Solar Panel
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The Leading Solar Panel Brands in 2023 [Installation Manufacturing]
As solar panels’ decreased in the past decade, their popularity increased. Now, more solar panels are installed year after year, and the big expansion of the market has led to a number of new solar energy companies emerging. However, most solar panels installed in the US are not manufactured here.
Most of them are imported from China or so has been the case. However, as a new 30% tariff has been imposed, more US companies started producing solar panels. Currently, there are several US-based solar panel manufacturers. You can read more about how solar energy helps the planet and your wallet.
As solar panels create over 2.5 times more jobs for every 1 invested when compared to fossil fuels, individual states with high solar potential began offering state incentives for solar systems. The Federal Solar Investment Tax Credit offered up to 26% back for any solar installation. This way, solar panels are made into the energy source of the future, and every solar energy system is sure to pay off in record time.
Top Solar Panel Companies in the US
However, browsing all these companies and ensuring you find the best deal for your solar energy systems can be a big hassle. As little is generally known about these companies, making sure that you get a contract with a good solar company cannot be easy. The installation process is complex, coupled with the cost of solar power systems, which is very expensive, hiring the best solar panel companies will be crucial. Here is some information on the top US solar energy companies:
| Blue Raven Solar | Orem, Utah | 2014 |
| Elevation Solar | Chandler, Arizona | 2014 |
| Momentum Solar | South Plainfield, New Jersey | 2009 |
| Palmetto Solar | Charleston, South Carolina | 2010 |
| PowerHome Solar | Mooresville, North Carolina | 2014 |
| SunPower | San Jose, California | 1985 |
| Sunpro Solar | Wildomar, California | 2008 |
| Tesla | Austin, Texas | 2006 |
| Trinity Solar | Freehold, New Jersey | 1994 |
| First Solar Inc. | Tempe, Arizona | 1999 |
Top Solar Panel Installation Companies
Now that you have basic info on the best solar panel installation companies let’s move on to find out more about them. When deciding which solar contractor to hire, details such as revenue, net income, and market cap can be a big help in deciding which company you want to do business with. Furthermore, knowing the pros and cons of these companies before installing solar panels can spare you a lot of headaches.
Blue Raven Solar
Blue Raven Solar 2021 estimated revenue was 135 million. It is a private company with more than 1,000 employees. It was founded in 2014 in Utah and is currently one of the fastest-growing companies so far. It is known for its mission to make solar power owners’ lives easier and to be one of the best solar panel companies in the market.
Blue Raven Solar works in 17 different states. Blue Raven also offers financing on its solar system solutions. As one of the top solar panel installers, this company also does the financing for you and estimates the payback time. For their tip solar panel systems, the payback time is as low as 18 months. The company also allows you to lease solar panels and also purchase entire solar power systems so that once they’re paid off, you actually own your system.
Elevation Solar
Elevation Solar had revenue of less than 50 million in 2021. This is still a very good result, especially for a company established in 2014. With less than 500 hundred employees, it is still considered a large private company. Their mission is to elevate energy experience for all who would like to go for solar energy systems and those who want to make their homes more energy-efficient.
Elevation solar only services five states so far. As one of the fastest-growing companies in the solar industry, the company is still one of the best for home solar solutions. In 2020, Elevation acquired Curb Energy so that it now offers Smart energy storage and energy use monitoring systems, ensuring high-quality service for long-term satisfaction.
Momentum Solar
Momentum Solar has been voted the 58th best place to work in 2022. With over 2,000 employees, it is one of the bigger companies on our list. The company did not disclose their revenue, but the fact that they’ve been in the market since 2009 speaks for itself. This is one of the leading renewable energy installers in the US and one of the leading residential solar energy contractors.
Momentum Solar offers an all-in-one solution. From drafting the system design, inspecting the location and your roof to installation and maintenance of your solar panels. The company offers combo products as well. These products save you money as you purchase them all at once and make a single payment. Their unique approach to customer service means that you will only be talking with a single person who is in charge of taking care that the installation process goes smoothly.
On the other hand, Momentum Solar is only available in 10 states. This may be a downside to some, as the solar market is flooded with companies working in 30 states. However, if you would like a complete set of solar services, choosing the best means choosing Momentum Solar.
Palmetto Solar
As a private company with over 50 employees, Palmetto Solar is a smaller but stable renewable energy installer in the US. Their mission is to make solar panels installation an easy and smooth process and to join the list of the best solar energy companies one day. For now, they FOCUS on spreading the best solar energy practices to help fight climate change.
Palmetto Solar has been graded as one of the best solar companies in the United States. This solar installer offers a decentralized installation process, which is a unique approach in the industry. This and other optimization solutions have made the company one of the cheapest in the market. It offers financing starting as low as 79 per month.
PowerHome Solar
PowerHome Solar employs more than 2,000 people. Established in 2014 in Mooresville, North Carolina, this private company has made it their goal to help as many residential solar and commercial solar customers install the best solar panel systems they can. It works in 15 states and looks to expand even further.
PowerHome Solar has been in the business for more than eight years. They mostly rely on monocrystalline solar panels to deliver high-efficiency panels and ensure maximum power yield for the surface covered in solar panels. PowerHome Solar also offers Smart home solutions that drive down your energy use and reduce the initial costs of going solar.
SunPower
With a revenue of 1.9 Billion, SunPower is one of the top US solar companies. Its net income was 8.4 million, which may be a bit low for a company of this size, but it translates to lower pricing, so it ensures stable income. With a market cap of 1.8 Billion, it is also one of the big names on our list.
SunPower works in 50 states and offers unique product combos. It can deliver utility-scale solutions, and its design app allows even newbies to get an estimate of what their solar system should look like. The company also offers packaged solar panels and solar batteries. However, some customers report less-than-ideal customer support, especially once the installation is finished.
Sunpro Solar
Established in 2008, Sunpro Solar now employs more than 500 people and has a revenue of between 50-100 million. It is one of the top solar power companies in the country. It designs solar energy systems for both commercial and residential solar customers. Since it was established in 2008, it already has a good history and plenty of positive reviews.
Sunpro Solar has so far installed over 30,000 solar power systems. It is one of the largest solar installers in the US, and it offers residential and commercial solutions. It is a subsidiary of ADT, so you can order home security solutions at the same time. This company is the perfect solution for those looking for high-quality and high-efficiency solutions for their new homes. Some customers have reported that the service quality suffered during the pandemic, but that is expected to alleviate as the measures lift.
Tesla
Tesla used to be called Solar City. It was established in 2006 and, after a few years of hardship, has joined Tesla to benefit from mutual research and funds. Now known as Tesla, it is one of the rare top solar panel manufacturers that also install their solar panels and can combine them with another product of its own: Tesla Powerwall. The company aims to help the world transition to a future powered by renewable energy and to alleviate the stress on the environment.
Tesla offers a price match guarantee, Powerwall with every installation that has been designed by them, as well as Tesla solar roof installation for those who would like to realize the full potential of their sun exposure. On the downside, customers have reported problems with their Tesla solar roof shingles, and you can expect significant delays, as the company takes more orders than any other solar installer.
Tesla is one of the top solar panel manufacturers as well. It also produces its own energy storage solutions and EVs (Electric Vehicles). Voted by many as the best solar energy company in the United States market, choosing the best for a complete solution means choosing Tesla.
Trinity Solar
Trinity Solar is the oldest solar installation company on our list. The company offers employment to over 1,000 people and is privately owned. Established in 1994, this solar installation company has a long history of solar works. So far, it has installed over 50,000 solar systems and works in eight states.
With more than 25 years in the business, Trinity Solar now works in nine states. It is a trusted name in the solar industry, and there are more than 50,000 satisfied customers to testify to this. Trinity Solar offers a power purchase agreement, paying in installments as well as the full immediate purchase of their solar panels.
First Solar Inc.
With total revenue of 3.1 billion and a net income of 98.8 million, this is one of the top companies on our list. The company provides solar panels for both commercial and residential solar solutions and is one of the first US companies to also FOCUS on the recycling of solar panels. It also offers financing for those who want to go solar right away.
First Solar Inc. is one of the few truly responsible solar companies working in the market. It offers some of the best solar panels in the market and does so in a responsible way: you can always check their water and carbon footprint reports to make sure your solar installation does not put too much burden on the planet. They FOCUS on solar that meaningfully fights climate change.
Top Solar Panel Manufacturers
The company that installs your solar panels is usually not the company that produces them. With a notable exception of Tesla, solar panels are usually produced by solar panel manufacturers. These companies are usually foreign companies that can afford to produce solar panels at reduced costs thanks to mass production, low labor costs, and foreign government subsidies.
Canadian Solar
Canadian Solar is an all-in-one solar manufacturer. It manufactures some of the best solar panels available in the US. As the company is available on the stock exchange market, it is a reputable company, with over 3.2 Billion in revenue. It produces high-quality solar panels for residential, commercial, and industrial customers.
Canadian Solar also produces other elements you may need for your rooftop solar system. Solar inverters are one of those and are our recommendation, especially if you use them with Canadian Solar panels. In case you are looking for a complete solution, Canadian solar can also help you design your own solar system and deliver the entire solar kit to you. This way, you know that your investment is worth it, for one warranty covers the entire system.
First Solar
First Solar is among the top solar panel manufacturers in the US. First Solar uses thin-film semiconductor technology to manufacture solar panels with a higher level of efficiency. The company offers a variety of products. The services that they provide include construction, solar panel maintenance, and recycling of solar panels. The latter puts them at the top of our list of solar manufacturers who FOCUS on sustainability in their operations.
Hanwha Q Cells
Hanwha Q Cells is also one of the top solar panel manufacturers in the world. This company took the lead of LG Solar and has also introduced plans to open a solar panel factory in the US. This company ranks the second most popular among US customers on several lists, as it offers panels of great quality. A giant in the field of solar panels production, this solar panel manufacturer plans on opening a total of 1.6 GW of annual production capacity and flooding the market with high-quality solar panels.
JA Solar
JA Solar was established in 2005. Since then, the company has chosen the mid-cost range of customers as their target group. JA Solar manufactures half-cell technology and is known for affordable products with little loss on the efficiency of the panels. JA Solar solar panels are especially suited for large-scale operations, such as powering large agricultural farms and running machinery.
Jinko Solar
Jinko Solar is a Chinese company working on US soil. Although the company itself did not open any factories in America, it has established a partnership with NextEra Energy, where the solar panels they produce are the result of joined efforts of the two companies and their research.
Jinko Solar has aimed its production towards big players in the solar field. Florida Light Power, a daughter-company of NextEra Energy, have announced they would be buying solar panels produced by Jinko Solar to a total number of seven million panels. This many solar panels will be used in establishing large-scale solar farms to power more than a single household.
LG Solar
LG Solar is one of the top solar panel manufacturers in the world. This South Korean company has started opening their production facilities in Alabama, US, as then-President Trump introduced measures to limit foreign imports and increase domestic production. With very developed technology, this solar panel manufacturer offers some of the best solar panels in the market.
With further investments into the technology of the solar cell and extending their solar system warranty, LG Solar is likely to stay one of the top solar panel manufacturers in the world. Their latest factory in Huntsville, Alabama, can produce as much as 500 MW of solar panels annually. Thanks to domestic production, LG Solar offers solar panels of great quality at reasonable prices.
LONGi Solar
LONGi Solar is among the best Chinese companies for solar panel production. In 2020 alone, during the lockdown measures, the company has managed to ship as much as 14.5 GW of solar panels. This is more solar capacity than entire countries have installed so far, putting LONGi at the very top of the world’s solar panel manufacturers. It produces monocrystalline solar cells assembled into ready-to-use solar panels.
Panasonic
Panasonic is a Japanese solar panel manufacturer. Through their partnership with Tesla, this company also makes solar cells in the USA. The manufacturing takes place in Tesla’s gigafactories and is one of the largest-scale solar panel operations in the world. Joined, these two companies make some of the best solar panels on the market and employ many Americans in doing so. As the majority of the production process takes place on US soil, this is one of the best solar panel manufacturers in the US.
SunPower
SunPower is a US-based solar panel manufacturer. SunPower is famous for its A-Series and X-Series solar panels. Both these lines of solar products have efficiency levels topping 22%. With efficiency this high, you may need fewer solar panels installed on your rooftop, bringing down the installation cost and ensuring home energy production is feasible to more people.
However, due to the high price of their solar panels, their best panels are produced abroad, mostly in the Philippines. SunPower, for now, does not intend to introduce their most-efficient production lines in the US, as the price of the products would be very high and unaffordable to many. Most of their solar cells are for now produced in Asia and are assembled in Mexico and France for the European solar panel market.
Tongwei Solar
Tongwei Solar is one of the best solar panel manufacturers out there. Tongwei Solar was established in 2009 and has since then managed to expand its solar production lines to 12.1 GW of annual output. Their products and services include the manufacturing of solar panels and solar cells by customer demands. An operation of this scale is always aimed at high players in the field, with a large purchase power and most outreach.
How To Compare Solar Companies?
When comparing solar companies, it is important at first to establish what type of solar companies you would like to compare. As there are two types of solar companies we have covered so far (solar installers and solar manufacturers), it is important to establish the difference between them and to understand what each of these companies does. As there are companies with a combined approach to solar systems, you should understand how both types work.
Firstly, solar installers are companies dealing with installing solar panels on your rooftop. The services they provide include, but are not limited to, the following:
- Rooftop inspection,
- Power use estimation,
- Direct sunlight estimation,
- Designing your solar system,
- Making a suggestion on the solar equipment you should use (solar inverters, solar power storage systems),
- Purchasing of the solar panels (not obligatory for every installer),
- Helping you deal or dealing with permits,
- Installing solar panels and other parts of the system: inverters, solar power storage units, etc.),
- Solar system maintenance, etc.
Therefore, when comparing solar installers, the most obvious parameters to compare them by are the price of their service, the scope of the services they offer, the reviews and possible recommendations by their previous clients, as well as the length of warranty you get for the work that is done. It is best to note these details and any questions you may have for company representatives.
Secondly, solar manufacturers are companies that manufacture or make solar panels that you can see on so many rooftops throughout the US. Solar manufacturers are not involved in the process of solar panel installation and cannot provide you with any similar service. The work that solar manufacturers do can be boiled down to the following:
- Research into novel solar technologies and improving the old ones,
- Research into the market needs per segment (residential, commercial, or industrial customers),
- Purchase of materials,
- Manufacturing solar cells,
- Assembling solar panels,
- Ensuring safety, longevity, and durability of the panels themselves,
- Ensuring the solar panels can withstand all weather events with no damage,
- Applying for certification, patents, etc.,
- Selling the solar panels on a wholesale market to retailers.
As the scope of work of a solar manufacturer is very different from the job of a solar installer, you should know what parameters to compare solar manufacturers by. You should only check the solar manufacturers once you know which solar panel brand you would like to purchase or which solar brand is offered by your solar installers. You should pay attention to the solar panel type, efficiency, the quality of connections, how well the panels perform in partial shade, etc.
Finally, there are also companies that combine the notions of the first two types. These companies both manufacture and install solar panels for you. On our list, there is only one such company, Tesla. Tesla manufactures solar panels and solar storage (with integrated solar inverters), and they also offer the service of installing these on your roof. However, this business model has its cons as well, as the waitlists are really long, and you may expect to wait up to a year for a Powerwall installation.
Who Is The Largest Manufacturer of Solar Panels?
The largest solar panel manufacturer in the US is First Solar. This company alone can produce 1.9 GW of solar panels per year. In the world, it is the LONGi Solar company, which can manufacture up to 14.5 GW of solar panels per year (2020 data). Some other companies may exceed this level of production, but they are not included in our list of largest manufacturers of solar panels, as they may only assemble solar panels.
FAQs
Which Solar Company is Best?
Which solar company is the best depends on what you are looking for. Tesla offers the best complete solution, from manufacturing to installation. SunPower is generally considered to be the best solar installer in the nation, while Blue Raven Solar offers the best financing solutions. Always understand your solar and energy needs before choosing one solar company over another.
Who makes Solar Panels?
Solar manufacturers make solar panels. Most of these companies are situated in China, with only a portion of them working in the US. Luckily, the number of US-based solar manufacturers keeps growing year after year, especially thanks to incentives established by the US government. In recent years, many foreign companies also increased their presence in the US solar market, predominantly by opening factories here.
Are any Solar Panels made in the USA?
Yes, there are several brands of solar panels that are made in the US. The most notable example is the Tesla Solar company, which manufactures their own solar cells, assembles the solar panels, and installs them on your rooftop. Thanks to the changes in the US policy towards the import of solar panels from abroad, the number of companies manufacturing their panels in the US is expected to grow.
Where are LG solar panels made?
LG solar panels are made in Gumi, South Korea, and Huntsville, Alabama. These panels are then sold worldwide, with the majority of the US-produced solar panels being kept for the US market. As the company headquarters are in South Korea, all solar panels are designed there first before being manufactured elsewhere.
Conclusion
Over the past ten years, the price of solar panels has dropped by around 75-80%. This has made solar panels available to more people who are now set for an energy-independent future. If you, too, are considering switching to solar power to run your appliances and power your home, you should first understand which solar companies have withstood the test of time and then decide on who you want to install your solar panel array on your rooftop.
The long read: The hidden contest of the cell makers
Predicting which technological pathway will dominate in solar cell production is somewhat of a fool’s errand. A battle is currently underway between several of solar manufacturing’s big guns regarding both wafer size and p-or-n-type technology, and the outcome remains to be seen.
A Tongwei solar cell factory in China. The company, which is already China’s largest cell producer, plans to expand to a total of 30 GW of production capacity by the end of 2021.
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Increases in wafer size are one recent technological development that demonstrates the accelerating rate of change currently underway in the solar manufacturing industry. In mid 2019, Zhonghuan Semiconductor very publicly pushed for wafer sizes to increase to 210mm. And while doubts linger as to whether a shift to such a large cell format is feasible, several key players had at least implied their support to Zhonghuan as 2019 drew to a close. What is abundantly clear is that change is afoot, surprising many in the solar industry.
Two of the largest independent solar cell manufacturers in the industry today, Tongwei and Aiko Solar have announced that they intend to deliver cells based on the 210mm wafer format to customers, with planned capacities of 10 GW and 5 GW, respectively. The two, neither of which has module production capacity, both appear to be opening a clear path for the 210mm format, which seemed merely a pipe dream only months ago.
Wafer size increases are nothing new, and Longi’s 166mm format appears to provide a significant performance improvement at a limited cost increase. By contrast, the 210mm proposal requires entirely new investments in production equipment, with all the associated risks. However, with 210mm supply likely to be forthcoming, some of the major module producers may indeed decide to switch to the larger format.
Cell competition
After years of Rapid development and fierce competition, China has the largest PV manufacturing base globally. But there has also been significant consolidation across much of the supply chain. In polysilicon production, the top five Chinese producers were responsible for around 80% of output from the country in 2019. On the wafer side, the massive expansion plans announced by Longi, Zhonghuan and JinkoSolar in 2019 – with new capacities of 50 GW, 25 GW, and 25 GW, respectively, to come online by the end of 2020 – will likely see the three supply the vast bulk of demand. If they execute on these plans, the three companies will supply more than 90% of the Chinese market by the end of 2020 and around 80% globally. In module manufacturing, the top 10 manufacturers, including nine Chinese module makers and Korea’s Hanwha Q-Cells, supplied around 65% of demand in 2018, increasing to almost 70% in 2019.
However, according to BloombergNEF, in the solar cell sector, the top five producers had captured only around 50% of the market in 2018. Even in the first half of 2019, the top ten supplied less than 60% of the overall market. This indicates that there is still room for consolidation among the cell production ranks and the investment in new lines indicate that consolidation will reach historical highs over the next two years.
Increasing consolidation
China’s largest cell producer, Tongwei, made a lot of progress in 2019. With the commissioning of its largest production facility in March, the company reached 20 GW of cell capacity by the end of the year. An additional 10 GW investment is currently underway, pushing capacity to 30 GW by the end of 2021.
Aiko Solar, another rising solar-cell star, made more aggressive expansion plans with money from capital markets. The recently listed company is already operating three production bases in China with a total cell capacity of 9.2 GW, and plans to expand to 22 GW, 32 GW, and 45 GW by the end of 2020, 2021, and 2022, respectively.
And Longi, the mono giant that is primarily focused on wafer and module production, has extended its vertical integration process by adding more cell capacity. In keeping with its tradition for bold moves, the company reached 10.25 GW of cell capacity in 2019 and plans to hit 25 GW by the end of 2020.
Cooperation and integration
There used to be two kinds of solar cell makers in China. The first type was the vertically integrated module makers like JA Solar, Jinko, Canadian Solar, and Trina. These companies tend to utilize their cell capacities for their own module lines, not only because of cost, but primarily because it gives them more flexibility in dealing with their customers.
The other type of Chinese cell producer has traditionally been pure-play; that is, an independent cell maker with no module lines. Tongwei, Aiko Solar, and Runergy are the largest of these types of producers. However, there is a swarm of other small cell manufacturers of this kind in China. One feature of such producers is that they have all been cautious not to move into the module sector and directly compete with their customers.
Beyond the vertically integrated players, the supply chain developed in such a way that Longi and Zhonghuan provided wafers; Tongwei, Aiko Solar, and other cell makers bought wafers from those two and produced cells. And then downstream module makers purchased the cells they required, at least partially, from the cell makers – a truly harmonious process.
However, this balance has been unsettled by Longi’s push into cell production. For the first time, there will be a solar PV giant with capacities in the tens of gigawatts, vertically integrated from ingots, to wafers, cells, and module production.
This development will no doubt frighten Longi’s competitors in the module segment, as well as its vendors, customers, and partners.
Technological divergence
Tongwei, for one, has repeatedly expressed dissatisfaction with Longi’s encroachment into “its turf” of cell production. This development may even result in Tongwei entering into wafer production – an area in which Longi has already made massive investments.
Aiko Solar, a p-type monocrystalline cell maker, was previously a strategic partner of Longi, but has now quickly embraced the 210mm wafer format, in spite of Longi’s promotion of 166mm. In testament to the strategy, on Jan. 10, Aiko Solar announced that its entire Zhejiang production base will be equipped for 210mm cell production, to the tune of 5 GW of capacity.
Beyond wafer size, there is also divergence in technology. While Longi believes p-type PERC technology has the potential for further improvement, maintaining its competitive position for two-to-four years, others are not so optimistic. For the next generation of cell technology, p-PERT may be abandoned for n-type technologies including TOPCon, IBC, and HJT – potentially leaving Longi in the somewhat unlikely position of being isolated from a technology perspective.
When Zhonghuan Semiconductor launched its 210mm M12 wafer in August 2019, few would have seen it as being the start of a PV production contest of major significance. But it appears that battle lines are forming. And an increasing number of companies are forming rank around the push to 210mm.
Risen, one of China’s biggest module producers, released its latest product with 210mm cells in December 2019, and also announced a strategic cooperation deal with Zhonghuan. The company believes the bigger cells are the best choice for its upcoming HJT technology.
Traditional module giant Trina Solar also appears to be responding positively to the 210mm proposal. It is deploying n-type TOPCon technology, and its lab has revealed how it believes large cells with passivated contact technology can be effectively deployed in module. Trina has presented panels using 50 1/3 cell pieces, interconnected with multi-busbar technology. This, Trina suggests, allows 210mm cells to be deployed with higher power, lower cell-to-module losses, and low hotspot risk. The company argues that this combination will come to dominate the technology landscape over the next three to five years.
In terms of cell cutting, GCL announced in January that its RD team had achieved a breakthrough in the cutting of 210mm mono wafers and that yields had been greatly improved. With modifications of existing cell cutting tools, reported breakages were minimal for some continuous 51 cuts.
Longi’s dilemma
A group of 210mm users is forming and will challenge the current market structure with new and powerful products. The question is, how will Longi respond?
It doesn’t seem easy for the company to either fight back or change direction. Having such confidence in the M6 (166mm) format, it made a big bet in terms of its wafer capacity. According to public statements, Longi has around 65 GW of wafer capacity finished already finished or under construction. The original target to reach this capacity was set for the end of 2021, but Longi is now ramping up wafer capacity to 80 GW by the end of this year.
It appears Longi was convinced that both the new n-type technologies like HJT/TOPCon and the 210mm format would not become mainstream in the next three years. With its market strength, Longi perhaps believed it had time on its side, and could calmly prepare for the next technology switch. The move to 210mm wafers seems to have disrupted Longi’s plan.
In the pursuit of ever lower LCOE, technological disruption has seen leapfrog development within the PV industry. Old giants caught on the wrong side of these developments have suffered as a result. The fortunes of manufacturers like Suntech, Yingli, and LDK are evidence of this.
No one would treat Longi simply as another one of those old giants, but it seems there is a hot contest ahead in the solar cell sector. A hidden battle is underway.
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The pv magazine editorial team includes specialists in equipment supply, manufacturing, policy, markets, balance of systems, and EPC.
PANEL SOLAR TONGWEI 440W 25 AÑOS DE GARANTÍA
Tongwei se ha convertido en una empresa fotovoltaica integrada con producción de polisilicio de alta pureza en la fase inicial, producción de células solares de alta eficiencia y producción de módulos fotovoltaicos de alta eficiencia en la fase intermedia, así como experiencia en la construcción y operación de centrales fotovoltaicas en la fase final.
Ha formado una cadena completa de la nueva industria de la energía fotovoltaica con derechos de propiedad intelectual independientes y ventajas líderes en escala, tecnología, costes y calidad, construyendo el diseño verticalmente integrado de toda la cadena de la industria fotovoltaica.
Tongwei sigue reforzando y ampliando sus ventajas, centrándose en la fabricación de silicio cristalino de gran pureza, células de alta eficiencia y módulos, y en la creación de un modelo de desarrollo innovador de integración de la pesca y la energía fotovoltaica en el ámbito de las aplicaciones. Tongwei se ha convertido en un participante importante y una fuerza motriz significativa para el desarrollo de China e incluso de la industria mundial de nuevas energías fotovoltaicas.
Tongwei ha sido clasificado como fabricante de módulos fotovoltaicos de TIER 1
Recientemente, Bloomberg New Energy Finance (BNEF) anunció la clasificación de proveedores mundiales de fabricación de módulos fotovoltaicos para el cuarto trimestre de 2022.
Para mejorar la capacidad de ID independiente, aprovechar las futuras oportunidades de desarrollo de tecnologías, productos y campos de aplicación básicos, y reforzar su competitividad básica, Tongwei ha establecido centros de tecnología fotovoltaica basados en sistemas de investigación científica que abarcan todos los sectores empresariales fotovoltaicos, y ha creado equipos de investigación científica y tecnología dirigidos por expertos de la industria, que trabajan para promover de forma integral la ID tecnológica y la integración de tecnologías en todos los eslabones de la cadena de la industria fotovoltaica.
En cuanto a células solares, Tongwei ha conseguido una serie de logros técnicos con derechos de propiedad intelectual independientes en campos tecnológicos básicos como la retropasivación por deposición de capas atómicas, la tecnología de emisores selectivos, la célula solar bifacial, las barras colectoras múltiples, las células TOPCon y las células HJT.
Por un lado, TW Solar se centra en la tecnología PERC de corriente principal actual, y la mejora y optimiza añadiendo otras tecnologías de proceso (como barras colectoras múltiples, rejilla densa y de alta resistencia, pulido alcalino, etc.) para mejorar la eficiencia de conversión y reducir los costes de producción.
Por otro lado, TW Solar sigue aumentando la inversión en el seguimiento y la ID de nuevas tecnologías fotovoltaicas.
En la actualidad, la eficiencia de conversión de producción en serie de las células HJT y TOPCon se sitúa en el nivel líder del sector.
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Understanding the Potential of the Chinese PV Industry
It is encouraging to see that China, the nation with the world’s largest population and carbon footprint, has committed to having CO₂ emission peak before 2030 and achieving carbon neutrality before 2060. China is focusing on photovoltaics (PVs) as a solution to renewable energy. Nowadays, China is not only one of the largest equipment producers but has also become one of the countries with the largest photovoltaic power generation. China has a global solar panel market share of over 50% and dominates more than 80 % of the world’s PV solar panel production [1]. more than 95 % of the world’s silicon wafer production, nearly 80 % of the world’s PV cell production and more than 65 % of polysilicon production [2].
According to China’s National Energy Administration, the country installed more than 30.1 GW of photovoltaic (PV) capacity in 2019, bringing its total installed capacity to 205.2 GW, 27% of total global installations. According to Reuters China aims to install more than 30 GW of new energy storage capacity by 2025 to further boost its proportion of photovoltaic power generation [3].
Figure 1 shows China’s dominant share in all steps of solar panel production. Figure 2 shows Chinese firms’ prevalence among the top global PV manufacturers.
China Dominates All Steps of Solar Panel Production
Chinese Solar Panel Makers Dominate Top-10 List by Shipment Volume (in million kilowatts)
CRYSTALLINE SILICON VALUE CHAIN
Traditionally, Chinese PV companies have been active primarily in the production of PV cells and modules. However, since the Chinese government has been determined to develop the entire value chain for PV cells at home, Chinese companies have been successively incentivized to enter upstream (crystalline silicon production and silicon wafer production) and downstream segments (development of solar power projects), as well as related machinery and equipment markets.
Steps in the Crystalline Silicon Value Chain
Crystalline Silicon Manufacturing
In the most upstream value chain part of the photovoltaic industry, polysilicon is the name of the game. The polysilicon price significantly affects the price of photovoltaic products. Although silicon is the second most abundant element on earth, it is mainly present in the earth’s crust as silicon dioxide and a comprehensive purification process is necessary to obtain polysilicon. The trichlorosilane Siemens method and the silane fluidized bed method are the most far spread methods for polysilicon fabrication.
Trichlorosilane Siemens Method for the Fabrication of Polysilicon
For the Trichlorosilane Siemens method, silicon dioxide is heated with carbon to remove oxygen atoms. In this process, liquid trichlorosilane reacts with hydrogen chloride gas so as to remove impurities by distillation. Subsequently, the purified material is heated to 1000 degrees to decompose trichlorosilane and obtain high-purity silicon [4].
The top three companies in this field are Tonguey, GCL-Poly, and Xinte Energy, which together control 58% of the market [5]. In the long run, experts predict that the price of polysilicon will decrease due to COVID-19 creating a supply crunch last year, where the polysilicon price has behaved opposite to the overarching trend; hiking 150% from the beginning of 2021 to the middle of 2021 (85 yuan/kg to more than 200 yuan/kg) [6].
Silicon Wafer Production
There are two main types of silicon wafers: monocrystalline and polycrystalline, with the difference that monocrystalline silicon wafers possess higher photoelectric conversion efficiency. Monocrystalline wafers are more efficient because they are cut from a single source of silicon, but more expensive and less sustainable than polycrystalline wafers that are blended from multiple silicon sources. The global share of mono-crystalline technology is now about 84% of total c-Si production, compared to 66% in 2019 [7] and in China, the trend of single crystal is especially pronounced as the market share of monocrystalline silicon wafers is currently at 90.2%, compared to 70.4% in 2019. As of today, Chinese wafer production amounts to 161.3GW annually and the market share of monocrystalline silicon wafers is expected to keep increasing in the future. In silicon wafer production a duopoly pattern can be observed in China with LONGi and Zhonghuan Energy as the two dominant players in this field, together accounting for about 56% of the market [8].
Cell Production
There are also two main types of photovoltaic cells: N-type and P-type. Every solar cell consists of a P-type layer and an N-type layer. A P-type solar cell consists of a thicker or equally sized P-type silicon layer over a thinner or equally sized N-type silicon layer. An N-type solar cell consists of a thin P-type silicon layer over a much thicker N-type silicon layer [9]. The term P-type refers to the fact that the cell is built on a positively charged (hence P-type) silicon base, doped with boron for conductivity. N-type solar cells are built the other way around, with the N-type side, doped with phosphorus, serving as the basis of the solar cell. The most powerful solar cells today available on the market are N-type solar cells due to their longer lifetime. N-type based technology is less prone to metallic impurities of the silicon and as a result less affected by light-induced degradation over time due to boron-oxygen defects [10] [11]. There are only minor differences in the process to manufacture P-type and N-type solar cells, but the fewer process steps in manufacturing P-type cells and economies of scale effects resulting from the relative P-Type technology maturity and mainstream adoption play in favor of P-type solar cells [12]. The caveat is that P-type cells have reached their theoretical efficiency limit at around 22.8%, whereas N-type cells have the potential to further reduce electrical losses in photoelectric conversion and reach higher cell efficiencies of up to 28.7%. Today, Chinese cell output amounts to 134.8 GW annually, an increment of 22.1% from 2019, and P-type cells account for 86% of the market. The production volume of N-type batteries only accounts for 3.5% and has shown only a slight market share increase since 2019, but with the reduction of production costs and the increase in cell efficiency, N-type cells will become more attractive in the future.
Schematic Representation of a Solar Cell
Module Production
Compared with other supply chains, module production is relatively simple. The shipments of the top five PV module manufacturers make up 86GW and account for 68% of the global PV installations. Today, photovoltaic module production in China amounts to 124.6GW annually, an increment of 26.4% from 2019.
Downstream Supply Chain
Photovoltaic power stations are the main customer of the photovoltaic factories. Like traditional power plants, photovoltaic power plants have centralized and distributed plants.
Centralized large-scale grid-connected photovoltaic power stations use a large number of photovoltaic arrays in uninhabited areas, such as deserts or hills. The power generated in a centralized photovoltaic power station is directly integrated into the public grid and then connected to high-voltage transmission systems to supply long-distance loads.
Distributed photovoltaic power stations refer to smaller power stations constructed by using open spaces or building surfaces, such as factory buildings and roofs of public buildings. Distributed photovoltaic power plants are a smaller investment, constructed faster and display a smaller footprint. Most distributed photovoltaic power stations are located on the user side and thus also reduce citizens’ dependence on the power grid and line losses.
In terms of market share, centralized large-scale ground power stations account for roughly 70% of the market and distributed power stations account for roughly 30% of the market [13].
Recycling Aftermarket
If not recycled properly, solar panels will cause severe environmental pollution. A typical crystalline silicon PV module is composed of glass (75%), polymers (10%), aluminum (8%), silicon (5%), copper (1%), silver, tin, lead, and several other metals and components [14]. Lead and tin from solar panels disposed of in landfills can leach into soil and groundwater and can pollute environmental ecosystems.
As of today, the recycling rate of waste photovoltaic modules in some countries has reached 95%, but in China at present recycling of waste photovoltaic modules is basically still blank in terms of policies and standards [15]. One of the important obstacles to recycling is the high cost and low profit. As waste glasses are not very valuable and only the waste modules’ silver components are of any significant value when recycling, the solar panel raw material value cannot outweigh its recycling costs. PV modules are expected to operate properly and not burden the environment for at least 20 years [16]. but China’s PV module after-market still has a long way to go. In China, the total revenue generated by a photovoltaic module is 56.53 yuan, but the recycling cost of each module is about 75 yuan [17] and adding to the recycling challenge, a large proportion of China’s built PV projects are not constructed on the ground and many times in the remote northwest areas, which will lead to increased logistics costs at the end of the panels’ lifetime. Besides the good intentions behind recycling efforts, the potential for a PV aftermarket needs to be understood. When a panel reaches this warranty lifespan it doesn’t necessarily mean it can’t produce energy anymore and needs to be disposed of. Indeed, there is the problem of degrading efficiency, but used panels can still be installed elsewhere on volunteer projects where any amount of energy helps [18].
CHINA’S PV INDUSTRY PROTAGONISTS
China’s PV industry is extremely competitive. In the following part, we spotlight some of the leading companies in the different parts of the PV value chain.
Upstream Players:
Tongwei Solar Tongwei Solar (stock ticker: 600438 Shanghai) was created in 2009 and began producing solar cells on a large scale in 2013, but the company got its start back in 1983 [19]. It is now the world’s leading crystalline silicon solar cell enterprise. It has four manufacturing bases in Hefei, Shuangliu, Meishan and Jintang, with more than 12000 employees. The existing crystalline silicon cell production capacity is 45GW. In 2023, Tongwei Solar will form a production capacity of 80-100GW, with an output value of more than 80 billion yuan. According to PV InfoLink report, Tongwei Solar’s total shipments has ranked first and lead other manufacturers since 2017 [20].
GCL-PolyGCL-Poly (stock ticker: 3800 SEHK), founded in 1996, is a green energy supplier in China, providing power and heat via cogeneration, incineration and wind power. As of 2009 it was the largest supplier of polysilicon in China, and is also a supplier of electronic wafers for the solar industry. It has established RD centers and incubators in Japan, Israel, the United States, Shanghai, Nanjing, Xuzhou, and Suzhou in China. over, its clean energy business covers North America, Europe, Asia, Oceania, Middle East and other regions. In 2020, it provides green energy 60 billion KWh which reduces 50 million tons of carbon dioxide emissions [21].
Zhonghuan EnergyZhonghuan Energy (stock ticker: 002129 SZSE), founded in 1958, is one of the most innovative silicon wafer producers in China. A government-controlled tech enterprise, Zhonghuan Energy owns ten research centers with more than 10000 employees. The firm has a leading position for silicon wafers, with a foreign market share of over 18% and a domestic market share of over 80%. The company has gradually developed high-efficiency N-type silicon wafers, which have a conversion efficiency of more than 26%. Looking ahead, Zhonghuan Energy will continue to innovate and strive to provide more efficient energy solutions to the public [23].
Xinte EnergyXinte Energy (stock ticker: 1799 SEHK), founded in 2008, is one of the largest Polysilicon production enterprises with a production capacity of 80,000 tons of high-purity crystalline silicon. It has successively built more than 5,000 off-grid and grid-connected new energy power stations, with an installed capacity of more than 18GW. The scale of photovoltaic grid-connected installed capacity has ranked first in the world for three consecutive years. Up to now, it has obtained 574 authorized domestic and international patents, and it is the enterprise with the most independent intellectual property rights and patented technologies in the Chinese PV industry. Its vision is to build China’s Silicon Valley and illuminate the future with renewable energy [22].
Midstream Players:
Jinko SolarJinko Solar (stock ticker: 688223 Shanghai) is one of the biggest PV makers in China. The firm produces silicon wafers, PV cells, and PV modules. At present, JinkoSolar’s products serve more than 3,000 customers in more than 160 countries and regions around the world and have ranked first in global module shipments for many years. The cumulative module shipments have exceeded 160GW in 2021 and the firm has domestic production facilities in Jiangxi, Zhejiang, and Xinjiang Provinces. Jinko Solar’s international production facilities are in Malaysia, Portugal, and South Africa and it has 16 other overseas subsidiaries in Japan, Singapore, Turkey, Germany, Italy, India, Switzerland, and Spain [24].
Trina Solar Limited
Trina Solar Limited (stock ticker: 688599 Shanghai) is based in the province of Jiangsu in China and it has several branches in the United States, Europe and Asia. Founded in 1997 Trina Solar has been world’s largest solar panel maker after it surpassed its rival Yingli. Trina Solar’s list of services includes the production of ingots, wafers and cells to the assembly of high-quality modules and an integrated supply chain [25].
YingliOfficially known as Yingli Green Energy Holding Company Limited (stock ticker: YGE NYSE), the firm was founded in 1998. It is one of the largest solar panel manufacturers in the world with a photovoltaic module capacity of 4 GWs. Headquartered in Baoding in China, Yingli has over 30 regional branch offices and subsidiaries. It has distributed more than 15 GW of solar panels to its customers across the globe. Notably, Yingli Green Energy began production of PV modules in 2003. It is pertinent to note that Trina Solar is the top shipper of solar panels, followed by Yingli Green Energy [26].
Motech SolarMotech Solar (stock ticker: 6244 TPEX) is a subsidiary of Motech Industries Inc with its headquarters in Tainan, Taiwan. It was founded in the year 1981 as a designer and manufacturer of test and measurement instruments before it went on to become a pioneer in manufacturing polycrystalline silicon solar cells. The firm is currently ranked one of the top 10 solar cell makers in the world. It is engaged in the manufacture of solar cells, PV modules, PV inverters, and PV systems [27].
Suntech PowerFounded in 2001, Suntech Power Holdings Co Ltd (stock ticker: STP NYSE) has its roots In Wuxi, in Jiangsu. The firm claims to develop, manufacture, and deliver the world’s most reliable and cost-effective solar power solutions. Suntech Power has so far supplied photovoltaic panels to over thousands of customers in at least 80 countries. Despite having had its performance peak in 2008 and seen a stage of decline since the wake of a glut in the market for solar power products, Suntech is one of the top 10 PV module manufacturers based on module production and shipments [28] and has been repeatedly ranked in the “Global Top 20 Companies On PV” in 2020 and 2021 [29]. Suntech Power has been a supplier of solar modules for several solar energy plants and systems around the globe.
Vertically Integrated Players:
LONGi SolarAmong the listed companies in the photovoltaic industry, LONGi (stock ticker: 601012 Shanghai) is the company with the highest revenue in the photovoltaic business (54.58 billion yuan). Founded in 2000, LONGi Green Energy Technology Co., Ltd. aims to become the most valuable solar technology enterprise in the world. LONGi is the largest company in China’s energy and chemical manufacturing industry and focuses on monocrystalline silicon wafers and PV modules. But LONGi is more than a product supplier; it also offers project consultation, design, installation, procurement, commissioning, operation maintenance and financing expertise. over, LONGI is a leading player in innovation, employing 800 researchers and owning 1001 patents. LONGI is at the forefront of cell innovation and pushes forward novel solar cell developments like Heterojunction technology (HJT), a panel production method mixing three layers of photovoltaic material by utilizing until the fringe amorphous thin-film silicon technology in tandem with the established crystalline silicon technology for increasing efficiency and power output to levels of 26.30%. In the past, LONGI has already been successfully spearheading the commercialization of new technology, like being a first-mover in adopting the Czochralski process that lowered production costs by casting more monocrystalline silicon in a single crucible [30].
Integrated Downstream Players:
JA SolarJA Solar Technology Co., Ltd. (stock ticker: JASO NASDAQ) develops, manufactures, and sells solar equipment and is also engaged in the development, construction and operation of solar photovoltaic power plants. The company’s main products are solar modules, including polycrystalline silicon solar modules and monocrystalline silicon solar modules. Its silicon wafers include monocrystalline silicon wafers and polycrystalline silicon wafers. The Company conducts its businesses in domestic and overseas markets and is engaged in the research, development, production, and sales of silicon wafers, solar cells, and solar modules. JA’s electricity from photovoltaic power plant operations is distributed to grid companies [31].
Downstream Players:
SFCE SolarSFCE Solar Group (stock ticker: 01165 HKEX) is the market leader in solar energy generation in China and has established solar power stations in areas including Shaanxi, Hebei, Gansu, Ningxia, Xinjiang, Hainan, Inner Mongolia, and Tibet. SFCE Solar aka Shunfeng International Clean Energy aims at creating a low-carbon environment through its integrated photovoltaic services and solar power station constructions and operations. SFCE Solar has been historically also engaged in research development and manufacturing of solar power products and as solar energy storage, but is since a strategy shift in 2015 exclusively pursued the PV service business with a low capital base (solar power generation, solar project development, engineering, procurement construction and operation and maintenance businesses) [32].
MARKET LEVEL ANALYSIS OF THE CHINESE PV INDUSTRY
Past studies have arrived at the conclusion, that the success of China’s PV industry cannot be exclusively explained by high investments in RD and superior innovation performance [33] [34] and point to the importance of technology acquisition and international technology transfer along the PV value chain as a critical success factor [35]. To discover the secrets behind the success of the Chinese PV industry in the global market, we will apply Porter’s Diamond Model, a model that helps to explain why certain industries within a particular geographical environment are more competitive internationally. The model includes four main dimensions of analysis: factor conditions, demand conditions, firm strategy, structure and rivalry and related and supporting industries and evaluates those against the external influencing forces of government and chance.
Porter’s Diamond Model of National Competitive Advantage
Factor Conditions
Factor conditions are special resources that are available in the nation such as natural, capital, and human resources. China is vast in territory and rich in natural resources with an area of 9.6 million square kilometers, accounting for 7% of the world’s total land area. China can provide enough land for the development of solar photovoltaic projects and has rich natural resources that are required for solar module manufacturing. It is estimated that the total annual solar radiation in Northern Ningxia, northern Gansu, southeastern Xinjiang, western Qinghai, and western Tibet is 7000~8000MJ/m2, putting it head to head with Europe’s sunnier regions such as Spain (8100MJ/m2) and Italy (7200MJ/m2) [36].
China’s vast mineral resource reserves in silicon, one of the most important raw materials in the PV industry, help the country gain a competitive advantage. The middle kingdom is the world’s largest silicon producer, with a production volume of six million metric tons in 2021 [37].
Besides that, labor costs in China are lower compared to western countries. Chinese average income in 2021 was 4246, while US average income was 25332 [38].
An additional factor condition in favor of China is infrastructure. Stretching 140,000 kilometers, China’s highway mileage is second to none. It exceeds the second-ranked United States by more than 40,000 kilometers and has more high-speed rail mileage than other countries in the world combined [39]. Overall, China is ranked 22nd in the world for “most developed infrastructure” [40] and its well-developed networks provide a solid foundation for the development of the photovoltaic industry.
Demand Conditions
According to the information from the National Bureau of Statistics of China, in 2021 China’s GDP has increased by 8.1% [41]. China is developing so fast that conventional power cannot meet the growing power demand which stimulates the Rapid development of photovoltaic power generation. China has added 54.88 GW of new solar power into operation in 2021 and is expected to add 75 to 90 gigawatts (GW) of solar power in 2022 [42]. According to the International Renewable Energy Agency (IRENA), the China solar energy market is expected to grow at a CAGR of more than 14.5% during the forecast period 2022-2027. Figure 6 shows the growing domestic PV demand.
Installed Capacity of Solar Photovoltaic (PV) in MW in China in 2013-2020
Next to domestic demand, international demand accounts for the majority of China’s PV demand. Chinese photovoltaic products are exported all over the world. According to the latest statistics from the China Photovoltaic Industry Association, China’s photovoltaic product exports amounted to USD 20.78 billion and newly installed capacity of overseas photovoltaics measured 85 GW in 2021 [43]. Looking from the international perspective, figure 7 shows historical PV installations demand. Europe had the largest PV installation growth demand until 2011. After that, China has gradually developed and became the largest market. It can be observed that there is strong growth momentum in the domestic as well as the international PV market.
Global Market demand for solar PV installations
Firm Strategy, Structure, and Rivalry
China’s photovoltaic industry has clear goals to promote the achievement of carbon peaking in 2030 and carbon neutrality in 2060. According to the five-year horizon Smart Photovoltaic Industry Innovation and Development Action Plan made by the Chinese government, the photovoltaic industry will integrate with the new generation of information technology to accelerate the realization of intelligent manufacturing, – application, – operation, – maintenance and – scheduling. By 2025, the level of intelligence in the photovoltaic industry is therefore expected to be significantly improved. The industry is expected to expand its supply chain for silicon materials, silicon wafers, equipment, materials, and devices [44]. Central to the five-year plan is the promotion of intelligent manufacturing of photovoltaic basic materials, solar cells and components, as well as realizing “green development” of the supply chain.
over, due to the huge production capacity, the photovoltaic industry is highly competitive. In the past ten years, the cost of solar photovoltaic power generation has dropped more than 90 percent. Although the decline in cost is mainly due to the reduction of panel and system ancillary costs [45]. companies need innovation to remain profitable. For example, for upstream silicon production, the modified Siemens method can produce high-purity crystalline silicon in a more efficient, stable, and safe way. Companies like Tongwei that use this modified Siemens method can dominate the market. As N-type cells have a higher conversion rate than P-type cells, companies that are capable of mass-producing N-type cells while controlling costs will achieve success.
Furthermore, the risk of changing interest rates will affect the future photovoltaic industry. Considering that the photovoltaic industry requires long-term investment and returns, decision-makers in this industry will be discouraged in regions with relatively high-interest rate risk for financial institutions. As China is still suffering from the Covid-19 pandemic, the central bank interest rates are still at a relatively low level.
Related and Supporting Industries
Although China is far behind industrialized countries in the upstream segments of the photovoltaic industry, China has become the world leader in the production of PV cells and modules. This is due to various clusters in the Chinese market that interchange expertise at an accessible level. China’s photovoltaic industry has formed the world’s most complete industrial chain with independent intellectual property rights and a strong flow of affordable talent. Among the five most important photovoltaic supply chains of polysilicon, silicon wafers, cells, modules, and inverters, 34 Chinese companies rank among the top ten in the world in output [46].
The Role of the Chinese Government
The Chinese government is investing in scientific research and technology to promote Chinese PV industry innovation. Although the Chinese PV sector had initially focused on technological learning from more advanced countries, the government has successively strengthened indigenous innovation, which has resulted in a Rapid rise of academic publications and patents for local PV technology. Despite those improvements, the Chinese PV sector is still far from the goal of attaining innovation leadership.
China is still lagging behind Japan and the USA in terms of patent performance because most of the leading Chinese PV companies invest only a small fraction of their sales in RD. Nevertheless, the first generation of PV is technologically relatively mature and the reluctance of Chinese PV companies to match wester RD spending will not threaten their industrial leadership in the short term if business continues as usual.
As the PV industry has been identified as a strategic emerging industry by China’s State Council (Wang et al. 2014), it has received a lot of encouragement from national and provincial government levels. Important policy-making actors in this context are the Ministry of Industry and Information Technology (MOIIT), which is responsible for industrial policy, and the Ministry of Finance (MOF).
Most photovoltaic products, or solar panels, are being installed in remote areas by giant solar farms that sell the energy to utilities. Satellite imagery shows the incredible growth of these enormous solar farms that continue to pop up all-over China.
China’s drastic increase in solar power stems from the nation’s desperate need for electricity and its severe air pollution crisis. While some nations have curbed incentives to install solar panels, China’s government is aggressively encouraging financial institutions to give incentives for solar installations.
Sustainability-oriented regimes in developed countries influenced transitions in emerging economies, such as China [47]. and today China’s government and cheap labor enable the country to produce and sell panels for far less than anyone else can produce them. Transnational linkages had a strong influence on the development of the Chinese competitive position [48] and the development of China’s domestic market could further strengthen the performance and further increase Chinese global competitiveness.
As a high technology industry, government subsidies are an important motor for China’s PV industry growth trend as the solar industry benefits from tax reductions. China holds a dominant position in the upstream supply chain and currently billions of dollars are supporting the solar industry expansion [49]. These investments help China retain a chokehold on the industry.
INDUSTRY TRENDS
China’s primary energy demand is projected to grow much slower through 2030 than the overall economy. This is mainly the result of efficiency gains and a shift away from heavy industry. A transforming energy sector leads to Rapid improvements in air quality. Solar is expected to become the largest primary energy source by around 2045. Demand for coal is expected to drop by more than 80% by 2060, oil by around 60%, and natural gas by more than 45%. By 2060, almost one-fifth of electricity is used to generate hydrogen.
The level of investment required for China to achieve its goals is well within its financial means. Energy sector investment is expected to climb in absolute terms but will fall as a share of overall economic activity. The total annual investment is predicted to reach USD 640 billion (around CNY 4 trillion) in 2030 – and nearly USD 900 billion (CNY 6 trillion) in 2060, almost a 60% increase relative to recent years. Annual energy investment’s share of GDP, which averaged 2.5% in 2016-2020, drops to just 1.1% by 2060.
Solar Surge – Panel-making capacity has soared in China while languishing in the U.S.
New environmental regulations and the enforcement of the Paris climate goals are becoming more intense, and companies are now increasingly accountable for their downstream supply chain. A controlled CO₂ footprint during the production and the recyclability of materials has become a requirement for suppliers involved in trade with European Union countries [50]. These competitive forces also increasingly apply to other parts of Chinese manufacturing value chains and established Chinese companies need to take action before their current supplier contracts expire. While the Chinese industry landscape has recently been shaken by the November 2021 Personal Information Protection Law and the local market experiences unprecedented levels of volatility and valuation spreads [51]. sustainability is also beginning to shape demand and change many traditional industry structures [52].
The enormous challenges in the market overall create three main sources of uncertainty: 1. How fast will technology provide solutions? 2. Will consumer behaviors and preferences change? 3. How will governments act?
Just like the car disrupted the horse and carriage business and digital streaming disrupted music publishing, firms that don’t “jump” the S-curve may be left behind by those who adopt the new ways of doing things [53] [54]. Chinese companies need to be hedging against alternative futures where what has been envisioned does not pan. In this situation, Chinese players do not only need to try to become “greener” by exploiting win-win effects between sustainability and savings and reap the benefits of Chinese tax benefits for sustainable business practices, but also hedge against disruption by leveraging sustainable entrepreneurship innovation power.
THREATS TO THE CHINESE PV INDUSTRY
Impacted by the US Financial Crisis and the European Debt Crisis, one of the most significant threats to the Chinese PV industry is the overcapacity of PV products such as silicon, polycrystalline silicon, solar cells, and PV modules. Although the industry uses the domestic PV market to absorb the overproduced PV products, still it has the risk of shrinking demand.
Although solar energy has the advantages of being inexhaustible and pollution-free, it has some drawbacks. There are issues such as large fluctuations in power generation which are affected by weather and seasons, unfavorable grid stability, and difficulty in grid connection. Furthermore, there is a mismatch between supply and demand as the solar energy-enriched area (northwest) is far away from the power load area (southeast coast).
The third threat that hinders the further development of the PV industry is the high cost. Although the photoelectric efficiency of photovoltaic equipment can reach a level exceeding 40%, which is nearly twice that of the current mainstream batteries, this technology is not commercially viable. Stacking performance exponentially increases production costs and finding the most cost-effective combination of continuous advancement of technology and scale is the best choice for PV companies.
POTENTIAL FOR ENTREPRENEURSHIP IN THE PV INDUSTRY’S FUTURE
The PV industry developments can be split into four potential scenarios. Those alternative scenarios highlight the ways in which the future may be quite different from the past and may provide a basis for potential new ways of market competition and dynamics. A scenario analysis method shall be applied when thinking about the future by systematically considering the uncertainties and assigning probabilities to each of the defined scenarios.
Potential Scenarios in the PV Industry
– based on Degree of Disruption and Degree of Control
I. “Status Quo”
Business as usual is as it sounds: sustainable productions remain expensive and there is no significant innovation. In this scenario, Chinese companies continue investing in non-renewable sources of energy and keep sustainable investment to the obliged minimum.
II. “PV Development”
Innovation forces incumbents to invest in sustainable practices at the risk of being driven out of business and regulatory action. Investments in renewable innovation will see an increase and has a positive return on investment (ROI) in this future. An especially promising new technology with major potential for disruption in the PV industry is perovskite thin-film solar cells. The new technology could rebalance market power and revive the currently marginalized thin-film technology in a revised format that could reach price parity due to streamlined production and higher efficiencies compared to the established monocrystalline and polycrystalline structures [55]. Sustainable development is the best-case scenario for sustainable entrepreneurship as mature industry firms become at risk of “disruption” when new technologies and new business models emerge to satisfy customer needs more effectively. Firms that don’t “jump” the S-curve may be left behind by those who adopt the new ways of doing things [56]. A need to respond to the problems is created by this future and an increasing number of current PV players along the value chain may be at risk of disruption. This scenario has the consequence of market structure restructuring as successful new ventures capture market share and challenge power dynamics.
III. “Sustainable Boom”
This future describes a world in which sustainable products become the norm. Renewables are a serious threat as they reach price parity through innovative practices and/ or subsidies and capture market share at an exponential speed. In this world, consumers actively punish non-sustainable alternatives and there is a business case for investing in sustainable innovation. Companies need to ask themselves whether there are already scalable solutions that can be adopted and implemented, or whether it is necessary to invest resources in researching and testing new answers to old questions in order to grow with the boom. RD costs need to be budgeted by incumbents and companies need to see the business case in first-mover advantages and take risks to exploit patent opportunities.
IV. “Cash Cow”
Incumbents are able to capitalize on past investments in current PV technology. They save money as little new investments are necessary for the near future and as they can utilize economies of scale and learning to increase their bottom line. This is a grey sky scenario case for small companies and entrepreneurship as there is no product vacuum to capitalize on in the sustainable innovation space. The problem with leaving sustainable change in the hand of big corporations is that few shareholders really live up to the credo “Educate leaders who will make a decent profit, decently.” Good people are rare as life is short and people want to profit as much as possible and push decadence to new levels, outperforming our average ancestors from the Victorian age and living like kings and queens like there is no tomorrow. Most shareholders and managers are driven by greed, just like the Spanish conquistadors when they invaded and exploited Latin America and decency is rare at the top of the big corporations. Large corporations don’t have enough incentives to act alone and unless there must be a guiding hand that forces them to stop environmental exploitation, the incumbents will exclusively follow economic rationale and milk their cash cows through optimizing operations and purchasing power with scale.
The Chinese PV enterprise landscape is subject to a different degree of external influences in each of the four futures. In the sustainable development future, the enterprise landscape is changed the most. As new PV products outperform current cell technology and industry best practices are revised according to millennial generation standards, incumbent players have to also innovate current PV technology and digitize to stay competitive with emerging innovation-driven startups. In this case, many opportunities are created for entrepreneurial disruption and power redistribution within the market. Incumbents’ bargaining power is reduced the most in this potential future.
For Chinese players, it is important to realize that European companies are increasingly replacing products with large CO₂ production footprints in their supply chains and countries such as Australia and Canada currently have large raw material reserves and a greener energy economy than China. Hence, Chinese PV upstream supply chain companies need to take action before their current supplier contracts expire while hedging against startup disruption risks. Industries need to be hedged against alternative futures where what has been envisioned does not pan out in the exact same way as planned and the monocrystalline silicon PV technology-dominated Chinese industry needs to change soon through sustainable entrepreneurial innovation power to prevent the happening of a major foreign driven disruption.
CONCLUSION
China is currently leading the battery revolution and also the people’s republic wants to show the world that it can improve its energy CO₂ footprint and make its manufacturing activities environmentally friendly. In this context, it is important to note that even a single company can be an ambassador and shape the world of tomorrow. One single entity can, for instance, create best practices and sketch roadmaps for tangible improvements. Being an innovator and a trailblazer can incentivize other players to move in this direction. These trailblazing actions will lead to the result that “lazier” incumbent companies face fewer regulatory roadblocks on the path to creating their own business case for sustainability in their supply chain. Also, setting the standard can impact the vertical supply chain partners as well and set a trend for triple bottom line adherence. It will not be easy for a single company to create meaningful change, but regulations and reporting need to be in place to support and reward those companies who are willing to change for the better. One should not forget that there are a lot of risks associated with the movement to new technology and routines away from the “never change a winning team” paradigm. There is a lot of resistance and also RD costs are a significant hurdle to overcome.
Until now the most significant contributions of China to the global fight against climate change seem to be the reduction of technology cost due to economies of scale in manufacturing and the Rapid development of the domestic market for PV.
Despite China’s support of local renewable companies with large subsidies [57]. it needs to be considered that for instance countries such as Australia and Canada can match the middle kingdom’s large raw material reserves, while offering “greener” energy economies.
That said, it is positive that the local Chinese innovative culture has created a fertile ground for sustainable entrepreneurial activity. Market formation, resource mobilization and creation of legitimacy have reached a virtuous cycle and create synergetic benefits in the Chinese home market environment and as China is on a trajectory from production to innovation within the photovoltaics sector [58]. the future PV industry indeed leaves room for leading entrepreneurship.
MSc. Niklas Kimo Bruns: Chinese Alpha Senior Equity Analyst – LinkedIn
BSc. Tong Zhou: Guest Author
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