Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E). 

California Distributed Generation Statistics also publishes all IOU data from the California Solar Initiative incentive program and other publicly available incentive program data sets.

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Top-5 solar module suppliers shipped 20GW in first half of 2018

The top-5 module suppliers to the PV industry shipped more than 20GW of modules during the first half of 2018, representing Y/Y growth of 10%.

The analysis, conducted in the past few weeks by the PV-Tech Market Research team reveals the scale to which a select group of module suppliers continues to move away from the chasing pack.

Several years ago, we defined the criteria for being in the Silicon Module Super League (SMSL) as having >4GW shipments annually. Several of the companies in the top-5 exceeded 4GW in the first six months of this year alone.

While the rankings we do at PV-Tech are generally taken as among the most credible today (especially in light of few companies reporting official data these days), the real questions is: what does this mean, having companies exceeding 4GW during 1H’18; and can this be sustained during the second half, given that the Chinese government has essentially spooked its domestic industry in what is now being referred to (in US terminology) as the ‘China 531’ moment-in-time.

This article presents my thoughts on these issues, while touching on China/non-China module supply dynamics in the second half of this year and through 2019. The full analysis is contained in the August 2018 release of the PV Manufacturing & Quarterly report, and will be discussed in full at the forthcoming PV ModuleTech 2018 event in Penang, Malaysia on 23-24 October 2018.

Chinese companies remain in control

Let’s review the top-5 now. Heading the list in number one place was JinkoSolar, by some margin. The actual ranking of the top-5 is as follows:

Regardless of any claims to globalization stimulating 1H’18 shipments by the top-5, what happened in China in the first six months (again!) was a key factor.

We have commented on JinkoSolar’s differentiated value-added in terms of non-China business operations on PV-Tech in the past couple of months, but it is now becoming clear that while the ‘China 531’ effect may have come as a surprise to most of the Chinese PV industry, there were probably a select group that foresaw this a couple of years ago, most notably the likes of JinkoSolar, Trina Solar and JA Solar.

Undertake any adjustment of China end-market consumption in 2H’18, or indeed 2019, and things change of course. Spook investors per China-531, and we have much more dramatic things to consider.

Top of the list here are the China-only cell/module guys, whose disappearance from the industry will be of almost zero consequence to the outside world (except for the impact of their parting-shot in fire-selling inventories, or coming back to life in 2-3 years only to meet the same fate, or offloading trucks of modules to India regardless of safeguard levels).

More interesting here however is what happens now outside China, not just for the five companies of this article, but the industry as a whole.

The reset to global normality post China-531

As normal as things have ever been in the PV industry, long-term drivers in terms of globalization in a post-subsidy environment would appear to have been restored. The fall out in China (mainly through a succession of postponed capacity investments) will rumble on for the rest of 2018, possibly grinding to a halt at year-end when stay-or-go decisions are taken by many Chinese domestic players of the past 3 years.

Expect a whole bunch of gung-ho capacity expansion plans out of China (covering the 2017/2018 period) to be conveniently brushed under the carpet on 1 January 2019. Even those clinging to false optimism during the Intersolar conferences of Europe/US, and stating that expansions will proceed no-come-what, will likely be left to eat humble pie and issue phrases like ‘currently reviewing timing schedules’.

As we noted before, this was inevitable and simply a matter of ‘when’, not ‘if’ as a 100GW industry does not need an extra 50GW overnight, come-what-may.

Investment reality aside, at this point, the focus for module supply is firmly non-China, with Chinese supply of modules being a secondary priority for those intent to be around globally going forward.
We are currently completing our analysis on what is potentially more relevant for the rest of 2018 and the whole of 2019: top-10 non-China-market module suppliers, including their technology mix and bankability. We expect to complete this piece of research within the next couple of weeks.

This topic is implicit across the two days at PV ModuleTech 2018 this year, and the global list of downstream stakeholders coming to this event in Penang in October backs this up completely.

Indeed, not simply the top-10 module suppliers (excluding China demand), but further, the top-10 serving the utility segment. This basically becomes the sub-set of players that will see continued growth, and are the contenders for module supply to large-scale or mega-solar deployment.

How much has technology differentiation helped the top-5 in 2018?

Digging behind the data for the first half of 2018 is actually revealing, in particular when looking at technology. The two issues (shipments and technology) are now inextricably linked.

Each of the top-5 has a slightly different technology-roadmap, ranging from exclusively-mono to mono/multi diversified, and bringing in the potential last-convert to the post-multi PV world of 2019 onwards (Canadian Solar).

While the technology positioning of LONGi is obvious to everyone in the industry, the shift of JinkoSolar from multi-biased (five years ago) to mono-dominant investments of the past 2 years has put JinkoSolar as potentially a global mono supplier that will do more to shift the buying habits of EPCs than any other company in 2019.

However, it is not LONGi that has been instrumental to moving utility solar over to mono. This prize surely goes to JA Solar. Back in 2016, when multi was all the vogue for utility solar (especially outside China), JA Solar was the one company that was pushing mono panels for utility in volume. Others are starting to copy JA Solar’s early push now (JinkoSolar and Trina Solar), as the product mix by 3 of the top-5 (JinkoSolar, Trina Solar, JA Solar) moves ever closer to mono-centric.

Indeed, while there are several factors in the mix, could it be that Canadian Solar’s stoic adherence to the multi-legacy and being almost the lone figure in forecasting a world in which multi kept mono at bay, has finally been shown to be out of touch with market reality?

Not only were third-party shipments from Canadian Solar well below company expectations in 1H’18, the company’s ASPs have been trending at double-digit percentage levels below the likes of JinkoSolar, Trina Solar and JA Solar. The short-term buffer of basement multi wafer prices (through GCL-Poly offloading inventories before impairment charges kick in) is only a tactical benefit, not a strategic goal.

We have been noting the market trends that would accelerate the transition from multi to mono, and China-531 provided just another nail in the coffin for multi. More on this early next week in a separate blog that will explain all, and hopefully finally put rest to the somewhat fake-news that continues to suggest that mono-vs-multi is actually a battle still to be won!

It is almost certain that Canadian Solar will now need to follow the technology path pioneered by JA Solar, then given a rocket booster by LONGi, and subsequently adopted rapidly by JinkoSolar and now Trina Solar (during 2018/1H’19).

Other module suppliers that occupy the lower rankings in the top-10 are also multi-heavy and these companies will be having daily meetings on what to do with existing capacity levels over the next 6-9 months.

The joy of being an EPC today

On the one hand, EPCs are seeing module performance and price levels that they had never expected to happen until at least 2020. While many will think this is all good-news, spare a thought for the project builders over the next 6 months that are potentially building sites whose yield levels could be 10-15% higher, if they made the correct risk assessment on higher performing products.

How appropriate then that the PV ModuleTech 2018 event on 23-24 October in Penang will offer them a 2-day crash-course in module-supplier/technology/quality selection for utility solar in 2019! 

Details on how to attend the event can be found here.

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JinkoSolar claims immunity from industry woes as 2018 shipment guidance remains unchanged

Leading ‘Silicon Module Super League’ (SMSL) member JinkoSolar has reported higher than guided second quarter PV module shipments and reiterated total shipments guidance to be in the range of 11.5GW to 12GW in 2018. 

The SMSL reported total PV module shipments of 2,794MW, up from 2,015MW in the previous quarter and the second highest quarterly record, which was set (2,884MW) in the prior year quarter. The company had previously guided shipments for the second quarter of 2018 to be in the range of 2.4GW to 2.5GW.

Kangping Chen, JinkoSolar’s Chief Executive Officer commented, “We delivered a strong quarter with module shipments hitting 2,794 MW while generating total revenue of US$915.9 million. Leveraging our cutting-edge technologies, strong global sales network, and industry leading cost structure, I’m confident in our ability to generate sustainable profits and growth going forward.”

“Growth during the quarter was strong and we expect this momentum to continue into the second half of the year despite the impact from the new policies issued by the Chinese government on May 31 as shipments to overseas markets are expected to continue growing and account for an increasing proportion of our shipments. We believe these new policies will have a relatively limited impact on our operations over the short-term and are optimistic about our future prospects. We expect demand from Top Runner Program, poverty alleviation projects, local government subsidies, and self-contained DG projects to continue to drive the growth in the Chinese market, especially in regions with ample sunlight and high commercial power prices.”

“We already have good visibility of our order book for the entire year which is predominantly made up of overseas orders to markets which are growing rapidly and will generate significant opportunities ahead. We are taking full advantage of our market leading position and production facility in Florida to expand our presence in the US market. Demand in emerging markets continues to grow, especially in Latin American and the Middle East and North Africa. We are devoting our resources there towards securing large long-term orders through our mature sales network which spans a number of markets there. We believe the Indian solar sector will maintain its long-term growth trajectory despite the short-term impact of recently announced tariffs and will continue to explore opportunities there.”

JinkoSolar reported a lower gross margin of 12.0%, compared with 14.4% in the first quarter of 2018. This was due to Average Selling Price (ASP) declines.

Total revenue in the quarter was US$915.9 million, an increase of 32.7% from the first quarter of 2018.

Gross profit in the second quarter of 2018 was US$110.0 million, compared with US$104.6 million in the first quarter of 2018. Income from operations was US$14.3 million, compared with US$19.9 million in the first quarter of 2018.

Manufacturing update

JinkoSolar said that its nameplate capacities remain unchanged quarter-on-quarter. As of June 30, 2018, the SMSL’s in-house annual silicon wafer capacity remained at 9GW, while solar cell capacity remained at 5GW and solar module production capacity also remained at 9GW.

The company had previously guided wafer capacity would reach 9.7GW in 2018, along with 6GW of cell capacity and 10.5GW of module assembly capacity.

“We continued to develop high-efficiency technologies while optimizing the cost structure of our products,” added Chen. “We made significant progress in improving wafer efficiency and reducing both oxygen content and light induced degradation. We are increasing our mono PREC cell capacity which will reach 4.2GW by the end of year. We are also investing in N type technology, especially HOT double sided cell technology. The falling cost of raw materials and our deep experience in rapidly rolling out new technologies will allow us to further optimize our cost structure going forward and help us increase market share by providing clients with high-efficiency products at cost effective prices.”

Guidance

JinkoSolar expects total solar module shipments in the third quarter of 2018 to be in the range of 2.8GW to 3.0GW, which could be a new company and industry quarterly shipment record.

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PV ModuleTech to showcase top-10 global module suppliers for 2019

Today, there are well above 300 companies operating module assembly lines. This ranges from factories with just a few megawatts of equipment capacity, to multi-GW fabs. Module lines are installed today across all geographic regions, in more than 100 different countries.

However, very few module suppliers can be considered truly global, regardless of how one defines ‘global’ today in the solar industry. (I will take a fresh look at this topic again in the feature.)

The solar industry is now going through a harsh reality-check phase, having been somewhat distorted by what has been happening within China over the past few years; and this is poised to redefine the group of companies that will satisfy non-mainland-China module supply in 2019.

This article takes a closer look at the type of module companies that will be internationally known over the next 12-18 months, and beyond. The research has been done recently by PV-Tech’s in-house market research group, and will culminate in October during the PV ModuleTech 2018 conference in Penang, on 23-24 October 2018.

At the PV ModuleTech 2018 conference in October, the leading international module suppliers will be on stage, outlining their product offerings for 2019. This group of companies, including the likes of First Solar and SunPower, are among the most bankable suppliers to the industry today, and are routinely on the list of approved companies by utility-scale lenders.

Recap on leading global module suppliers

At the start of 2018, we presented our Top-10 Module Suppliers of 2017. Since our (very) early compilation, a few minor tweaks were reported to start-of-year estimates, in particular relating to the quantity of company-branded modules being supplied to the in-house project development work done by some of the companies listed.

The final revised Top-10 for 2017 is actually much better if we call this a Top-12, as this group is well ahead of all others, and there is not much between the ranking positions 10, 11, and 12.

The inclusion of Talesun and First Solar in the above list is crucial, as opposed to looking simply at a top-10 list in which the final few are close in terms of module shipments.

Indeed, companies such as Talesun and Risen are particularly relevant today as China demand sees its much-needed reality-check. There is no doubt that when we look at which of the hundreds of module suppliers headquartered in China will be the ones that can adapt to a global end-market in which China is less significant, then those that have international experience already will be firmly in the driving seat.

It remains a fact that only about 10 Chinese-headquartered module suppliers have been active globally in the past few years. Eight of these 10 companies are shown in the table above. Others have simply outsourced to contract makers in Southeast Asia when shipments to tariff-constrained regions presented themselves as immediate opportunities.

Indeed, Talesun and Risen typically receive less credit globally, compared to US-listed (albeit a dwindling number these days) China-HQ Silicon Module Super League (SMSL) players. However, the focus on utility solar and bringing finance into shovel-ready sites has many similarities to the route taken by companies like Canadian Solar in the past few years.

The most interesting fact from the above table however is that almost two-thirds of all MW shipments in 2017 came from the above module suppliers. And if we confine 2017 demand purely to utility-scale (remove all residential and C&I type installation), we move to above three-quarters.

75% of utility module supply from 12 companies: the real bankable Tier 1 grouping?

Surely this set of companies becomes the first port of call when talking about bankability prospects for utility scale solar? Certainly, these companies feature most on lender’s approved lists – or should do! Perhaps scanning through the other GW-plus suppliers there are obvious contenders to add here, such as SunPower and REC-Solar, but it is hard to get to more than 20 companies that ought to be on non-China utility-scale approved-supplier listings today.

Until now, the solar industry has not cracked the bankable-list conundrum, and this is perhaps one reason why so many EPCs and developers are left to contemplate on supplier choice once sites are fully operational.

PV ModuleTech 2018 to define the market leaders for 2019

Many of the module suppliers shown in the table above (and cited elsewhere in this article) will be at PV ModuleTech 2018, outlining their product offering for utility-scale solar sites in 2019-2020, and explaining the technology and financial metrics that underpin their bankability-status in the industry today. The learning potential for EPCs and developers (including asset owners/managers and O&Ms) is clearly evident.

Indeed, I have taken on the task of providing an independent overview of what we see at PV-Tech will unfold in 2019, once we remove China end-market supply, and the module suppliers in China that will not make the transition from domestic-supply-dominant to overseas-shipment leaders.

Details on how to participate in the PV ModuleTech 2018 event in Penang on 23-24 October 2018 can be found here, including information on how to register to attend.

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Module Quality Forum: What do EPCs and developers want from global module suppliers?

Heading into the PV ModuleTech 2018 event in Penang, Malaysia on 23-24 October 2018, PV-Tech is set to conduct a series of interviews with leading project developers and EPCs, to understand what downstream channels of the utility-scale PV segment are looking for, when choosing PV module suppliers and their respective module technology offerings.

With module supply globally seeing increased contributions now from countries outside China, developers and EPCs across the US, Europe, India, Japan and emerging global markets, are being confronted with greater choice in terms of companies offering modules and technology types that differ from the 72-cell p-type multi products that have dominated utility solar until now.

To address these critical issues – that impact on plant design, quality of build, and energy yields – the forthcoming PV ModuleTech 2018 event is being organized to provide developers and EPCs with a platform to explain their needs, while hearing from the leading global module suppliers of 2018-2020.

Ahead of the PV ModuleTech 2018 event, PV-Tech is featuring key-company interviews with some of the EPCs and project developers that will be speaking and attending the event, in order to learn what issues are facing downstream utility companies today, and what they need from module suppliers to ensure that utility plants are designed optimally with minimal risk, while delivering maximum return-on-investment to site owners.

Before we hear from the companies making the decisions on module-supplier and module-technologies for global utility projects going into 2019, I will address in this article some of the disconnects seen today with the propositions from module suppliers and the buyers of the modules, while considering what, if any, the impact of new module offerings (bifacial, half-cut, shingles/singulated-cells concepts) will be on utility-scale solar in the next 12-18 months.

Historical copy/paste cookie-cutter site-design tactic nearing its end-of-life

Being a planner (either outsourced or in-house by project developers) of large-scale solar farms in the past few years has been a relatively easy task!

Often, more time has been spent on working out how to rehome great crested newts, than factoring in the impact of the latest module technologies and their impact on the structural layout of modules/inverters, and upside delta on site yields. The only major change in plant layouts has come from the shift from 60 to 72-cell modules, higher operating voltages and higher adoption of string invertors.

In fact, the dearth of 72-cell p-type multi modules being offered simply meant that panel dimensions on call-out boxes in site layout plans, were accompanied by text that would read ‘indicative module layout/dimensions’, knowing that the final developer/EPC would then have the choice to drop in the 72-cell panel of choice from across multiple module supply channels. To a lesser degree this even extended to one of the thin-film champion developers of recent years, Belectric.

This preponderance of me-too products, from so many channels, may actually be one of the key factors behind the number of solar parks underperforming today.

So many developers and EPCs seemed to be of the opinion that because this module type was in such widespread supply, it implied that the technology was both mature and dependable. In this way, it was much easier to justify driving down site capex, while creating somewhat of an auction across module suppliers when sites approach the build phase.

At the extreme end of this, we have the Indian market which today epitomizes the above narrative. Ultimately, component supply and site capex is of course a trade-off between upfront costs and how much sites can be sold for when it comes to flipping to the institutional investment sector.

Performance over 20-30 years, site yields and ensuing costs to fulfil IRR’s sadly have no compromise in this regard; time-and-again, the conversations with asset owners and O&M’s in the past few years have sounded like a broken record when reflecting on module choice enacted prior to their acquisition phase.

Where is the system letting down asset owners, and can it be fixed easily? This would perhaps be the most mature place to start; to identify the gaps in the system that allow multi-MW sites to be populated with modules that can barely perform over 2-3 years, far less 20-30 years.

Plenty want to bury the fact that so many solar plants are underperforming today, as though this would be an indication that the industry was short-changing its funders (government, state or city-based). However, to a man, virtually all of these stakeholders would like nothing more than knowing how their future investments can outperform prior rounds of financing, and that the solar industry as a whole recognizes that module inspection, certification and testing is not just a bean-counting exercise, but a channel through which everyone can get their act together professionally.

OK, so now we have untried and untested modules coming on the market!

One can sympathise with asset owners today, when they are now starting to see module suppliers offer the next-best-thing after 72-cell utility-based p-type multi modules, to EPCs and developers that are lining up future portfolios of built solar farms.

The manufacturing sector seems to have hit the technology-upgrade button, almost overnight.

It is no longer simply p-type multi modules flooding the market; there is now mono-PERC, and thrown into the mix bifacial modules, half-cut cells and shingled products. (Note – the shingles term is actually a misnomer, as the correct assignation should be singulated cell strips, but for now this is not a big deal.)

For sure, many developers and EPCs are confused. Which of the new product types – and companies supplying them – are actually offering a higher spec product that has inherently lower degradation and lower risk than products of yesterday? And which – despite what it says on the tin – just need to be sidelined until there is field data to show real-world performance?

Knowing the answers to these questions is probably what will differentiate the solar farm builders globally over the next 12-18 months, and right now, everything leading into the PV ModuleTech 2018 event is being configured to have an independent platform to allow rational decisions to be made by EPCs and developers. And not to mention informing the asset owners of today’s multi-GW portfolios that can ultimately influence the lenders about component choice they need to pass down to the EPCs on-site.

Within the overall mix of higher performing products (let’s classify by stated panel powers at STC here), there are some excellent choices to be made. For example, the move from multi to mono is intrinsically advantageous from a degradation standpoint; and the use of glass-glass modules (mono or bifacial) has many benefits also. And on the thin-film side, moving from a First Solar Series 4 to Series 6 panel size opens up plant capex benefits that are highly-positive from a return-on-investment standpoint.

In short, the world is moving inevitably away from me-too 72-cell p-type multi modules to a mix of higher-performing and potentially more-reliable offerings. It is now down to the module suppliers to explain clearly what they are offering, to the third-party testing/auditing/certification labs to undertake the appropriate analysis of the companies/products, and of course to the EPCs/developers/owners to be adequately tooled to make qualified judgements.

Exception-not-the-norm summary statement needs to be turned upside-down

Despite the FiT driven residential early-adoption of solar, and the sustainability-motivated holistic approach from the corporates operating with acres of empty flat rooftops, the 100-GW-climate of the PV industry today is a utility-driven institutional-motived asset class that fulfils global energy needs in a post-fossil-fuel world.

As such, the importance of plant return-on-investment becomes the single most important metric judging the success of the solar industry as a whole. Therefore putting built utility-scale plants under the microscope is fully justified and essential to move performance levels forward.

There are hundreds of well-build, reliable and target-fulfilling solar plants in operation today, with asset managers and O&Ms monitoring, optimizing and maintaining energy yields. However, they are still outnumbered by the plants that see teething problems almost from the off. Flipping this ratio around is now the next big challenge of the industry, so that underperforming sites become the exceptions.

Over the next couple of months on PV-Tech, we will hear the views of EPCs, developers and asset owners/managers, pulling together a wish-list to the module supply community about the need for transparency in terms of product certification and reliability testing, down to factory operations and bill-of-materials. This wish-list will then become the basis of the talks and presentations delivered by relevant stakeholders at the PV ModuleTech conference in Penang, on 23-24 October, 2018.

Anyone wishing to contribute to the series of articles on PV-Tech can email me direct here. To sign up to attend and participate in the PV ModuleTech 2018 event, please visit our webpage here.

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First Solar’s Series 6 module ramp-up constraint issues, explained!

In reporting second quarter 2018 financial results, First Solar revealed that it was having Series 6 production issues at its lead Ohio factory.

The company took the time in its earnings call with analysts to detail the problems, which centred around a yield issue at a specific tool/process at the upstream cell level, that then impacted downstream assembly throughput, aggravated by insufficient buffer stations. 

Not surprisingly, and I would not blame them, First Solar’s management did not reveal the specific tool and therefore cell process that was giving them yield issues. However, the yield issue led to shutting down of specific tools to diagnose, fix and recalibrate before testing and restarting that production step.

In the earnings call, Mark Widmar, CEO of First Solar said, “We have a single point of failure on the production line today.”
It is also important to note at this time that the Ohio factory is still in initial ramp-up mode with the first iteration of a complete new toolset for the large-area Series 6 modules. This is not mature production line(s) and the ability to make a perfect ramp to full nameplate capacity with everything new would be seriously impressive but unlikely.

Theory of constraints

In the typical linear thin-film module manufacturing flow, rather than batch-based flow where steps are generally isolated and have buffer stations, a single point of failure as Widmar described can create bottlenecks or throughput constraints before and after the point of failure.

“If that tool goes down, everything upstream is shutting down and we’re starting the downstream processing, right? So, that tool is critical because it’s a single point of failure. We have to have the availability and we’ve identified where those points are and what we’re going to do is we’ll buffer it with inventory. So, if the particular tool goes down, we aren’t starving the balance of the production and we can continue to run the production as an example, right?

In other words, the throughput impact of First Solar’s single point of failure (yield issue) at the specific tool can be reduced significantly if a sufficient amount of in-spec modules are produced and stored (buffer) so that the next steps are not starved of semi-completed modules so the final steps to complete modules can operate to their cycle time and throughput requirements.
 
The impact was and can be significant. Management noted that when the point of failure occurred, capacity would go from almost 100%, straight down to 20%.

This was certainly an unexpected point of failure as First Solar is rushing to provide enough buffer stations in the manufacturing flow to minimize the cycle time and throughput issues it is currently experiencing. 

“The layout at the back-end of the line was built according to the tool set availability specification which resulted in fewer acquired buffers. As we started to ramp the back-end of the line with a tool set availability not yet at a mature state, we realized there were multiple single points of failure in the line that could shut down production. Effectively, the line was not adequately buffered given the current format of the tool sets”, added Widmar.

“We are in the process of installing inventory accumulators to properly buffer the back-end of the line. Once completed in our Ohio factory, we will use our Copy Smart approach to roll out to Malaysia and Vietnam. Over time, as the tool set availability improves, while the inventory accumulators will remain in place, the need for inventory buffers will decline.”

First Solar noted that the resulting constraints, although minimized eventually would lead to an annual shortfall of finished module output of around 200MW. 

This is due in part to the fact that the company would not have all of the buffers in place to hold un-finished module inventory for back-end completion at the end of the third quarter of 2018 or near the beginning of the fourth quarter of 2018, according to Widmar. 

“It is important to note that despite the 2018 volume reduction with the actions we are taking we anticipate to exit the year at the originally anticipated throughput levels and enter 2019 on track to our previously announced Series 6 production volume,” noted Widmar in the earnings call.

Editors note: A short 2 hour video by the guru of ‘Theory of Constraints’ is posted below. 

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N-type solar cell production to exceed 5GW in 2018 with 135% growth since 2013

As the solar industry has grown from a 50GW market to 100GW in just a few years, the desire to have differentiated production has increased, especially for companies entering the market or repositioning strategies.

Having a product offering that is either higher efficiency or lower cost is always a good way to extract funds to build new manufacturing capacity, and the solar industry has seen plenty of efforts in this regard.

Sadly, most attempts to do this in the past have failed, characterized by the equipment-supply-chain driven turn-key a:Si phase and the days when new entrants were arriving in the industry like there was no tomorrow, and many venture capitalists were left to count the losses.

During the past 2-3 years, the focus has returned to n-type cell variants, and this has been accompanied by no shortage of marketing fervour and aspirational claims. However, when we unpick the facts from the fiction, and track the reality of production, we can see definite upward trends that will surely sustain excitement and investment levels going forward.

For the first time, this article reveals exactly how much n-type production is coming from this segment of the PV industry, further categorizing this into the three sub-categories of n-type technology: back-contact, heterojunction, and all-others.

The underlying data comes from analysis compiled by our in-house research team at PV-Tech, and is available within our PV Manufacturing & Technology Quarterly report releases.

What this all means for n-type module availability – and related panel performance, quality, reliability and company/technology due-diligence for utility-scale solar – forms part of our pending PV ModuleTech 2018 conference in Penang, Malaysia, on 23-24 October 2018.

Why n-type?

For users of solar panels, talking about minority carrier lifetimes or surface recombination velocities – or indeed anything that sounds more like physics than return-on-investment – is largely misplaced.

Of course it is important to understand the physics, especially if you are pushing the boundaries in terms of advanced cell processing, but when it comes down to developers and EPCs, the arguments for n-type can be summed up better as follows.

n-type solar cell substrates are intrinsically higher performing. Cell efficiencies are well above the industry-standard of recent years (p-type multi), and as a result, panel powers (like for like panel sizes, at STC) offer gains of many tens of Watts. This clearly offers space-related benefits which translate positively to any LCOE calculation based on reduced system capex/BoS-costs.

Additionally, n-type offers vastly superior elevated temperature performance, compared to all p-type options (both mono and multi). Here n-type shares temperature-dependent power coefficients with thin-film panels, such as First Solar’s. Considering especially that utility-scale solar plants (and indeed almost any solar panels under direct sunlight) generally perform at temperatures well above STC conditions, there is an argument for every comparison of solar panels to be done at 70 degrees.

n-type substrates are also less prone to various degradation mechanisms, which – given manufacturing quality, testing and repeatability – translates directly into reliability and lifetime performance (return-on-investment).

The above issues are not new by any means. However, it is interesting to see many of the new n-type entrants in the past few years trying to explain these clearly, while at the same time seeking to ramp new production lines and understand simply how to get production lines to targeted efficiencies, yields and distribution goals.

Until now, the only issues holding back n-type being the mainstream choice in the solar industry have been production levels (trending in the 5% of annual demand ballpark) and manufacturing costs (including wafer availability). As such, this explains why everyone in the solar industry needs to keep a close eye on n-type companies, investments and expansion plans, and is fundamentally behind the long-term view held by many that n-type market-share gains will only increase year-by-year for quite some time.

Why can’t n-type benefit from economy-of-scale seen by p-type?

Currently, the PV industry is basking in the glory of having moved p-type multi solar cells from 3 to 5 busbars, in adding a passivation layer to the rear side of p-type mono cells (the PERC cell), and in driving down production costs to allow selling a module at 35c/W with small (positive) gross margins.

However, the p-type community – though a combination of the above and other less-publicized issues – has collectively taken p-type cell efficiencies from 15-18% to 18-21% over a five-year period, representing a phase in the industry that is one of the most productive and helpful to developers and EPCs.

At this point, one should point out that previous estimates (mainly from the research community or early adopters) of where p-type performance could max-out in mass production have largely been exceeded. Indeed, at our PV CellTech 2018 meeting back in March, leading multi-GW p-type cell manufacturers were each showing roadmaps to take p-type mono average cell efficiencies to 22-23% within the next couple of years.

I recall at PV CellTech asking none other than Prof. Martin Green of UNSW what had surprised him most about the current cell performance levels seen in a 100-GW-scale PV industry, and one of the replies was based around the fact that nobody had imagined the performance gains that could be attributed from mass-production learning.

Therefore, the obvious question to ask is: what is possible from n-type production, if it was to scale to 10GW or 100GW? Currently, performance levels of n-type (especially IBC and HJT) are industry-leading, but how much more is out there compared to the GW-max seen at any one producer today? Of course, should IBC/HJT (or hybrid variants thereof) move to this level of production, then by default the industry will have addressed the supply and cost challenges that exist today.

So, one should perhaps not look too closely at the decreasing delta between p-type mono PERC (at the 30GW+ production level, and with a cost structure heavily blended with p-type multi output) and n-type cells, as the comparison is not on a level playing field. The question should be: how do these cell concepts compare when each has tens of GW production across 5-10 key producers?

In the meantime, let’s return now to n-type growth within the industry today.

From 2GW to 5GW annual production in five years

Until a few years ago, the PV industry had just a few companies making n-type solar panels, with efforts spread across three ‘different’ approaches: back-contacted solar cells (or interdigitated back contact, IBC), front-contacted with doped/intrinsic thin a-Si (passivation) layers (heterojunction), and n-type designs that are more analogous to regular p-type solar cell processing but have rear passivation/diffusion.

SunPower is well-known for being the proponent of IBC cells, benchmarking premium performance levels across all n-type (and everything else) on the market. IBC processed cells remain market-leading today by some margin.

Panasonic inherited Sanyo’s heterojunction facilities in Japan and Malaysia, and for some time was the only company offering this technology. As I will discuss below in the article, other companies have now entered this segment of n-type solar manufacturing. 

Heterojunction (or HJT) performance has slightly lower performance levels, compared to IBC, but offers higher powers than other n-type variants. The strengths of HJT can also be blended back-contacting of course, but as yet this is R&D only, and not close to mass production.

The ‘other n-type’ grouping has seen some pilot-line activity in the past, but saw its first real efforts to move into mass production about 10 years ago, when Yingli Green Energy ramped up several production lines through a technology-transfer with European research institute ECN (the ‘Panda’ offering from Yingli). During the past few years however, this technology class has seen the greatest level of competition, in particular arising from the success of LG Electronics in South Korea, and subsequently spreading across several new companies located in China.

The net result of the new capital investments has seen the number of (meaningful) n-type cell producers grow to approximately 20, with many others engaged at the R&D level also, or working with research institutes on collaborative projects. Consequently, global cell production of n-type has grown from the 2GW-level in 2013 to what is projected to be more than 5GW this year. This is shown in the figure below:

LG Electronics became leading n-type producer by MW in 2017

Almost under the radar, and without any great fanfare, LG Electronics likely moved into the leading position in the PV industry sometime during 2017, producing more n-type capacity than any other company. Much of this has arisen from the company’s aggressive capacity expansions in South Korea during the past couple of years, stimulated by the US market in a pre-Section-201 world.

When looking more closely at LG Electronics’s specific process flow for its n-type cells, one can see some other trends that are characterizing the n-type segment as a whole, many of which have not found compatibility with mainstream p-type cell production.

Currently, with the exception of a few Chinese new-entrants, all n-type producers have some form of differentiation, ranging from the likes of SunPower (whose lines are entirely in-house IP-owned) to LG Electronics (multi-wires and ion implanting) to others that may have bifaciality as standard or (like SunPower) have worked out how to use wafers below 120 microns thick. This segment is also the first to use thin wafers and have copper (not silver) for electrical collection.

n-type benefits from European/Western equipment suppliers

A large part of the growth success of n-type production in the past few years can be tracked directly to the involvement of equipment suppliers, with many of the leading European companies having process knowledge exceeding the customer base they are serving: Meyer Burger, INDEOtec, SCHMID, Von Ardenne, Singulus, Tempress/Amtech. Japanese know-how – courtesy of legacy engagement with Sanyo in Japan – has somewhat permeated out of companies such as ULVAC and Sumitomo Heavy Industries and exists in various forms through affiliated or licenced partnering companies in Asia today. Companies previously selling PCV/PECVD tools for a:Si deposition (ULVAC, Applied Materials, Jusung) are obviously placed to have an impact also.

Walking around many of the new n-type lines in operation today across Asia and Europe will likely feature equipment from many of the above companies. The n-type segment (in particular for HJT and all-others including n-PERT/bifacial variants) is yet to consolidate around a standardized process flow however, and is still one that Chinese tool suppliers believe they can address should multi-GW be added from 2019 onwards during the next phase of n-type expansions.

Removing wafer availability concerns

Previously, n-type production was seen to have certain limitations, in particular from being reliant on mono ingot pulling which until recent years had been relatively niche. Indeed, had it not been for LONGi and Zhonghuan, it could be argued that this same limitation would apply, with 5-inch wafers for n-type cell production being in short-supply and priced 15-20% above regular wafer offerings from the likes of GCL-Poly.

However, all this changed with the expansions from LONGi and Zhonghuan making mono pulling a 10-20GW company-operations, and taking production costs to levels that previous wafer suppliers in Asia could never have reached (for any mono wafers, not just for n-type cell production).

Almost overnight, mono wafer supply has become commoditized, and one could almost argue today that wafer-supply to n-type is a net-positive, not a stumbling block. Currently, wafer supply for n-type producers is mainly available on-demand, with a decision on number of pullers using boron or phosphorous dopants. The supply of wafers for n-type cell production is not likely to go into over-supply in the near future, but given the hunger for leading Chinese mono wafer suppliers to dominate the market, one can conclude also that should a few additional GW of n-type be produced even in 2019, the supply-chain will meet this demand from China.

Heterojunction still the front-runner for most new entrants

While the graphic above may not suggest it, HJT is where the focus is today for much of the new investments into n-type across China, Taiwan and Europe/Russia. Many of these companies are ramping new lines now, and success here will show more clearly in production data going forward, and less so when looking at the 2013-2018 window.

The drivers are varied. For many of the Chinese companies, having a panel with ‘Panasonic-type’ quality/performance is clearly something many would love to have today, and there remains a belief that if they can match cell efficiencies in mass production, then they can address the Achilles-heel for Panasonic and Sanyo in the past: production cost.

For others, the move to HJT may be as simple as needing to repurpose legacy a-Si investments (e.g. Hevel Solar, 3Sun/Enel) and seeing HJT as the natural c-Si based path.

With the strong R&D being undertaken by tool suppliers such as Meyer Burger and INDEOtec, the prospects for HJT moving to multi-GW scale with a competitive cost structure are good.

PV ModuleTech and PV CellTech remain the go-to check-points for n-type

For the past few years at PV CellTech, we have focused on the plans for new cell production for n-type capacity, as especially HJT variants. This has proved invaluable in providing a glimpse at what may come through in mass production 2-3 years out, at which point most of the downstream community have real choices to make based on new module suppliers and technologies.

While this captures much of the reasoning behind the PV CellTech event, PV ModuleTech looks at how this impacts on module supply today, in terms of company strengths, product quality, and bankability. As such, this year’s PV ModuleTech 2018 event in Penang (23-24 October 2018) will be a great place for global developers and EPCs to understand exactly what the supply of n-type modules will look like in 2018.

For many, it will be simply keeping track of a module technology that could impact on their solar strategies from 2020 onwards. For others, it offers immediate benefits, assuming selection of module supplier and technologies meet necessary due-diligence and bankability requirements.

For more details on how to attend PV ModuleTech 2018, please follow this link.

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Meyer Burger supplying ‘SmartWire’ tools for heterojunction module assembly plant in Southeast Asia

Leading PV manufacturing equipment supplier Meyer Burger has secured an order for its ‘SmartWire Connection Technology’ (SWCT) from an international solar module manufacturer in Southeast Asia for use with heterojunction (HJ) solar cells.

Meyer Burger said that delivery and installation of its SWCT technology was planned towards the end of 2018 and expected the commissioning and ramp-up of the 200MW solar module production line in the first half of 2019.

PV Tech has recently highlighted that Meyer Burger’s SWCT technology had been adopted by new HJ entrants, transitioning from amorphous silicon thin-film module production to HJ, such as 3Sun in Italy and Hevel in Russia and previously Ecosolifer in Hungary as the technology is a low-temperature interconnect solution, which is required for HJ cells because of the use of a-Si TCO layers on the front and backside of the cell.

The technology has also been adopted by integrated c-Si PV module manufacturer REC Group, which has its wafer, cell and module manufacturing operations in Singapore.

Meyer Burger has also recently announced that Panasonic had decided to fast-track the evaluation of its SWCT technology in an effort to boost its cell and module performance. 

Panasonic has a module assembly plant in Malaysia, supplied with HJ solar cells from Panasonic’s dedicated solar cell plant in Japan as well as contract manufacturing for Tesla in the US.

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Leading GW-plus module suppliers to non-China PV global markets

As module suppliers adapt to the slowdown of Chinese module demand in 2018 and 2019, global EPCs and developers are likely to see new Asian-produced panels being offered for both rooftop and ground-mount installations.

This issue was discussed in a recent PV-Tech blog last week, and forms a key theme of the topics and agenda during the forthcoming PV ModuleTech 2018 event, on 23-24 October 2018, in Penang, Malaysia.

This article reveals who the GW-plus module suppliers are to the global end-market, once we remove module supply to the domestic Chinese market, and identifies some of the chasing pack that are hoping to increase global brand awareness going into 2019.

Twelve module suppliers account for two-thirds of non-China global demand

While there remain hundreds of companies producing modules today, from regional single-production-line start-ups, to the multi-GW capacities of the Silicon Module Super League players, once we remove China market supply channels and all the low-volume suppliers (typically into a small subset of non-China markets), we are left with 12 major global suppliers. This list (shown alphabetically) is displayed below.

In fact, collectively these companies are likely to account for about two-thirds of global PV module installation capacity (excluding China) during 2018, with much of the supply being to utility-scale projects where company and technology are two critical issues that undergo various forms of risk-mitigation, auditing and bankability.

The list of 12 companies can be grouped and discussed here, to illustrate the different profiles and strategies for non-Chinese global module supply.

While having different technology offerings, First Solar and SunPower have relatively similar downstream-driven operations, with SunPower’s rooftop activities being the main differentiator.

Canadian Solar, JA Solar, JinkoSolar and Trina Solar can also be put together, with Canadian Solar having a more arms-length projects business that is not tied to using the company’s branded modules.
Risen shares similarities to the above China-HQ companies, but without its own non-Chinese manufacturing operations. Risen has downstream tactics similar to Canadian Solar.

LONGi and GCL-SI form the next group-of-two, being legacy upstream China-based poly/wafer suppliers, but now having multi-GW cell/module capacity with ambitious non-China module supply aspirations.

LG Electronics and Hanwha Q-CELLS form the Korean-run subset here, with both companies having been focused strongly in the past few years on being leading suppliers to rooftop and ground-mount segments in the US. Not surprisingly, both companies have also revealed module assembly capacity expansion plans in the US, hoping to benefit from the 2.5GW of tariff-free cell imports.

This leaves REC Solar somewhat in a grouping of its own, having a different place in the PV industry, compared to the above companies. While REC Solar has dabbled on and off with projects business operations over the past decade, it retains a somewhat European-run company, despite Asian ownership.

The chasing pack

There are over 100 module suppliers that would love to be included in the above list. Indeed, many of these companies were seen stepping up trade exhibition visibility in Europe and the US during the past couple of months, hoping to connect more with developers and EPCs outside China.

The strongest challengers to the above top-12 are listed now:

Talesun has the potential to be included within the Jinko/JA/Trina grouping above, due to multi-GW status (very close to SMSL inclusion) and non-China cell/module plant operations.

Neo Solar Power remains the surprise package for 2019 possibly, with the collective resources of UREC being potentially available, and at a time when NSP has been repositioning itself with project financing and site acquisition globally.

Note that we have purposely excluded companies (mostly in Southeast Asia) that have been used purely as OEM contract module suppliers.

PV ModuleTech 2018 to explain more about the top-12 market leaders

While strong growth outside China set to be the driver for end-market growth going forward, knowing more about the financial and technical strengths of the above-mentioned module suppliers will be critical to project developers and EPCs, when designing and building out new solar sites.

Even from a list of 12 or 17 however, there is plenty to learn and understand. While the above text offers a basic segmentation, there are many differences between how the companies operate outside China (or Korea), and in the product portfolios offered from each company.

The goal of PV ModuleTech this year is to provide a platform to help in this respect, and many of the module suppliers discussed here (such as First Solar and SunPower) will be explaining how their module offerings are both bankable and performance-leading, backed up with field performance data linked to manufacturing excellence.

To participate in the PV ModuleTech 2018 event in Penang on 23-24 October 2018, please click here for further information.

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How many Chinese module suppliers can compete with JinkoSolar, outside China?

Since Chinese investments into major cell and module facilities started – more than 10 years ago – success ultimately has been driven by overseas market-share gains, above other technical or financial benchmarks that otherwise would be expected.

However, despite the efforts of well over 50 Chinese cell/module makers (where the cut-off is including those with >500MW of capacity), only 5-6 Chinese companies have actually succeeded in establishing global operations with brand-recognition, and can point to a successful overseas business plan.

However, only one of them has evolved into a company that, in several respects, operates as a non-Chinese company outside China – JinkoSolar.

This article looks at where JinkoSolar is placed in the PV industry today, from both a Chinese and global standpoint, and asks the question: can other Chinese companies do what JinkoSolar has done, and if so, can they do it before their Chinese supply pipeline disappears?

Furthermore, is JinkoSolar now unfolding global module supply operations that are setting benchmarks for western-run module suppliers that rely on non-Chinese demand to exist?

Many of the themes running throughout the narrative below are set to be featured in more detail, at the forthcoming PV ModuleTech 2018 event on 23-24 October 2018, in Penang, Malaysia, where the top 5-6 leading global module suppliers will be outlining their company’s module technology, quality, and reliability status.

Resuming overseas module supply much harder than before for Chinese companies

During the last major rush to export modules from China (driven mainly by European FiT demand before 2012), the requirement for a global presence was minimal. This was seen clearly at the time, with Chinese operations being trade-show sized replicas of domestic personnel, and where sales to intermediates (distributors, installers, EPCs) was largely sufficient.

The Asian companies then that sought to have a global presence (Yingli Green, Suntech, Sharp, Kyocera, etc.) ended up challenged by ASP declines and lack of product differentiation, and with global operations that were based largely on copying the Europe third-party sales approach, aside from the occasional frenzy into mainstream product placement activity (read Yingli Green and the 2014 FIFA world cup in Brazil, for example).

As trade barriers crept in (US and Europe), about 90% of the Chinese companies fell back to domestic module operations, in part due to the imminent market pull from local demand, but also arising from lack of desire/cash to have any Southeast Asia manufacturing.

In effect the period of 2012-2016 saw the second major phase of supply-channel consolidation (the first being the eradication of European and Japanese majors on the global stage), and left the only global module suppliers of note, with Chinese HQ operations, being JinkoSolar, JA Solar, Canadian Solar and Trina Solar. By the end of this period, Hanwha Q-CELLS had effectively become a South Korean-run operations, while having legacy Chinese manufacturing arising from the Solarfun days.

Collectively, these four Chinese-run companies (Jinko, JA, Canadian, Trina) have many similarities when it comes to manufacturing operations (China plus one-other Southeast Asia), technologies (p-mono and/or p-multi, PERC migration plans), and business models (aside from Canadian’s downstream activities).

The other feature that differentiates them from the 100+ remaining cell/module makers in China, is related to sales/marketing outside China, and understanding the difference between a Chinese company doing business in China and outside. This remains the key factor determining success rates from the other Chinese companies overseas, regardless of the RMB-levels allocated to being on the global stage.

However, over the past 5-6 years, no Asian company (and very few globally) has been able to come close to the global module supply business strategy of JinkoSolar. In contrast to the other Asian companies that have got to global market-share leadership in the past, JinkoSolar has simply used this as a springboard to move to a different level, and into largely unchartered waters when it comes to a solar module company.

Why JinkoSolar?

This is a question asked by many people globally in the past few years. Indeed, if the answer was simple and prescriptive, others would have done it long before now, or be rolling out 2-3 year plans to get there by 2020/2021.

Of course, one part is being in the right place at the right time (read entering the industry post margin-crippling long-term polysilicon contracts) and being able to juggle tactic and strategy effectively (flexible in-house, OEM, contract supply balancing). But if we were to make a stab at the main reasons for JinkoSolar’s success, it may simply come down to these three points:

Creating non-Chinese operations (sales and marketing) that were geography, culture and sales-pipeline savvy, in exactly the correct global locations at any given time. What is being seen now with the company’s multi-GW pipeline of contractual deliveries is likely a direct result of this being in place. It is the closest thing yet to a Chinese company operating in a non-Chinese way, outside China.

Putting in place a (real) technology roadmap with R&D spending and line upgrades, at the multi-GW level. This is one of the reasons previous market-leaders struggled, as many had effectively bankrupt themselves in getting to number-one with a me-too product, and had no what-next plan that should have been to be a market-leader as well as a technology-leader.

Seeing the Chinese market (especially over the past 2-3 years) as low-priority, and being focused on being either number-one or number-two in all other major end-markets (regional or country-specific).
The first point above can’t be charted as a benchmarked metric (its way more subtle and strategy based), but the others can, so let’s have a look here to emphasize these two points. The graphs below illustrate these points clearly enough.
 

China end-market-check forcing Chinese companies to globalize, or cease operations

Ironically, the dilemma facing most of the Chinese based module suppliers today has arisen purely from the domestic China market. Almost all companies expanded capacities, production and module supply purely on the expectation of local supply being available.

Indeed, many had been doing this, without any overseas business, or at best having discontinued their focus on export revenue streams. Therefore, in the absence of local supply options, these companies have to export, or effectively cease to operate efficiently with adequate utilization rates.

This largely summarizes the situation many Chinese companies are faced with today: how do they quickly work out the markets to focus on overseas; how can they convince module buyers that they have product quality and reliability to be bankable?

For many Chinese module suppliers that were relying purely on domestic demand, the problem is even greater, in particular those companies that were supplying modules mostly to parent-owned EPCs, themselves undertaking build-out for the same parent entity. The requirement to have third-party factory auditing, module inspection and risk-assessment is clearly not at the level here, compared to shipping half way around the world to a non-Chinese investor.

These questions are going to form a key part of the forthcoming PV ModuleTech 2018 meeting in Penang in October. To allow for this, we have supplemented last year’s agenda with a new session where leading market analysts/developers from all key markets outside China will present on what utility demand will look like in these regions over the next few years and what this means for module suppliers.

Not just China module suppliers, others having to change tactics quickly

The shifting module supply landscape of 2019 is also having an impact on remaining module suppliers headquartered in Japan and South Korea, not to mention Taiwan and Vietnam/Thailand. For many of the module companies based in these countries, the challenge is not so much on meeting demand in their HQ-country (e.g. for markets such as Taiwan and South Korea that are government-created to support domestic sectors), but in working out which of the countries (outside of US and Europe) to focus on.

Perhaps across all these countries however, the what-next for Neo Solar Power (NSP) in Taiwan may be the most interesting to view in 2019. Assuming NSP emerges as the dominant partner in the newly-created consortium of NSP, Gintech and Solartech (with modules rebranded as URE), then NSP may finally make the cell-maker-to-module-supplier/developer transition, on the global stage.

Of course, NSP would face exactly the same issues in terms of creating global sales and marketing, and branding. The advantage NSP would have however is making this transition, having started from a technology (and cell) focused heritage. This is not dissimilar to the path taken by JA Solar and Hanwha Q-CELLS in recent years, and having technology credibility is never a bad starting point when changing operational focus.

PV ModuleTech 2018 to showcase global module supply leaders

Last year, at PV ModuleTech 2017, the audience heard from the most of the top-10 module suppliers to the PV industry, based purely on module supply volumes over the previous 12 months, including both within and outside China.

For PV ModuleTech 2018, the contributions from module suppliers are shifting mainly to the leading module suppliers to the non-China segment of the PV industry, including companies such as First Solar, SunPower, and selected others that are existing (or potential) global suppliers over the next 12-18 months (and the main Chinese companies expected to survive the imminent shakeout).

This select group of companies is likely to form the basis of many of the proposals that will be seen by utility-scale developers and EPCs over the next few years. Therefore, understanding who these companies are, what module technology types they have been supplying recently, what their module supply roadmaps look like, and how their panels have performed in the field so far (from third-party verification standpoints) is vital.

To get involved in PV ModuleTech 2018, on 23-24 October, in Penang, Malaysia, please follow the links at the event website here.

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