Q&A: JA Solar’s Henning Schulze talks European strategy, vertical integration and solar module procurement

Ahead of a webinar co-hosted by both PV Tech and JA Solar which explores how the ‘Solar Module Super League’ (SMSL) manufacturer is catering for European solar demand, PV Tech spoke to Henning Schulze, corporate assistant president at JA Solar, about the company’s strategy for Europe, how its vertical integration is giving it much needed control over its supply chain, and taking inspiration from the stock market.

The webinar, co-hosted by PV Tech and JA Solar entitled ‘How JA Solar’s premium modules benefit Europe’s residential, commercial and utility PV segments’, takes place at 10:00 CEST on 26 August 2021. To register, click here.

PV Tech: Europe’s set for quite a significant period of growth over the next few years and is being teed up as a significant multi-gigawatt market, just how much of a focus has JA Solar placed on Europe for the coming years?

Henning Schulze: It’s a huge focus, there’s no doubt about this. What we are seeing currently is that the drivers of demand are changing from subsidies or feed-in tariffs or whatever you had in the past to more organic demand, such as merchant trading of the electricity or PPAs. And seeing also with the EU decarbonisation targets, we consider Europe to be a major and very important market in the future.

One of the things that I think a lot of people find interesting about Europe as a whole is that while it is a continental market, it’s made up of many different and often quite unique jurisdictions. How is JA catering for all of those different demands?

We set very early the strategy to be in each and every market, not just focus on the big ones. Just as one example, Switzerland was still small but we were there very early and we are now by far the biggest supplier to Switzerland. It was similar in Sweden. And then obviously, as you say, Europe is very diverse, because it’s made up of so many countries and this diversity also can be seen in the product demand. We have a broad product range and we are convinced that this product range always contains the best solution for different types of application.

In addition to that we have a very, very diversified sales team. We’ve got people sitting here in China, sitting in Europe, in various places, people speaking all kinds of languages. In our case it’s been important to also have a very strong team for order execution and operations. We ship dozens of containers to Europe every day and with European customers, we sign a few thousand contracts per year. Each contract has to be executed well and we put a very strong focus on operational excellence when it comes to order execution.

You mentioned the need for different products tailored for different markets, one of the real drivers of European growth, especially over the more immediate future, is expected to be utility scale solar. Could you perhaps give a bit more detail around what JA is doing to cater for that particular segment?

One key factor for utility scale is LCOE, so for us this means to offer modules which lead to very competitive LCOEs. The main factors here are product design, product efficiency, the right technology and product reliability including very strict quality control.

On top of that, we need to look at production capacity. In some regions of the world we are talking now about gigawatt-scale projects, you have got to be able to serve these as a manufacturer. This means as a manufacturer you ought to have the needed production capacity. And this means vertical production capacity, so from the ingot to the module. Otherwise there is always a high risk of some disruption in the supply chain which can endanger the success of a whole project. Additionally, a high level of vertical integration as JA’s is needed for top quality control.

Do you feel that vertical integration that you speak of gives you a bit more control over your output considering you’re less exposed to procuring wafers or cells from third parties, does that give you more of an advantage over others in the market?

Yes, sure. It does make it easier to control the supply chain. And it, of course, also has the advantage for customers. Customers know not only where the modules come from, but also other products like cells, wafers, ingots. The whole supply chain is much more transparent to our customers.

When it comes to supply chain constraints which we’ve seen over the last eight to nine months, what would be key advice to an installer or developer that might be looking at the situation and wondering, how can I guarantee my module supplier at a certain price?

In my eyes, supply is more important than price. Like the old saying from the stock market: It’s about the time in the market and not about timing the market. So to make sure one is constantly present as an actor in the market. This is what in the end creates the biggest value for a company and all of its stakeholders.