It is no secret that the solar manufacturing industry is facing a downturn with an oversupply of capacity nearly double what the world can install in a given year. Yet this has become a good time for solar manufacturers to expand into new markets.
“Building something outside of China became more viable economically,” says Helena Li, president at Trinasolar, adding that logistical costs have become a bigger share of the whole cost of solar products. Predicting logistical costs is “very difficult to predict nowadays” due to possible disruptions and challenges.
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Li explains that the US’s way of onshoring domestic solar manufacturing through the Inflation Reduction Act is a good example for any market to build a domestic manufacturing footprint.
“This is a good way to incentivise your manufacturing industry, if you’re serious about it. You need to spend five to ten years to build up the whole manufacturing capability. The government has to play a role to change the current situation,” explains Li.
More financing in the solar industry than ever before
A region that has been getting a lot of attention lately has been the Middle East, with many solar PV manufacturing announcements in countries such as Saudi Arabia, Oman or the United Arab Emirates. “We’re getting into the final stages of studying the Middle East,” says Li, regarding the construction of a manufacturing facility in the region and the costs associated with it. “The Middle East is definitely [one of the regions] where we are going to invest.”
Instead of starting with a module assembly plant in the region, Li states that Trinasolar plans to initiate operations with a wafer facility.
Li humorously remarks that despite the ongoing downturn of the solar manufacturing industry, she has seen more investment in solar manufacturing in the past two years. “This is a time we have to try to do all this preparation. We have no issue at all to get financing [from banks] in the US, same as in Southeast Asia.”
When talking about what attracts Trinasolar into building a domestic manufacturing plant in a given country or market, Li says: “It’s not just building a factory, it’s a strategic investment for the country to look at their green energy. We like to work in those markets where people have a vision of where they want to be.”
The company’s investments in manufacturing in the past two years have been focused on localising its footprint outside of China. “This clearly indicates that in the future, the industry will experience a more diversified supply chain, with our operations expanding across various locations globally.”
Localised manufacturing, localised products
One of the advantages of having a domestic manufacturing plant in a country or market is also the possibility of making products directed to that market, and diversifying the array of products a company can offer.
“This year, we have more applications and innovations in which we can look at different markets and their needs. We can diversify our supply chain in the locations [we’re present in],” says Li.
While explaining the advantages of building a more localised manufacturing plant that can expand the company’s offerings in terms of modules, Li also explained how the company was also looking into other segments of the solar industry, such as offshore solar or agrivoltaics. Combining the use of agricultural land and solar PV could allow for more capacity to be added, such is the case in Central Europe, with a recent report from think tank Ember highlighting a potential of 180GW agriPV deployment in just four countries.
When talking about outlier markets, Li mentions Pakistan, which has seen an uptick in solar PV installations, mainly from distributed generation. “The good part of Pakistan is that it is distributed, and it doesn’t impact the grid’s voltage and transmission a lot.”
The importance of these emerging markets relies heavily on looking at the policymakers, adds Li, while also taking into consideration the country’s need for energy. “Latin America, Middle East, Africa and ASEAN countries have great potential [for solar PV].”
Obviously, not all these regions will need the same products, explains Li. In Africa’s case, solar PV paired with energy storage will be necessary due to a lack of grid transmission capacity. This comes down to Trinasolar’s ability to offer an array of solutions that go beyond solar panels and being able to also pair it with its own trackers and energy storage solutions.
Li says that given that each market has different needs, localising the products to these markets should be done as much as possible. “We want to make sure we can have some local sourcing to support the local community.”
Diversification through energy storage
Companies that work on building data centres or using artificial intelligence (AI) are attracting increasing attention from the renewables industry. Li explains how in Malaysia – an important market for data centres and AI in Southeast Asia – Trinasolar is working with that industry to ensure better sustainability due to the high need for water to cool down the data centres and constant energy to run these facilities 24/7.
“Initially, we had storage systems, trackers, and other components, but we didn’t see the synergies between them. Now, however, it’s becoming increasingly clear how these elements can work together more effectively,” says Li, adding that the discussion with customers now begins at an earlier stage to better fulfil their needs and not just look at a single product – be it solar panels or energy storage – but an array of solutions that can be combined.
It is not just certain industries that will require solar-plus-storage capacity to power their facilities but also markets like Indonesia, which is looking at cross-border sales of electricity with Singapore. Projects in Indonesia will need to pair their energy storage with solar PV capacity in order to sell that electricity to other markets, explains Li. “What Singapore wants is a 24/7 supply of green electricity, not just three hours of it,” adds Li.
This in itself also gives more leeway to Trinasolar to better navigate the current downturn for solar manufacturers, with low prices due to oversupply of capacity and more fierce competition. As the solar division might get more restrained, the energy storage division continues to grow, with 1GWh of batteries delivered in the UK already and the installation of its first project in Italy. Li adds that the company expects to ship 5GWh of battery storage in 2024.
Despite being a more recent player in the storage market – compared to solar PV –, the brand recognition from Trinasolar’s solar products and selling energy storage to customers that have already bought Trinasolar’s products makes it easier as it is a question of “trust”, explains Li. When speaking to her clients, Li says that: “One good thing about solar prices going down, is that customers are able to add storage.”
“Overall, we’re different from some of the other module suppliers, who have their own strengths. But we’re trying to make ourselves more resilient, no matter what happens. Be it from geopolitical risks, supply chain, visibility or transparency.”
Technological improvements in solar panels
“Europe is about compliance, ESG, low carbon or traceability. We’re improving ourselves to be more sophisticated to get more green certificates. In China, we have received our first green factory certificate. Last year, we generated over 130MWh of renewable energy by ourselves to power our own factory.”
Aspects such as reducing carbon emissions from manufacturing plants are also an important aspect for Trinasolar and the industry in general, especially in markets like Europe that have put an emphasis on ESG. Li says that water and electricity usage continues to be cut, year after year, at its manufacturing plants.
Despite the downturn, continuing to invest in research and development (R&D) remains essential for Trinasolar, says Li, citing the latest products the company has been working on, such as hail, low-weight, or recycled solar panels. “Now we have time to really look at how to do our job better.”
“It’s not just about being optimistic; we are fully committed. As an industry leader, we must find a way to continuously drive innovation and lead by example, ensuring that we stay ahead in a rapidly evolving market.” concludes Li.
