In the Eddie Murphy film Coming to America, the protagonist prince quickly realises that the USA is not a place where guests come to sit on their hands when he lands himself a job at a McDonald's lookalike fast food joint on his quest to find a wife.
In today's global fast food chain of PV manufacturers, some guest solar manufacturers from abroad have sacrificed volume over quality in this land of opportunity where calories are cheap, but nutritious, sustainable food is expensive.
Arturo Herrero, Chief Marketing Officer at Jinko Solar, gave a good account of the company's game plan that had seen it succeed where many other Chinese ‘transplants’ like it have failed. Herrero said the company was the only profitable large Chinese solar module manufacturer in the US and had reached 1.2GW capacity by the end of last year. Its polysilicon supply of US$25 a kilo means it can produce modules at 66 cents at watt.
But not everyone is impressed by the gigawatt race in the US solar market, where for once, size isn't everything, said Ryan McMeniman President and Chief Executive at Ward Hill Marketing in Massachusetts. McMeniman told the story of how he “coached” Shanghai-based executives of Solarfun before it was acquired by Hanwha.
“At the time when Solarfun was coming to the US, they had a very hard time being taken seriously and it had nothing to do with the name,” he said. “It had everything to do with how they were perceived by the people in the marketplace.
They weren't bankable, even though they had massive amounts of megawatts installed in Germany under somebody else's name. So it becomes a game of volume not quality; that's not where we want to be. Pushing down the cost of everything degrades the brand. At the end of the day, it doesn't help.
“We all wanted the gigawatt race – but what about the 20% race? What about modules that are going to last more than 10 years because of the quality in the manufacturing that was put into them? That's what we have to talk about, not driving down the cost.”
Aside from the complexities of federal and state incentives and regulation in the US, it was also important to bear in mind that the “point of view in California is not the same as the view in New Jersey”, McMenimen said.
“There is not one America. Energy independence is going to work in some states; green is going to work in other states. Local manufacturing may be important in a state such as Nevada that has an unemployment rate of 11%, but not so much in Massachusetts which was 6.7% unemployed.”
Roger Little, founder of Spire Corporation in Massachusetts, put forward an idea to generate more opportunities for US-based PV manufacturing with point-of-use assembly lines sited at utility-scale solar farms that made “super-size” modules of 1,000W, a ‘McDonald's of solar, version 2.0’ if you like.
“We're trying hard to put module factories in the US but as you know foreign competition is relentless especially from the Chinese, the low-cost manufacturers in the world. But [now] they are being subjected to the 32% duty which gives you a little more advantage for manufacturing in the US,” Little said.
Module costs would not be altered too greatly, he said. But the real savings would come from the system that would require fewer components. A 1,000 watt panel to serve a utility market estimated to reach 4,425MW by 2016 would cost US$3.11, versus US$2.57 for a 250w panel.
Shayle Kann, vice president at GTM Research, said he expected aggressive growth in the US over the next several years to take it to around 14% of global market share.
“The US has held a surprisingly steady share of the global market — somewhere between 5% and 7%. It wasn't outpacing the global market, but it should be, starting this year and heading into the next couple of years. We don't expect to see the same kind of massive growth out of the global market that we do out of the US. The US is becoming a more important market,” Kann said.
The utility sector would indeed be a potentially profitable sector to target, despite what the headlines lead people to believe, he said. “The residential market is the incrementally growing base of the market. It's the smallest market segment and it grows every quarter but it only inches upward. We haven't seen this massive boom in the residential market yet despite the fact that if you read the news you would think the market is booming just based on the growth of third-party residential owners. That model [the 3rd party ownership] model is taking over the market. But isn't really expanding the market taken up the whole pie yet though we expect that it will.”
One of the really interesting points Kann drew from his data was a slump in Chinese imports in Q2 this year in response to the preliminary determination on the anti-dumping case which has since been finalised.
But the jury is out on what impact that will have on the home team.