"Power for a changing world"
Solarplaza talks to William Shen, Vice President of Chinese solar panel manufacturer Lightway Solar. Shen’s company has steadily been building production capacity since 2008 and is getting ready to step onto the big stage.
By Tom van der Linden, Solarplaza
Interview with VP, Lightway Solar
Many things have changed since Lightway Solar first entered the market four years ago. “In 2008, the European market witnessed the explosion of Spain and Italy. These markets reached a peak in 2010, but since then the FIT’s have been decreasing continuously. Because the average costs per watt has decreased, European Governments began to evaluate the costs and adjusted the FIT’s to make sure that they would not be supporting the industry too much. The booming of the industry did, however, cause the flowering of the value-chain as a whole, all the way from the materials to the down-stream sector. This will ultimately still lead to grid-parity.”
Although Europe has played a decisive role in the kick-start of the market, Shen believes the global balance will shift. “I believe the European market will not play the same role in the future. The Asian and Pacific markets will play a more important role - both in the global market and their own home markets - and occupy a larger share. Last year, for instance, the Chinese market has experienced amazing growth, partly due to the fact that the Chinese Government has issued their very first FIT. In 2011 the market has grown with 200%.”
Financial crisis and trade restrictions
Apart from the growing potential in these new markets, the established markets are struggling with issues that might also lead to the closing of the current gap between the European and upcoming Asian markets. “In Europe, the biggest problems are the financial problems; the crisis. The financial system has a lot of problems with debts, which will also influence the PV financial system. Governments don't have enough money for subsidies and FIT’s and banks haven't got enough influence and money to support developers. This will slow down the project progress and influence the market. In other places, like the USA, another big problem is the phenomenon of trade protection.” Shen is hinting towards the anti-dump tariffs that the US Government recently announced. “I think that Chinese products have an advantage, because they’re much closer to the cost-price. This is not just because of Government subsidies, but is due to the fact that China has a complete industry chain and continuing industry growth. Production costs are low and the other logistic costs are also very low. The measurements taken by the US Government only protect a few producers in America who feel threatened. In the meanwhile, it harms so many installers and downstream developers that operate in the American market. I think this segment is much bigger than that of the American producers.”
Eyes on Asia
These American trade-restrictions and the possible prospect of similar measurements in Europe have caused many Asian producers to explore markets closer to home, markets that – like the Chinese market – show large potential. “I mentioned that last year the Chinese government has announced its first FIT, which has led to a booming of the industry. The Chinese market has come close to a capacity of 2GW. For this year I expect it can increase with at least another 50%. Many Chinese producers now not only focus on overseas markets, but also look inward towards markets closer to home. Lightway Solar also has many relationships with utilities, developers and EPC’s in China. In some situations we even develop projects ourselves, and provide EPC-services. We are a Chinese company, this is our domestic market. It is easy for us to operate in this market, much easier than in overseas markets.”
Apart from China, companies like Lightway Solar are fixing their gaze upon other Asian markets. “I think of Japan and China as the new markets on the rise for the next few years. Maybe India. Since Japan has stopped its nuclear power generation there is a scarcity of electricity in the country, that’s why they’re blowing new life into the solar market and have issued a new FIT last July. Their new policy is very aggressive. Japan is a rich country with enough market to support the development of solar. For Japan, solar power is clean, renewable and – very importantly - safe energy.” The critical note on this example, as explained by Shen himself, is that Japan is a more closed-off market than the European and North American markets. “In this market there are many local business-habits and local business traditions. Japanese customers prefer to purchase local products. Our strategy will be to cooperate with local partners, form joint ventures and make our products Japanese. That way we can enter the market much easier.”
Future industry developments
The global solar landscape is rapidly changing. And many more things are still set to change. “First I think that in some countries where the solar markets are currently blooming, like Germany and Italy, continuous development will lead to grid-parity. This has a big significance in the energy history. Secondly, I think that new markets like China, Japan and India will be the next booming markets. Lastly, I think that there are some new technologies and products, like high-efficiency products and BIPV-products, that will change the landscape. One of the most important sectors in the future will be the building integrated solutions, the combination with buildings. Power storage and technology will also be further developed.”
When asked about the future of Lightway Solar, Shen reveals ambitious plans for his company. “Lightway will establish a more global network than it currently has. This global network will also include more localized presence in certain markets, enabling us to supply and provide more local products to our customers. Also, with our global and localized presence, our brand-awareness will be much better. We will invest more in marketing and PR to make this happen. Lightway Solar not only aims to be a global producer, but also to be able to offer full project-solutions in the changing landscape. Like our slogan says: ‘Power for a Changing World’.”
For more information about Lightway Solar, visit: www.lightwaysolar.com