Profitability to dog Trina Solar in 2013

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Losses were the theme at tier 1 solar module manufacturer, Trina Solar in 2012 and will prove a similar story this year after the company released fourth quarter and full-year financial results.

ASP (average selling price) declines of modules negated shipment increases and operating expense cuts to produce quarterly and full-year net losses of US$87.2 million and US$266.6 million respectively.

As a result, Trina Solar reported 2012 net revenue US$1.30 billion, a decrease of 36.7% from US$2.05 billion in 2011. Total shipments were 1.59GW, an increase of only 5.4% from 1.51GW in 2011.

Fourth quarter results

Trina Solar reported net revenues in the fourth quarter of US$302.7 million, an increase of 1.6% sequentially and a decrease of 30.5% year-over-year. Gross margin was 1.9% in the fourth quarter of 2012, compared to previous guidance of low single digit margins. 

Total shipments were 414.5MW, up from 380.3 MW in the third quarter of 2012 and 424.9 MW in the fourth quarter of 2011. As expected, the increase was due to demand within China as utility-scale project activity increased on renewed plans to boost installations above previous government targets.

“While realizing sequential improvements in shipments in the fourth quarter, our bottom line continued to be adversely impacted by a supply-demand imbalance and aggressive pricing by some competitors,” said Mr. Jifan Gao, Chairman and CEO of Trina Solar. “Amidst these commercial conditions, our focus on profitable sales, inventory management, and on-going expense reductions allowed us to achieve positive operating cashflows. During the fourth quarter we also made progress in the global development of our in-house system business, and expect to commence grid-scale opportunities in China and the Americas later this year.”

However, shipments were more affected by weakness in its traditionally strong markets of Europe and its late entry into the downstream project sector, compared to key rivals such as Yingli Green.

PV project business update


Dubbed it’s ‘Systems Business’ unit, which includes its nascent project development arm, Trina Solar has an evolving model. The classic project development work side is currently focused on a few large utility-scale projects planned in China, while some of its other projects meld the company’s traditional module sales functions into a ‘strategic’ partner with conventional project developers and EPC firms.

Management reiterated in a conference call to discuss full-year results that it had obtained approval from the Gansu Provincial Development and Reform Commission to develop a 50MW grid-connected power plant project in Wuwei, Gansu.

However, management also noted that projects planned in Gansu topped 600MW over the next four years as well as a further 200MW of planned projects in China that the company has yet to officially announce.

Management noted in the call that the growth of its project business in China went in tandem with the expectation that new PV installations in the country would result in a least 10GW of new capacity being added in 2013, which Trina Solar would have a growing market share.

In the US, management said that it had already secured 100MW of projects under PPA’s and was developing smaller pipelines in the UK and Italy in 2013.

Trina Solar has been eager in recent months to highlight module supply deals for various projects in Germany and South Africa for leading project developers such as Gestamp Solar, all in 2013.

On a module shipment bases, China would be expected to account for around 25% of 2013 shipments. The company guided PV module shipments and system deliveries between 2.0GW and 2.1GW this year, suggesting around 500MW allocated to China.

However, as with many of its Chinese rivals, project delays in 2012 can have a direct impact on shipments and revenue recognition, especially in a market that is attempting to add significant gigawatts of PV in a given year. The shipment growth guidance would represent an increase of 25.5% to 31.8%, respectively, from 2012.

Production update


The increase in module shipments supported fourth quarter utilization rates of 70%, according to management. Inline with expected shipment growth and slightly weighted second-half shipment guidance, utilization rates are expected to reach near 100% by year-end.

The company said that it did not expect to increase capacity in 2013 from 2012 levels.
Annualized in-house ingot and wafer production capacity at the end of 2012 was said to be approximately 1.2GW and its PV cell and module production capacity was approximately 2.4 GW.

Management were vague on production cost per watt reduction goals achieved in 2012, though polysilicon costs would have played a significant part in any reductions.

The company noted non-silicon costs in the fourth quarter were around US$0.51/W with the goal of reducing those by more than 10% in 2013. Trina Solar had previously announced a target of US$0.50 per watt by the end of 2012. The company said that it was using around 5.4 grams of polysilicon per watt by the end of 2012.

Yet management acknowledged that they had seen polysilicon prices flatten and had increased slightly since December 2012. Cost reductions in 2013 were said to come mainly from reduced material consumption and less wafer breakage and improved yields. Higher utilization rates, notably in the second-half of the year would also contribute to cost reduction targets.

Going in hand with the evolving project business, management acknowledged that it’s recently announced frameless PDG5 modules were not designed is optimized for reliable performance unto ultimately reduce costs but were designed to be used in projects that experienced harsh environmental conditions.

Profitability factors

Management were also hesitant on improving margins sufficiently to support a return to profitability in 2013. Some regions were expected to see further ASP declines due to the competitive position, while others were expected to see ASP stability or even an ASP increase due to potential new tariff’s due to trade wars.

Overcapacity remained a concern, despite companies shutting down production in the short-term or others shutting down completely, issues remained about exactly how much capacity has been switched off permanently.

Analyst again noted in the call that despite Trina Solar’s efforts to reduce operating expenses in 2012, quarterly run rates of over US$50 million had been impacted each quarter by inventory write downs or other one off items. Management responded by highlighting that one-off items were reducing q-on-q and that trend was expected to continue in 2013, guiding OpEx to be in the range of US$200 million and US$250 million in 2013.

However, management noted that it could see some quarters achieving an operating profit it was not likely for the full-year 2013.



Trina Solar guided first quarter 2013 shipment volumes for PV modules to be between 420MW and 430MW, with overall gross margins in low single digit percentage range.

20 October 2021
Utility-scale solar is evolving, shaped by higher power modules and demand for increasingly lower levelised cost of electricity (LCOE). Those trends are also changing project requirements elsewhere, with inverters capable of delivering high power density and power capacity in strong demand. In this webinar, FIMER will detail how its innovative high-power, multi-MPPT string inverter and modular conversion solution can both meet those demands and transform the utility-scale solar sector for the better.
20 October 2021
The race is on but we need to sprint… With global climate talks fast approaching and time running out to prevent the most disastrous impacts of climate change, now is the time to act. The Summit will explore the opportunities that emerge from taking action on climate change and provide a clear pathway forward for governments, citizens and companies. Taking place just 10 days before the G20 meeting in Rome, on 30-31 of October, and in the lead up to the critical COP26 meeting in Glasgow from 31 October–12 November, this event will be instrumental in influencing ambitious global action.
10 November 2021
The solar tracker market continues to mature at breakneck speed, with designs and component selections becoming ever-more complex in the pursuit of better project economics. But a more simplistic design could deliver a triple benefit of lower Capex, EPC and Opex costs. This webinar will set out the ideal single axis tracker design for utility-scale solar farms. The design leapfrogs from decades of experience, with a comprehensive understanding and attention to the three cost structures of Capex, EPC and Opx. Sun and Steel Solar has prototyped a single axis tracker designed to deliver up to US$0.03/W in real savings compared to existing single axis trackers on the market. That’s US$30 million for every gigawatt deployed.
15 November 2021
The 10th edition of the famous Metallization and Interconnection Workshop, MIW2021, will take place in the Thor Central venue in Genk, Belgium, on Monday, November 15, and Tuesday, November 16, 2021 as a face-to-face meeting. We are longing for direct exchange of knowledge and ideas after a long time. Hopefully you can be part of it! But of course, the organizors will keep an eye on the evolution of the Covid pandemic. It will be assess carefully, whether the workshop can be held without major risks or excessive restrictions. We are looking forward to exciting talks, discussions and meetings and to welcoming you in Genk!
23 November 2021
The solar, storage and EV industries in the UK are going from strength to strength. There is no better place for the community to meet, share ideas and do business than Solar & Storage Live from 23-25 November at the NEC.There’s something for everyone; more than 150 exhibitors, a high-level conference, a start up and innovation zone, a poster zone, strategic partners to network with and much more. 
1 December 2021
Understand fully the technical and logistical supply chains that determine the production and performance of solar modules, including all related factors impacting quality, reliability & bankability. This event will be run online with streamed content, access to session recordings and chat/messaging tools for delegates to connect.

Read Next

October 19, 2021
Funds managed by private equity firm Antin Infrastructure Partners have secured a deal to acquire a majority stake in US solar and storage developer Origis Energy.
October 19, 2021
Lightsource bp has announced its entry into Poland’s solar market through a co-development deal which will see the developer proceed with a 757MWp pipeline in the country.
October 19, 2021
Shortlisted bids in Saudi Arabia’s latest solar tender have jumped significantly on the lowest price recorded in the country’s previous renewables programme, reflecting the hikes in PV equipment costs in recent months.
October 19, 2021
The White House has said renewables are still key to its budget reconciliation bill despite rumours of the investment tax credit (ITC) being modified as opposition to the bill by senators Manchin and Sinema continue
October 19, 2021
Europe's energy crisis can be a boon for renewables deployment on the continent by bolstering business cases, but familiar foes such as grid constraints will still need to be hurdled in the coming years.
October 19, 2021
Solar tracker manufacturer Soltec has signed a framework agreement with renewables developer Acciona Energia to supply trackers over a three-year period.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
November 10, 2021
8am (PST) | 5pm (CET)
Solar Media Events
December 1, 2021