By: Edwin Koot; Director of SolarPlaza.com
18 December 2006
What
do you see when you turn around a toy in a toy store? Now, how far away
will this “Made in China” dominance be in the solar industry? The
recent second PV business tour China, organized by SolarPlaza.com,
showed that this mark will appear more and more on products in the
global solar energy market. The international trade mission visited 5
manufacturers and heard presentations from some 10 other new or
‘long-term’ existing producers. Their ambitions are all very clear, and
mostly not less than to double capacity and production within one or a
few years. The conclusion: the Chinese PV industry is growing at
tremendous speed. With a small domestic market, not surprisingly, the
export strategies of Chinese players are focused on Germany, Spain and
Italy as favorite countries. Another conclusion is that the Chinese
manufacturers are convinced the silicon shortage problem will be solved
within 2 years, resulting in a serious price decrease for solar
modules.
China is already a major solar manufacturer
Although
project developers are sometimes still a little anxious to buy Chinese
modules, the reality is that the largest manufacturers in the world all
have their stakes or supply agreements with Chinese producers. There is
a good chance that the major part of the modules currently sold in
Spain are already made in China, either under their own brand or as OEM
manufactured. Nowadays a trend is visible that these Chinese modules
are sold more often under their own name. Marketing has become an
integral part of the Chinese solar business, with western-oriented
people, speaking fluent English, onboard. Chinese companies completely
unknown a year ago, are nowadays commonly-heard names in the German and
Spanish market. But not only the sales opportunity makes the Chinese
manufacturers oriented towards Western countries.
|
SolarPlaza.com international trade mission participants in front of Suntech Power |
The Australian link There is an interesting link between the sunny Australian continent and China. Like the CEO of Suntech Power, Dr. Shi, the CEO of CEEG Nanjing PV-Tech, Dr. Zhao has roots in the Australian University of New South Wales. Both have considerable experience in solar cell research and hold cell efficiency records. Suntech can already be considered as one of the major solar cell and module manufacturers in the world. CEEG PV-Tech is aiming to become one of the world’s leading pure cell manufacturers. |
| Trina Solar Visit the manufacturing site of Trina Solar in Changzhou and you will see building activities are going on continuously. You will sense that this company is growing at high speed. A privately-owned company, Trina Solar is very internationally oriented and has Good Energies as one of their shareholders. Among the management are experienced USA and Spanish seniors. Given the track record of investor Good Energies, it is no wonder that Trina Solar has listed for an IPO in New York last week. |
Mr. Gao, CEO of Trina Solar and Mr. Koot, President of SolarPlaza.com |
|
SolarPlaza.com international delegates in front of Shanghai Topsola |
Competitive advantages Most Chinese cell producers have imported and installed production lines from well-established equipment manufacturers in Western countries like Germany and Italy. By using Chinese equipment, some cell manufacturers see this as a strategy to achieve further serious cost price reduction. Furthermore, like all the others, cell and module manufacturer Shanghai Topsola does have a close relationship with a University for further cell research activities. To achieve competitiveness, most Chinese manufacturers are aiming at vertically-integrated production. |
| More impressive figures Overall, in 2005 the solar cell production of 12 manufacturers in China was around 150 MW. According to Zhang Cheng, TI Manager for NDRC/PMO, in 2006 the production capacity may reach 1,450 MW with more than 30 Chinese manufacturers. The figures for solar modules are of a similar magnitude. The production in 2005 was 284 MW at a capacity of 857 MW. This capacity will almost double to 1,500 MW in 2006. The number of manufacturers is not known. It could well be over 50, but will already be more at the time of writing this line …;-) |
Inside one of the factories of a Chinese modules manufacturer |
Local roadmap for domestic industry and market
Not only the Chinese solar industry itself is confident about a future domestic market. The local government is supporting this with new initiatives to create domestic market growth. One of the speakers during the SolarPlaza trade mission was Prof. Wei Qidong, secretary general of the Energy Research Association of the Jiangsu Province. He explained that the Association has developed a roadmap for PV development. The PV industry revenues in 2006 will reach around 1 billion euro but are likely to be 10 billion within 5 years in this region. The Jiangsu government is working on the first steps of a domestic market development with a 10,000 roofs program. And it has started discussions with energy utilities for a feed-in tariff incentive for PV applications. Prof. Wei Qidong sees a bright future for the PV industry in Jiangsu Province, with R&D plans focused on cell efficiency improvement, concentrator PV systems and thin film technologies.
What happens in the Chinese PV market?
In China about 10 MW were installed in 2004. Surprisingly, this figure decreased in 2005 to around 5 MW. A surprisingly small number for such a large country. The reason is that the application in rural projects depends on government programs. One of these major programs ended in 2005. Now, a new program is being prepared to electrify the 3 million households that still have no access to electricity. Several initiatives are now focused on improvements of quality standards within the solar industry, supported by the World Bank.
Although the Renewable Energy Law was published in January 2006, this has not yet resulted in any concrete PV incentives. According to the Chinese people involved, no concrete steps for a stimulating feed-in tariff are to be expected in the short term. Still, all the Chinese companies visited are confident that in the mid term the government will further stimulate the domestic market. Recently, first steps were made with the announcement of a 100 MW project, to be developed in the poor but sunny northwestern province of Gansu. This sounds hopeful and of course, the potential for PV application in China is incredibly large. So, in the mean time Suntech Power started to brand their company in China. Besides the free publicity following their successful IPO and with Dr. Shi as one of China’s richest men, the company has hired billboards in the Shanghai area to promote the company.
It made SolarPlaza conclude that a new visit to China seems necessary within six months in order to keep on track with this rapidly growing solar industry and nation.
About SolarPlaza
www.SolarPlaza.com is the global PV marketplace, offering (free) information and matchmaking services to empower solar businesses. It has successfully organised four PV business tours to Spain and China before. The next business tour will visit Italy and Greece in one week. Other new tours to Korea, USA, China and other countries are being planned. The personal matchmaking service is a (free) tool for companies with a business request. By making use of its 14 years of experience and international network of relations and (+10,000) contacts in the solar industry, SolarPlaza can provide the contacts offering the best business deals.
Furthermore the company recently published the market survey report entitled ”The Italian PV Market”. In January SolarPlaza will publish a report explaining all details of the Greek feed-in tariff and subsidy system.
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