Trina Solar expects 30% of revenue from downstream project business

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

Trina Solar, one of the last major tier one module manufacturers to embrace the downstream project business model, is planning to have 30% of annual revenue attributed to PV power plant projects in the next three years.

Management noted in a conference call to discuss third quarter financial results that it expected a rapid ramp of its project business in 2014, which would equate to a quarterly project run-rate of between 100MW to 200MW by the end of next year.

The expected growth is primarily due to renewed support for solar by the Chinese government and attractive incentives for both utility-scale and distributed generation (DG) programmes that are expected to see around 15GW installed in 2014.

“I’m happy to report that our 50MW PV project in China connected to the grid in September 2013 and is already generating electricity on schedule,” noted Jifan Gao, chairman and CEO of Trina Solar.

“The project has attracted interest from a number of potential buyers. We are currently assisting what option may generate the greatest shareholder value. In the future, we will continue to strengthen our leading position in the module products. We are expanding our downstream efforts.”

The 50MW China project was said to provide a 10% IRR if retained due to feed-in tariff payments and could generate 20% gross margins if the project was sold outright.

However, Trina Solar noted that projects in the UK, US and emerging markets such as South Africa and Latin America would also provide meaningful revenue from its growing downstream business.

Management noted that its PV project pipeline momentum and plans would lead to around 15% of revenue in the next two years and targeted 30% or more in the coming next three years.

The company also embraced the idea recently seeded by SunEdison that it was looking at retaining a percentage of projects that could be bundled into a portfolio to attract investors in a ‘yieldco’ arrangement. 

Terry Wang, Trina Solar’s CFO, said in response to analyst’s questions on yieldcos that it was too early to make a definitive decision but noted that it was “one of the option[s] we should think about it if there is a promising future”.

Return to profitability

Trina Solar reported third quarter 2013 net revenue of US$548.4 million, an increase of 24.4% from the second quarter, supported by record module shipments of approximately 775MW, 19.8% higher than the prior quarter.

The company reported gross profit of US$83.4 million, an increase of 62.9% from the second quarter and a gross margin of 15.2%, compared to 11.6% in the second quarter of 2013.

Operating margin in the quarter was 1.1%, compared to negative 5.4% in the second quarter of 2013. Net income was US$9.9 million, compared to a net loss of US$33.7 million in the previous quarter.

Revised forecast

Due to continued strong demand, Trina Solar said that total PV module and system shipments would be in the range of 2.58GW to 2.62GW, up from previous guidance of between 2.3GW and 2.4GW.

During the fourth quarter of 2013, total module shipments are expected to be between 760MW to 790MW. The company said that overall gross margin would be in the middle teens in percentage terms for the fourth quarter.

Capacity expansion and outsourcing

According to Trina Solar’s CFO, the company does not have any significant plans to expand capacity, reiterating that CapEx would be in the region of US$60 million in 2013.

However, Zhiguo Zhu, president of the Module Business Unit at Trina Solar, said: “We have several ways to increase our capacity of production. Firstly, we do some upgrade of technology. So next year our efficiency productivity increase[s]. Actually, we have done that for quite a lot. So that it will be used at an existing facility or plant to increase our capacity.

“Secondly, we are looking for the existing capacity in the market and try to do some expansion including acquisition or merger. We are trying to do that because next year we believe we’ll have better sales.”

Management noted that through production line upgrades and throughput improvements it was able to increase its quarterly module run rate from 600MW to approximately 720MW.

This effectively takes annual nameplate capacity from 2.4GW to 2.8GW, according to the company. Management also noted that upgrades in its solar cell lines had enabled around 200MW extra annual capacity, equating to cell nameplate capacity increasing to 2.6GW.

The company also noted that to fill the void between capacity and demand it would continue to outsource solar cell production in Taiwan to meet US market demand and requirements to avoid anti-dumping duties, effectively boosting cell production to meet upwardly revised shipment forecast for 2013.

Management also noted that it was using OEM modules as well to meet demand, without providing further details.

Annualised in-house ingot and wafer production capacity was said to have remained at approximately 1.2GW, indicating increased outsourcing to match cell and module in-house capacity increases.

The company said that it would provide full-year 2014 guidance in its fourth quarter conference call.

28 July 2021
LONGi has launched its Hi-MO N module, the company's first bifacial module with N-type TOPCon cells, designed to deliver ultra- high value and lower LCOE to utility-scale PV power plants. This PV TechTalk Product Series webinar will provide an overview of the module’s technology and how the introduction of n-type technologies will provide efficiency and performance gains for solar project developers.
29 July 2021
This free webinar will explore the ongoing opportunities in the UK solar PV market, looking at global technology trends and how they apply to the UK. Join us for an overview of the project pipeline and forecast for deployment over the coming years. We'll be looking at the types of modules available and being used in the UK and presenting a case study on the deployment of bifacial modules in this market.
19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?

Read Next

July 26, 2021
A solar-wind-energy storage hybrid project is to power a Madagascan mine after Rio Tinto signed a power purchase agreement with independent power producer CrossBoundary Energy.
July 26, 2021
The pace of climate action in the US is “wholly unacceptable”, according to the director of the US Department of Energy’s (DOE) Loan Programme Office
July 26, 2021
Support for distributed energy resources (DERs) like rooftop solar, community solar and battery storage could save Californian ratepayers US$120 billion over the next 30 years, according to a new report
July 26, 2021
Oil and gas giant Eni has acquired 1.2GW of Spanish renewables from Madrid-based European private equity manager Azora.
PV Tech Premium
July 26, 2021
Boris Farnung and Keith Punzalan of VDE and David Moser of EURAC’s Institute for Renewable Energy take a look at the positive impact comprehensive quality assurance measures can have on the early stage of a project’s lifespan, exploring yield assessments, LCOE projections and the critical need for high quality components.
July 26, 2021
US utility giant NextEra Energy added 1.84GW of renewables and energy storage projects to its backlog in Q2 2021, but its Energy Resources division reported a fiscal loss of US$315 million.

Subscribe to Newsletter

Upcoming Events

Solar Media Events, Upcoming Webinars
July 29, 2021
Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events, Upcoming Webinars
October 6, 2021