PV enthusiasts-
Perhaps a fresh perspective on these products deserves some attention after the
last few thoughts shared by Bill & Joel, who are industry respected stalwarts
that deserve and receive alot of respect from me and the rest of us.
As some of us grew up when we thought Japanese types of products- from toys to
cars where less durable, they eventually created fantastic products to be the
envy of the world. Just look at most electronic gadgets and cars 10 years ago
to draw some distinctions.
A new dawn has arrived, which parallels this analogy. The Chinese have been
able to import the technology and systems to develop world class modules. using
alot of the pick and place robots the other contenders are using. SunPower
makes the lions share of their products in the Philippines and I recall the
building is so large and long, that you can see the curvature of the earth.
Just as the computer revolution started in the US, most of the parts and
silicon platforms have been made in Asia. Sure it can take time to polish the
products, but this is inevitable. China will continue to thrive and deliver
competitive products that will have quality attributes for years to come as
their population gets increased education and awareness of what the world solar
stage demands- inexpensive modules.
The PVUSA facility was circa 1986 and sold to David for a buck in 1997. Alot of
innovation and understanding came from those formative years and we as an
industry are all grateful. As Joel points out, if you are going with these
types of products, "check in" with your clients, as this is one of the ways to
monitor any signs of degradation. Yes, a Barrons report shared with me says
many of the similar things about our Chinese manus' thats hard to ignore:
June 3, 2009, 1:53 pm
China Solar Vendors Slash Module Prices, Analyst Says
Posted by Eric Savitz
Chinese solar vendors are offering modules for prices far below what most
investors likely suspect, according to Hapoalim Securities analyst
Gordon Johnson.
In a research note today, Johnson asserts that some of his “most trusted
industry contacts” say that companies like Yingli (YGE), Suntech (STP) and
Trina Solar (TSL) are offering modules for sale at
$1.70-$1.80/watt, or 1.21-1.28 Euros/watt. He notes that at the recent
Intersolar conference, the talk was that solar modules were
priced in the 1.60-1.70 Euros/watt range.
Johnson contends that U.S. investors may be underestimating the ability of
Chinese solar module companies to significantly lower their non-silicon costs -
specifically, by cutting wages. He writes that “we are hearing that Chinese
solar module factory workers are willing to work for little-to-no-pay” in order
to improve their company’s competitiveness and “as a matter of national pride.”
According to Johnson, volumes available at the lower price levels is
effectively
unlimited.
Johnson, who already had been bearish on the sector, notes that there are 1.5
GW of solar module inventory in the channel, and that Spain, which in 2008
accounted for nearly 50% of global module consumption, “has basically gone to
zero.” His view: “At the risk of stating the obvious, this does not bode well
for U.S./European solar module vendors given the commodity underpinnings which
define this space,” he writes. “Assuming these prices stock, we believe solar
industry fundamentals are in bigger trouble than we expected this year.”
Johnson specifically advises taking short positions in SunPower (SPWRA),
Q-Cells (QCE.DE), First Solar (FSLR) and SolarWorld (SWV.DE).
So- where does this leave us?
Clearly this trend is going to continue and perhaps look at it another way. If
mod pricing will continue to decline over the next 10 years and infinity and
there are a few companies out there who will fail with their products, we will
have a declining cost basis for our client base to purchase new products at
perhaps a cost delta that is palatable and I envision below dirty power rates.
Will it be the $1 watt? This would be a huge milestone and we could be there
with growth and innovation leading the race. Increased cell efficiencies with a
new mix of products yet to be birthed......
I am not trying to justify bad manufacturers from pumping out poor products,
but GM did it for quite a few years in the race to compete and now we own (as a
country or the treasury) 60% of the company, which could also be worthless
depending upon the tempo of our economy.
The irony is everywhere. We used to be dissapointed that the Chinese government
had their hands in their private industries and where constantly meddling, but
we are not doing the same- autos, banking and insurance to name a few.
In light of this, even looking at a companies finacials, and peering into the
Chinese manus balance sheets could also be unclear, again, as the Barrons
reports suggests this might be not telling the whole story.
So, the cost per watt conversation is the one we will have for some time, as
this is the leading metric and I think it is more than just a few pennies per
watt, but the delta is significantly wider. On the residential scale, of the
2-5kW range, not as influencial, but do a 50kW and north of this and the impact
is tangible. in our free market economy you can understand a company offering
these products and really stinging the company offering Solarworld (oh, wait -
Arco, Siemens, Shell) for a particular project. Mods represent the largest
piece of the solar pies project costs, so it is plausible to look for
alternatives.
A way to navitage through this minefield of uncertanty, is we need as an
industry to perhaps move the conversation from cost per watt to a performance
based reality. If we buy power from the utility per kW, my vision is some day
we can orchestrate the same. This will greatly improve our field of interest
and everyone benefits when performace meets the expectation, regardless of
system size. Our treasury, at the fed and state levels will pay proportionatly
for actual energy created, levelizing the conversation about subsidies with
real time, empirical data to back up the efficacy of what we are doing.
For a better tomorrow~
Keith
________________________________
From: Joel Davidson <joel.david...@sbcglobal.net>
To: RE-wrenches <re-wrenches@lists.re-wrenches.org>
Sent: Sunday, June 7, 2009 7:11:11 AM
Subject: Re: [RE-wrenches] Chinese solar cells and modules and pricing
I have a lot of respect for Bill, not just because he sometimes agrees with me
(smile), but because he worked at Davis California PVUSA and other places and
saw a lot of innovative, but flawed PV. He knows first-hand that dozens of PV
companies and/or products have come and gone in the search for the $0.10/kWh
holy grail.
I wish the Chinese well, but am concerned about the wisdom of buying Chinese
modules. On the one hand, I welcome China into the league of nations and
support their progress toward democracy. Hopefully, Chinese national and local
dictators will grow up and become civilized. On the other hand, latest reports
from China, according to Hapoalim Securities analyst Gordon Johnson, is that
Chinese solar module factory workers are willing to work for little-to-no-pay.
There's a big difference between "volunteering" in the war of economic
imperialism against the West and the volunteer work Wrenches perform in their
communities and around the world.
But back to nuts-and-volts. Last year China became the largest producer of
crystalline silicon solar cells. Although some companies admit that their
modules are made in China, few companies with factories outside of China say
they build their modules with cells outsourced from China. This is not all bad
news because crystalline silicon cells are some of the most stable products
ever made. However, you do have to protect yourself and your customers'
investments, especially if you are a California contractor required to give
10-year system warranties. I recommend getting each module's IV curve, keeping
the IV curves in your customer file, performing pre-installation tests (at
least Voc and Isc), and performing annual systems inspections and tests. Look
for cell-tab corrosion, front and backsheet delamination, and discoloration.
Most customers will pay to see you once a year if your manner is professional
and your service charge is reasonable.
Joel Davidson
----- Original Message ----- From: "Bill Brooks" <billbroo...@yahoo.com>
To: "'RE-wrenches'" <re-wrenches@lists.re-wrenches.org>
Sent: Saturday, June 06, 2009 10:19 PM
Subject: Re: [RE-wrenches] Chinese solar cells and modules and pricing
> All,
>
> How many of these Chinese manufacturers will still be in existence in 5
> years (probably less than half)? Are you really willing to risk a company
> and reputation for a few pennies per watt? Certainly several of the big
> companies are likely to survive, but you are playing a new game of "Chinese
> roulette" with many of these companies.
>
> These are manufacturing companies, not stable companies with a long past and
> future. The value proposition is so dramatically different from a major
> company to one of these Chinese manufacturing companies to make the
> comparison nearly idiotic. Most of the installers using these products have
> way more guts than I have. Many will find their guts on the ground as the
> get disemboweled by bad choices. Don't you love the imagery.
>
> Yingli's one of the big companies now, they might survive. I'm sure they are
> learning every month that they proceed how to better manufacture modules.
> They have been a player for two years--no major problems--YET. How does a
> year in the field show that a company is doing everything correctly? Oh, and
> their fuse size is 10 amps on an 8 amp Isc module. They obviously are not
> all that sophisticated.
>
> Folks, you need to let the dumb contractors screw up and buy the cheap
> stuff. Now, more than ever, you have to sell on brand. The more the young
> Chinese stuff gets in the field and craps out, the worse our industry is
> going to take it on the chin in the public eye. It's just not worth the
> price difference. As Joel points out, let the multi-MW projects make the
> stupid mistakes--that will just scare away the capital investment--oh wait a
> minute--we really need that.
>
> Bill.
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