Hyundai targets US and Japan for growth in solar energy market

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Only around 18 months ago media reports were claiming that Hyundai Heavy Industries’ (HHI) foray into the solar PV market was over. But despite the highly competitive market place that has generated an extended period of consolidation, bankruptcies and market exits, HHI is focused on growing its market presence.

Talking exclusively to PV Tech during Intersolar Europe, Sung-Rak Kim, senior vice president and COO of Hyundai Heavy Industries, Green Energy Division detailed how the company was implementing its green energy business plan in which PV would be at its core.

A key aspect to focus on is that HHI is interested in green energy and leveraging its array of technologies and manufacturing capabilities to provide complete energy solutions for residential, commercial and large-scale markets.

Importantly, said Kim, HHI is focusing on certain strengths it believes it enjoys despite the obvious challenge the majority of PV manufacturers have in competing with China-based rivals.

Emphasis is being placed on growing its presence in the US and Japanese markets after building a strong backbone for longer-term success in these markets.

US market

HHI completed UL certification for its PV modules in 2009, and has since gone on to supply high efficiency modules to utility-scale projects and commercial and residential markets in the US.

Kim said HHI’s biggest project to date in the US has been the supply of modules for the AVSEII (Arlington Valley Solar Energy II) 142MW DC project which is located on approximately 1,160 acres in Arlington Valley, Arizona.

Currently under construction the PV power plant is expected to start full commercial operation by the end of 2013.

For commercial projects, HHI has teamed with oil giant, Chevron, where both parties are co-marketing HHI modules for public buildings. As the module supplier for these projects, HHI also makes donations to non-profit project owners such as schools, County and Government District bodies under its Community Outreach Program.

Not surprisingly, bankability issues for HHI are not an issue, helping the company to compete effectively in such downstream markets.

With the US market having topped 10GW of cumulative installations, according to the recent analysis from NPD Solarbuzz, the forecast of installations growing to 17GW by the end of 2014, supports Hyundia’s strategy to build its business in the US.

Japan market

Kim was quick to explain that Hyundai’s other focus on the booming Japanese market had been long in the making and predated the beginning of an attractive FIT in 2012, which has since catapulted Japan to compete with China this year for the largest PV market position.

It was back in 2009 that HHI said it had launched its modules into the Japanese market and received JET certification in 2010 for entry into the commercial market, followed by J-PEC registration required for supplying the residential markets in Japan.

The company now claims to have built a customer base across the downstream business in Japan, which is supporting its growth efforts in the country.

Among its customers is the Eurus Energy Group, one of the top renewable energy players in Japan. HHI recently contracted to supply 47,000 modules for a 4.8MW project within a multi-purpose, multi-functional business park in Misaki, Japan.

The company said that electricity generated from the plant would be sold to Kansai Electric Power and provide electricity to 3,900 households, or about a half of Misaki town’s population. The project is said to be completed in August, 2013.

European market

The company acknowledged the impact Chinese low-cost modules had on its business in Europe. Kim noted that nearly 60% of module shipments had previously been to Europe but this had declined to around 20% in the last few years.

The EU anti-dumping duties against China have provided the likes of HHI with an opportunity to supply more modules into the EU market to fill the void left by Chinese producers as they seek to go after China’s domestic market and that of Japan.

When asked what capacity the company had and how much capacity could be allocated to Europe the executive declined to give details.

However, he noted that it could potentially increase shipments to Europe from 20% to somewhere between 30-40%, should the European market require HHI’s modules.

However, like many companies seeing strong demand for bankable and branded modules in Japan, the European market is struggling to attract its share of higher-end module supply. 

Kim reiterated several times in the interview that Hyundai was by nature a conservative company and did not believe that it was not in a position, nor wanted to be seen to be in a position, to take a short-term advantage of the opportunities in EU due to the anti-dumping issue.

“Even though at this time anti-dumping is a big issue, we do not want make an issue of this,” noted Kim.

A ‘wait and see’ approach was more in line with company’s culture on this subject, Kim added.

That said it is obvious that Hyundai’s brand and high efficiencies are well suited to the European residential market, and a prolonged impact from anti-dumping duties on Chinese producers would strengthen Hyundai’s potential position within the region.

R&D activities

HHI reached a milestone last year when its Solar R&D Center in Eumseong, Korea, home to its 600MW of cell and module manufacturing operations, was completed at a cost of US$20.8 million.

Although Kim was hesitant to provide annual spending figures for R&D, the investment in the facility alone would have put Hyundai into the top 10 spenders on R&D in 2012.

The executive noted that the company had had a strong focus on R&D since entering the market but had markedly intensified this since the establishment of the dedicated facility.

As a result, HHI said that it had been successful in achieving a lab efficiency of 20.5% with its large-area, copper-plated p-type PERL cell last year, which was presented at EU PVSEC.

In tandem, HHI also started the development of the mass-production version of its PERL cell, which uses screen-printed contacts retaining compatibility with conventional module assembly processes. A champion cell conversion efficiency of 20.2% was said to have been achieved.

The screen-printed PERL cell was said to incorporate selective-emitter, rear-passivation, and fine-line-metallisation technologies, producing an average efficiency of over 20% in pilot line production.

This converts to a 280W, 60-cell module but Hyundai said that this could be increased to 290W when employing further enhancements to reduce optical losses.

HHI is bullish on its next-generation cell and module technology, which the company said would be launched in 2014, after necessary production tool upgrades are completed.

“We are excited that we will be able to provide to our customers high-power and high-reliability modules that also cost less per watt to produce,” noted Kim. “We will launch the product early next year in Europe and target the residential and commercial markets through our [distribution] partners such as MHH in Germany and Segen in the UK.”

However, the new R&D centre and engineering departments has been responsible for several important milestones related to further improving the front-side passivation process and lowering the rear-capping costs.

“We are confident that, by the time we start the mass production of our PERL cell next year, we’ll see even higher module output powers and lower production costs,” added Kim.

Hyundai is therefore focusing on its ability to compete in markets requiring a focus on high-quality and high-performance products while leveraging its bankability and product warranty security to provide long-term assurance to customers.

Next year will be critical to its next-generation product roll-out intended to capture and propel its business within its key served markets. 

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