This article is taken from the September/October issue of Renewable Energy Focus (REFocus) magazine. For a free subscription, click here.
Trina Solar is one of China's success stories in the solar photovoltaic (PV) industry. The company appears to go from strength to strength – spurred by growth in the market, but also through its own focus on quality and meeting international standards.
Solar PV has enjoyed tremendous growth in recent years with 27.7GW of new grid-tied installations globally coming on stream in 2011 alone, bringing cumulative capacity to around 67.4GW worldwide (according to the European Photovoltaic Industry Association).
Moreover, by 2015, cumulative capacity is forecast to reach 130-200GW.
However, like other industries, the sector has been hit by the financial crisis. And policy uncertainty – especially in Europe where a number of countries have reduced feed-in tariffs (FiTs) and other support mechanisms for solar PV – is also rife. On top of this, oversupply continues to reduce module prices dramatically at the start of 2012, making life especially difficult for manufacturers.
Even so, Trina Solar's ceo, Jifan Gao, remains optimistic: Speaking during Q4 2011, he told Renewable Energy Focus that he expected “a more stable market situation will be restored in EU in the second half of 2011...[and] though the overall growth rate might not be comparable to the previous five years, PV adoption will still steadily increase.”
To add to that, he says, there should also be growth in some of the more emerging markets, for example the U.S. (aside from California which is already a strong market in its own right). Gao also believes that China is one to watch, and not just as a centre of module manufacturing: “China is expected to enjoy a policy-driven PV market surge in the next five to 10 years, with the Government's recent decision to double its solar installation target in the next five and 10 years respectively,” he adds. “Potential [other] high-growth markets include India, Israel, and Australia, to name just a few.”
The rooftop PV market will be increasingly important for the industry, especially in areas with high population density, Gao believes, suggesting it can be a door-opener in emerging markets. Indeed, this is reflected in recent feed-in tariff programmes, which increasingly focus on rooftop – rather than ground-mounted – solar PV systems.
Climbing the rankings
As with most large companies, Trina Solar aims to become market leader. If it continues at its current pace, it may well give the Suntech's of this world a run for their money. In 2010, Trina reported revenues of US$1.868 billion, and today has over 16,000 employees across 11 offices worldwide.
According to Renewable Energy Focus editor David Hopwood, who recently saw Trina's Chinese operation for himself as part of an organised press tour, Trina recognised that it needed to position its brand carefully to avoid the traditional stereotype aimed at Chinese manufacturers: “Walking around Trina's factory gives a feel that the company understands the quality message, and is investing in that. And of course it needed to if it wanted to avoid the charge levelled at many Chinese manufacturers that quality is inferior to products from Western counterparts. In addition to the product itself, Trina also brought in experienced PV executives from outside of China – and this has for example driven the high-profile brand messaging like the Formula OneRenault sponsorship and ‘showbiz' tie ins. [see later in article]. Some people may question if a PV brand really fits in with motor racing, but Trina's assertion that it can in some way work towards ‘greening' the F1 community, not to mention potentially get involved in electric car projects as a result, seems compelling – at a brand level at least.”
And the company appears to be making good strides forward. “From even just four or five years ago, the growth in Trina Solar has been phenomenal,” says Ben Hill, vice president Sales and Marketing Europe at Trina Solar. “The growth is based around quality, based around doing what we say. When our customers see growth in Trina Solar and the sustainability of our business model and where we're going, they want to work with a company like Trina. This is why many of the top customers, many of the utilities, many of the customers who have got long-term pipelines, long-term plans, want to work with us.”
The company is ranked 7th in SolarPlaza's list of the top 10 companies for estimated module production capacity in 2011 – its annual capacity is estimated at 1.9 GW of monocrystalline and polycrystalline solar PV modules.
Trina Solar's TSM-210DC80 module is also ranked 7th in SolarPlaza's top 50 solar PV module efficiency (monocrystalline) list. The module has an efficiency of 16.40% and a cell efficiency of 18.10%. For comparison, the top ranked SunPower E20/333 Solar Panel has a 20.40% module efficiency.
Meantime in China, the company's 2010 market share was around 7%. The company says it has built numerous projects in its home market, including the installation of 40 off-grid solar PV power stations in Tibet in 2003, and the completion of a 20 MW solar power station in Sheyang, Jiangsu Province, last year. “So far the solar installation market in China is limited but there is huge space of further development,” Gao says. “We see a common confidence that this market will become world-leading in the decades to come.”
[Editor's note - indeed, there are early signs that 2012 may well be the start of something big for the Chinese PV marketplace. Speaking at the World Economic Forum in Davos, Gao predicted China would install 5GW of panels; in addition Suntech's ceo Zhengrong Shi estimated the nation may add 4 gigawatts or more of panels in 2012 - source, Bloomberg].
Keys to success
Part of Trina Solar's success has been its focus on quality and certification, it says. All components are being tested to standards such as UL and TÜV, and the company has already raised two standards to IEC/TC82, which is a first among Chinese manufacturers, according to Gao. “This marks the beginning of Trina Solar in the participation of the global PV standards setting, with the aim to contribute to the sustainability of the PV industry,” he explains.
It must be doing something right. Its modules are not the cheapest on the market, but the focus on quality and reliability means customers keep coming back for more. The firm believes part of its success boils down to its single campus approach “to ensure optimal yield and quality throughout the entire manufacturing process”.
The single campus approach does not only apply to Trina's own operations, but many of its key suppliers are putting their facilities close by. “That's similar to the concept of the Japanese car industry. We reduce our lead times. It enables us to reduce our costs and get products to the customers quickly as promised,” Hill explains. Full integration can be “absolutely critical for success”, he adds.
“It not only allows you to manage quality, but also allows you to minimise your costs, and fully understand the issues that make up one part of the chain and how that will affect the next part of the chain. It's not only about cost. It's really about the product control of managing your lead times and making sure you have cash in stock.”
Another part of Trina's manufacturing ethos is to make sure the company is run in a sustainable fashion. The company has already invested significantly in recycling programmes, and is targeting reduced electricity consumption in all workshops. Similarly, Trina sees the importance of sustainable manufacturing, and has a company goal of reducing logistics pollution.
It has also been awarded ISO 14001 for environmental management while the Silicon Valley Toxics Coalition has ranked Trina Solar second in its evaluation of companies' social and manufacturing responsibility – along with their efforts to improve the sustainability of the PV industry. Hill explains: “You see more and more importance being placed on things like: Are they saving the planet? What is their carbon footprint? Are they environmentally friendly? Are they socially responsible? Do they look after their employees?” He says these aspects are becoming just as important for customers as the more ‘traditional' concerns of price and efficiency.
Driving costs downs
The company is not resting on its laurels, Gao continues. It has already reduced the cost per watt from nearly US$3/W at the end of 2008 to around US$1/W by the end of 2010, marking a reduction of almost 66% in three years, but he says Trina will not stop there: “In the future, Trina Solar will continue to invest in its production, quality and technology, with the purpose to further reduce the cost and lead the sustainable development of solar PV towards grid parity as early as possible.”
From 2009 to 2010, Trina says it tripled its R&D investment to US$19m. But the Chinese solar giant expects to apply for 2000 patents in the next five to 10 years through independent and joint R&D:
“In the next three to five years, Trina Solar expects to conduct a couple of joint research [projects] with world top PV R&D organisations and institutions, to develop and industrialise the Film-Si/C-Si HIT Cell, with efficiency up to 21% and Back-contact cell mono with the efficiency of 21.5-23.5%,” Gao explains.
The company already participates in R&D partnerships with leading institutions such as Massachusetts Institute of Technology – MIT (for technology transfer and collaboration), Solar Energy Research Institute of Singapore – SERIS (to develop a back contact cell), the University of Queensland (1.2 MW rooftop installation) and Australia National University (to develop n-type mono c-Si cells with efficiencies of 20% and p-type multi c-Si cells with up to 19% efficiency).
Partnering has advantages, Hill notes: “Your costs are going to be significantly less, because you're typically cost-sharing, in which case you've got a huge resource of R&D, and what you really need to do is co-ordinate it. You need your internal R&D teams to understand what's going on and guide the universities, but you don't have everything in house.”
He adds: “A lot of the scientists we have in house have come from these universities, so there's already a relationship, there's already the partnership in terms of how we can work together to increase efficiencies, or lower the cost etc.”
The celebrity factor
Effective marketing has also proved crucial to the company's growth. It has adopted a strategy, perhaps better known among giant multinationals in other industries, of ‘celebrity endorsement'. It joined up with Pamela Anderson on a project for Haiti, and this year's Intersolar saw Grey's Anatomy's ‘Dr McDreamy' – or Patrick Dempsey – at the Trina Solar stand.
More noticeably, Trina is a sponsor of Lotus Renault GP's Formula One team. There are F1 races in all of the major solar PV markets around the world, and it is one of the most viewed sports globally. “We're receiving a lot more calls and enquiries as a result of our brand being on this car and on the shirts, now that the Renault team is quite often on the podium, we're quite often very near the top – and Trina Solar's getting a lot of brand recognition from that,” Hill explains.
“There's a lot of preference for brands, and in the PV market today, there aren't a lot of brands at the end customer level.” Although a large part of the aim is to be seen, Trina Solar also believes its presence can help to ‘green' the F1 sporting community.
Although Trina Solar has clearly made a huge effort to get to the position it enjoys today, the fact that many Chinese companies receive unrivalled support from the Chinese Government compared to their Western counterparts cannot be ignored, and is proving increasing controversial.
This discussion has once again flared up with the recent bankruptcy of U.S. CiGS start up Solyndra, which failed despite Federal loans and loan guarantees from the US Department of Energy (DoE). Other companies to hit the buffers include Intel startup SpectraWatt, as well as Evergreen Solar – which says it could no longer compete with cheaper product on the market.
And in recent news, the United States International Trade Commission (USITC) says it believes there is a “reasonable indication” that US solar companies face unfair competition from Chinese silicon solar photovoltaic (PV) manufacturers. Indeed, in recent weeks, evidence appears to have emerged of massive spikes in solar products shipped out of China into the U.S. (including Trina and Suntech manufactured products).
Whichever side of the debate you stand (and there are plenty in the U.S. who believe Chinese manufacturing influence bringing down prices is a positive thing), there is no doubting that the Chinese establishment threw its weight behind solar PV early on. According to GTM, it is estimated that Trina alone has received over US$4 billion in Chinese Development Bank loans. [Editor's note: Trina clarified that they signed a 6-year framework agreement for over US$4 billion, and that these CDB agreement amounts are not simple “ready-available credit lines”. A source explained that annual spending/loan purposes must be approved based on specific purpose, cash flow, profitability, etc].
Compare that with the DoE, which has spent US$10 billion on solar in total. LDK Solar, which tops the 2011 capacity list from SolarPlaza, appears to have received around US$9bn (see editor's note above).
This raises the question of whether Chinese solar companies are at an unfair advantage.
The U.S. in particular appears increasing irked by such a perceived ‘unlevel' playing field, and the general Chinese strategy of dominating manufacturing in a sector, leading to exports which flood a market with product leading to low prices across the board (and thus knocking out a large number of competitors) has lead to increasingly vocal protests. There have even been complaints to the World Trade Organisation (WTO).
Analysts say it is not only Western companies struggling at the moment. Prices continue to fall, there is a serious oversupply situation and Chinese companies themselves are struggling too.
Perhaps not surprisingly, no-one at Trina Solar was keen to respond to this point directly, but Hill maintains that China's Golden Sun programme and the Procession projects are aiding solar in the country.
Furthermore, he believes the Government will start helping the solar industry locally – not just domestic companies, but any solar company setting up shop in China. “Once the Chinese make a decision to go and do something, once the cost level comes down a little bit further, it will make financial sense again to use PV within the electricity network. This could also prevent brownouts, and prevent where you've got long solution lines. Just to put a PV plant in there to boost it up before it hits a village in the mountains or something – Photovoltaics will make sense.”
NB: Renewable Energy Focus would like to disclose that the editor's recent trip to Trina's manufacturing plant in China was part-subsidised by Trina Solar.
Legal latest: On 2 December 2011, the U.S. International Trade Commission issued a unanmimous preliminary determination that Chinese trade practices are harming the U.S. domestic solar manufacturing industry. The next step in the trade case will be Commerce’s Feb. 13 preliminary determination on whether to levy countervailing import duties to offset the effects of any illegal Chinese subsidies. On March 28, Commerce is scheduled to make its preliminary antidumping determination, imposing duties to offset the effects of Chinese import pricing at artificially low prices.
About: Kari Williamson is a freelance journalist specialising in renewable energy. She is the former Assistant Editor at Renewable Energy Focus