Taiwan-based crystalline silicon solar cell makers have been impacted by the US imposing an average 19.5% anti-dumping tariffs rate. But rooftop PV systems, especially those built with high-efficiency cells, will provide market opportunities for Taiwan-based makers, according to David Chen, chairman for Win Win Precision Technology.
Chen, whose Taiwan-based company sells own-brand PV modules vendor and provides rooftop system EPC (engineering, procurement, construction) services, talked to Digitimes in a recent interview about the roof-top PV systems market.
Q: Win Win began marketing in the Germany market where total PV installation capacity had fallen from an annual peak of nearly 8GWp to 1.8GWp in 2014 due to government's continual cuts in feed-in tariff rate. Does Win Win still remain in the market?
A: While total PV installation capacity in the Germany market has dropped to a stable level of 1.5-2.0GWp a year, Win Win continues business operations there and expects its market share to rise from about 7% in the second half of 2014 to 10% in 2015.
Germany and other European countries have continually reduced feed-in tariffs, resulting in sharp decreases in the establishment of PV power-generating stations. However, demand for rooftop PV systems has not shrunk because cost for PV power generation is decreasing while prices for conventional electricity supply are on the rise. From the viewpoint of an EPC contractor, the Europe PV market is becoming a normal one, transitioning from reliance on government feed-in tariffs to self-sufficiency without feed-in tariffs.
Q: Why was the big difference in Win Win's PV module shipment between the first half and the second half of 2014? Why has Win Win set a high PV module shipment target of 500MWp for 2017?
A: Win Win shipped 20MWp of PV modules in first-half 2014 and 60MWp in the second half mainly due to delay in connection of rooftop PV systems to power grids in Italy.
Having been in the EPC sector for 10 years, Win Win thinks it is now harvest time and therefore aims at high growths for annual PV module shipments: 132MWp for 2015, 250MWp for 2016 and 500MWp for 2017. Europe accounted for 60% of Win Win's 2014 shipments, Japan for 15% and the US and Australia together for 10-15%. Win Win expects Europe to account for 60% of its 2015 shipments, followed by Japan with 20-25% and the US and Australia with 15%.
It can be seen that governments in Europe, Japan, the US and China are inclined to shift policy support from PV power-generating stations to rooftop PV systems. Energy conversion rates are key to rooftop PV systems, and this affords development opportunities for Taiwan-based solar cell makers because they are strongly competitive in terms of energy efficiency and production cost.
Q: Taiwan's solar cell manufacturing industry is expected to be consolidated arising from the US imposing anti-dumping tariffs. Room for price bargaining will narrow as there will be fewer but larger makers. How will this affect Win Win?
A: I appreciate such consolidation because this will be conducive to orderly and healthy development of Taiwan's PV supply chain.
Q: Since global oversupply started in 2011, prices have been a major concern in the PV market. How does Win Win differentiate itself from competitors?
A: Although the global oversupply has led to buyers' emphasis on prices, demand for products with high energy conversion rates has been increasing, pushing suppliers to making efforts to hike energy conversion rates and, at the same time, maintain quotes at buyers' acceptable levels. As a result, prices have been dropping each year but mainstream energy conversion rates have been rising.
PV modules made of polycrystalline solar cells and monocrystalline ones respectively accounted for 90% and 10% of Win Win's shipments in 2014, and the proportions will change to 60% and 40% respectively in 2015 mainly due to adoption of high-efficiency PERC (passivated emitter and rear cell) monocrystalline solar cells. Win Win in early 2015 offered 300W high-efficiency PV modules, each of which was made of 60 PERC monocrystalline solar cells, with power leakage from solar cells to PV modules controlled within 1%. Win Win will begin to ship such PV modules in the second quarter of 2015 and expects to ship 5MWp in 2015, with such PV modules to be used in rooftop PV systems mainly in Europe, Japan and the US.
Q: With the US anti-dumping tariffs, how will Taiwan-based solar cell makers be situated in the US market?
A: The tariffs make it unnecessary for China-based PV module makers to procure Taiwan-made solar cells for exports to the US. And the US lowering anti-dumping and anti-subsidization tariffs imposed on China-made PV modules in 2012 to 17.50% will render China-made PV modules sufficiently price competitive in the US market. As a result, Taiwan-based solar cell makers' business opportunities in the US market lie in own-brand marketing of PV modules made of PERC monocrystalline solar cells because these makers are strong in PERC technology. For example, there is strong demand for Win Win 300W PV modules made of PERC monocrystalline solar cells in the US market and Win Win has set up marketing channels there since it began to tap the market three years ago.
Q: Global demand for rooftop PV systems mostly exists in developed countries. How can it sustain Taiwan's annual solar cell production capacity of 10GWp?
A: Global PV demand in 2014 was estimated at 40GWp and 10-12GWp of it came from rooftop PV systems. Taiwan's annual production capacity for PERC monocrystalline solar cells is about 1.0GWp at present, taking up less than 10% of global demand for rooftop PV systems.
Since Taiwan-based solar cell makers are unable to compete with China-based fellow makers in prices for models with low to medium energy conversion rates and proportions of output for PERC monocrystalline solar cells are key to their profitability, it is important for them to build up own brands now.
