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.
By: Edwin Koot; Director of SolarPlaza.com
18 December 2006
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
China is already a major solar manufacturer
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.
started in 2005 and the capacity will reach 200 MW in 2006. The goal
for 2008 is 600 MW capacity or even more. With its track record, CEEG
PV-Tech sees its R&D experience and knowledge as its main
competitive advantage. A visit to the companies and their production
sites is convincing that the capacity ambitions not only look
impressive on paper. These companies are examples of how fast the
Chinese industry can grow.
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
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
investment company was very successfully involved in IPO’s of Q-Cells
and REC previously. Trina Solar is expanding activities in solar
silicon, wafer, cell and module production to become another example of
a vertically-integrated manufacturer. They expect the new cell
production lines to be ready early next year. The overall capacity
should reach 300 MW by 2009.
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.
are still looking for an appropriate (Western) partner, others like
Shanghai Chaori, have already started a joint venture for their own
silicon production. This company started with 1 MW module capacity in
2003 and is now heading for 225 MW in 2010. The company is involved in
one of the largest new PV project initiatives in Spain.
| 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
their presentations to the international participants in the SolarPlaza
trade mission, some major existing and new manufacturers stated their
strong belief that the current market stage is only the beginning of a
new era. China’s largest glass manufacturer presented their entrance in
the solar industry with an ambition of 450 MW capacity, from silicon to
modules, to be achieved in 2010. Other cell and module manufacturers
presented impressive growth figures of more than 100% per year as well.
And more than one is said to have plans for an IPO. Now cynics of
course can say these production capacities have yet to be proved and
fully used. But, if half of this capacity is actually being used (and
why otherwise build this capacity?), the production output is enormous.
And, as experienced during the site visits, they are not just saying it
but really doing it. It seems the Chinese have adapted the credo of the
all American company Nike: “just do it”.
Local roadmap for domestic industry and market
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
What happens in the Chinese PV market?
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.
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
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
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.