Intersolar 2023: The rise of a new force in PV industry, Qn-SOLAR from EPC to PV manufacturer

“At the end of the day, we transitioned from EPC to solar manufacturing and have deeply penetrated the solar industry chain,” said Cai Zhifang, chairman at Qn-SOLAR, in an interview with PV Tech.

Despite having ambitious production plans, Cai Zhifang emphasised that not all the capacity will necessarily be fully utilised. Maintaining an average production rate of 60-70% per year would be sufficient. Anything beyond that would cater to peak periods. Many companies consider a 70% production rate as normal. In the PV industry, especially in module production, having a 1GW capacity with the ability to produce 700MW is adequate. However, when facing large orders, they may aim for maximum capacity utilisation to fulfil the demands for a quarter, which is an accumulated experience over the years.

When asked about the company’s advanced technology deployment for cells and modules, Zhifang responded confidently, stating a strong belief in tunnel oxide passivated contact (TOPCon) technology.

Zhifang expressed his personal opinion that TOPCon technology will be mainstream in the next three years, explaining that Qn-SOLAR’s overall planning for the next 3-4 years, where the focus will primarily be on TOPCon. “While we have already started small-scale production of HJT (heterojunction) products, the cost is not yet satisfactory. We have excellent small-scale HJT production in our laboratory, but the cost is too high. Additionally, the price trends in the second half of this year are not favourable for HJT technology.”

If a good technology is too costly, people will only play clapping onlookers, which means the outcome will not be very satisfying. The outcome not only depends on the HJT technology manufacturer but also on the cost control of other supporting raw materials and the entire ecological chain.

Regarding the company’s annual development goals, Cai Zhifang pointed out: “Our target for 2023 is to achieve 9GW of module sales. In fact, we have already secured 8GW of orders in China. We have established a mature and successful business in China, which serves as a foundation to support our overseas expansion. This year will also be a year in which Qn-SOLAR makes every effort to expand into the overseas market.”

Currently, Qn-SOLAR has initiated its IPO plan, which the company has been preparing for a long time.

A big leap from EPC to PV manufacturing

PV Tech: What is the current business development of Qn-SOLAR in the industry? Could you provide some background information about the company and its main solar products?

Cai Zhifang: Qn-SOLAR initially started as an EPC business during its entrepreneurial period in 2014. Our main partners were domestic power companies in China. We continued this business until 2020 when we had significant demand for end-use projects. We then realised the need to establish our own manufacturing base. So, in early 2021, we began establishing our first production base to manufacture cells and modules.

In the first half of this year, we set up 7 manufacturing bases. Currently, our annual cell production capacity in China has reached 69GW, and we also have an annual module production capacity of 39GW. We plan to continue expanding our production next year, and according to our plans, we expect to reach 83GW of cells and 39GW of modules by the end of next year. We have transitioned from being an EPC player to a global manufacturer, deeply immersed in the entire solar industry. In terms of products, we operate with full-scale dimensions, sufficient capacity, and advanced technology.

As you mentioned, the company is relatively new in terms of manufacturing, but what unique advantages does it possess?

One of our standout advantages is our extensive research and expertise in the field of manufacturing technology. Our main focus at our facility is on n-type TOPCon, which was proven to be the most scalable, cost-effective, and efficient technology currently available. We are well aware of the potential of n-type HJT technology, but currently, TOPCon is the most widely recognized and accepted option. According to our roadmap, we anticipate that TOPCon technology will exceed 28% efficiency within the next 3-4 years, offering significant growth opportunities for us in this area. We also possess some capacity with p-type PERC technology. We will switch from this year’s 60% p-type and 40% n-type model to 80-90% n-type model and expand it worldwide.

We have three advantages which distinguish us from our competitors. The first is scaled production, enabling us to produce full-scale module products with controlled costs; the second is our ability to make cells since we have our own R&D team to consistently improve cell technology.

Lastly, our team boasts a wealth of experience and expertise in the industry. While our company may be relatively new, our management team and investors have each accumulated over 15 years of experience in this field. Personally, I bring 17 years of experience to the table. This collective knowledge, combined with our mature and skilled workforce, allows us to excel in areas such as technology, quality control, cost management, and overall operations.

We previously focused on EPC and have a deep understanding of the market’s demand for specific products. Now, transitioning from the client side to the supplier side, we have greater insights into the needs of the clients. Therefore, we have a strong grasp of quality control and other related services. As part of our advantage, we provide free technical support in the EPC aspect when our customers purchase our modules. We also offer recommendations for various solutions.

What are the main products Qn-SOLAR showcased at this year’s Intersolar Exhibition? What are their features?

For this exhibition, we have brought full-sized, fully functional module products. In some European countries and regions such as the Netherlands and the Nordics, there is a high demand for full-black modules. While full-black modules are already well-known, supply and cost have been a challenge for some companies. However, our company excels in capacity and cost control. Additionally, we have established a local team, enabling us to promptly meet the European market demand for full-black modules. In the second half of the year, we will supply a large quantity of full-black modules, which is a distinct feature for us. Furthermore, we are working on incorporating n-type TOPCon technology into our full-black modules, which has become a new and significant demand.

“TOPCon technology will be the mainstream for the next three years”

Considering different market demands, what do you believe is the main trend for PV module technology this year? Which technological routes and product solutions do you favour? And what are the plans for the company?

We believe that the main trend for advanced technology this year includes two aspects: TOPCon technology and HJT technology. Overall, I estimate that about 90% of the market is focused on TOPCon, with 5-10% attributed to HJT. HJT technology is promising, with slightly more advanced roadmaps. However, controlling costs and managing the one-time investment in equipment is crucial. The combined investment and operating costs for market penetration and global promotion should not be underestimated, as customers ultimately look at the return on investment and profitability of their solar power plants.

Personally, I believe that TOPCon technology will be the mainstream for the next three years. As for Qn-SOLAR’s plan for the next 3-4 years, our main focus will still be on TOPCon. We have already started producing HJT technology on a small scale, and the technology shows promise. However, the cost is not yet satisfactory. Our small-scale HJT technology in the laboratory is excellent, but it is expensive to scale up. Additionally, the price trend in the second half of this year does not favour HJT technology. Our end customers have certain requirements for our supply chain, and they view the effective cost-to-performance ratio as the top priority.

If a good technology is too costly, people will only play clapping onlookers, which means the outcome will not be very satisfying. This not only applies to manufacturers of HJT technology, but also to other supporting materials in the entire supply chain, which all need cost control. The reason why TOPCon technology can be mass-produced now is because it not only reduces costs for module manufacturing, but also reduces costs for raw materials. It is very similar to the original p-type PERC technology with mature integration that leads to low cost. Next year, the cost of TOPCon technology and PERC technology will be very close, which is a great advantage for the end users.

Our research team are also tapping into perovskite, the success of which actually depends on its technology and whether the basic raw materials are stable. If the basic raw materials are not stable, mass production will also be a big problem. On the contrary, monocrystalline silicon is already a relatively mature product, and the manufacturing processes in all aspects are very stable.

Most of us with more than ten years of experience in this field have worked in factories before. I also worked in a factory, but I later moved to the international market. I have abundant experience and understanding of factories, that’s why we understand our suppliers when we are at the sales end. We are gradually integrating and making perfect conclusions to serve customers based on a good understanding of this market.

Annual shipment target of 9GW and four overseas markets

You mentioned earlier that you are also focusing on the international market. How does the company position itself in the international market? Which specific countries are you more concerned about? And what are your market strategies? Have you achieved any results or breakthroughs?

We really started to focus on the international market in Q4 last year. We first prioritised two regions: Europe and South America. Europe is a well-established PV market, and once we succeed there, our brand value will be enhanced quickly.

The second region is South America, which not every company can enter. The Brazilian market is not doing well this year, but we have not only entered Brazil, but also entered the Latin American region, including Mexico, Colombia, etc. We are gradually penetrating these places, which are mainly entered by leading companies and not many small and medium-sized enterprises. The Brazilian market is a special case where small and medium-sized enterprises have entered. They can accept any product, this resulted in a high inventory for the first half of the year. Many Brazilian distributors attach great importance to favourable prices, yet significant quality issues have occurred with low-priced products. Therefore, the Brazilian market is not doing well this year. There is also a political factor: the policy supporting the Brazilian PV market was supposed to be abandoned in January this year, so many investors hesitated. As a matter of fact, the policy was not impacted when the new president took office. New laws came out and continued to support the PV industry. However, it was already the second quarter and the momentum was delayed. Half a year’s time was wasted.

Apart from South America and Europe, we will expand into two other markets in the second half of the year. One is the Middle East, which mainly consists of large-scale projects rather than retail. We are currently cooperating on a 2.5GW project in the Middle East, which will start from scratch and will be completed by 2025. It is crucial for us to enter the Middle East market because it is either non-existent or significant. That’s a prominent feature.

Then is the Asia-Pacific region, where we will focus on Southeast Asia, Australia, India, and Japan. Especially Japan and India. We will start entering these two markets in the second half of the year. They are quite challenging for us, especially in terms of branding. We are still studying the methods to enter the Indian market where there will be high taxes and equipment configuration risks. As for the Japanese market, we are still observing. But we will definitely take our moves if necessary. Therefore, our company has established independent operations in each major region worldwide, and we are progressing rapidly.

How do you view the overall solar market for this year, and what are the company’s development goals for 2023?

Our goal for 2023 is to achieve 9GW of module sales. In fact, we have already signed 8GW of orders in China. We have established a mature and excellent business in China, which supports our overseas development. Currently, our overseas development is investment-driven, and the overall condition is healthy.

In addition to module sales, our development goals also include EPC project sponsorship. We are currently planning to go public and become a listed company either at the beginning of next year or the end of this year. This industry requires the support and endorsement of the capital market, and we have been preparing for this for a year and a half.

Our team has experience in risk management. Our cash flow has been maintained at a certain level, so our inventory remains at a reasonable level. I believe that having a large production capacity does not necessarily mean running at full capacity. Maintaining an average of 60-70% capacity utilisation per year is sufficient, and the rest will be reserved for peak periods. Many companies claim that a 70% production rate is normal. For example, if a PV company has a 1GW production capacity, producing 700MW is enough. However, sometimes when large orders come in, the production will maybe meet the peak demand for a quarter. This is the experience we have accumulated over the years. In terms of module investment, we slightly increase the production capacity and leave some room for peak periods.

The third and fourth quarters are usually peak periods, and Europe will soon have its peak coming. Overall, the demand for solar energy in Europe this year is quite healthy, estimated to be around 70-80GW. We have sufficient supply capacity to support it. Furthermore, European policies regarding solar energy are relatively stable, without significant changes. The first half of the year was challenging for the Brazilian region due to policy changes, causing panic and hesitation among people. However, starting from the third quarter, the Brazilian market will begin to recover, and the South American market is slowly emerging. Therefore, the global installed capacity this year is expected to be around 400-450GW. Among them, the middle channel accounts for about 10%, which is approximately 40-50GW, approaching a total demand of about 400GW.

China ranks first with approximately 130-140GW, followed by Europe with 70-80GW, and the US market with 28GW. Due to supply chain, political, and trade barriers, the US market is limited to a maximum of 20GW. Other regions such as the Middle East may exceed 10GW, and the Indian market will maintain a scale of around 14-15GW. Additionally, in North Africa, there may be 3-4GW of installations this year.

The European market has a high threshold. Why do we want to enter anyway? It is a great challenge for the team or a way to train the team. If we can succeed, it will be very important for future growth of our overseas sales team. Moreover, currently, we are involved in the entire industrial chain as a module manufacturer.

As for the next step, in the second half of this year, we have already started working on energy storage projects in China, only primarily supporting the five major and four minor projects in China. Next year, we will enter the international market.

Additionally, in the second half of next year, we may partner with a well-known research institution to work on hydrogen energy, which is a significant investment plan dependent on our progress as a publicly listed company. Hydrogen energy is a long-term plan and involves not only our main line but also the receiving end. It is crucial to choose the appropriate large-scale enterprise as our partner.