[RE-wrenches] Chinese solar cells and modules and pricing

Keith Cronin electrichi01 at yahoo.com
Mon Jun 8 11:13:15 PDT 2009


Joel

Chinese quality will improve for sure and trust is something we ought to get used to. The Chinese own more US Treasuries than anyone breathing on this globe, so we are married at the wallet. If our government can have this type of relationship, it is only going to "grow" as time moves forward. I want to more call it a shotgun wedding of sorts- we both need each other and our parents (government) have decided it is going to be forever.

Not to digress down an economics discussion, but their sovereign fund is deeply embedded in our dollars, even though the yuan has gained more in value over the last 4-5 years, hurting their investment in "US". Our foreign deficit to them will continue, as our national debt was 41% of the economy last year.....now this is unsustainable.......we are over leveraged as a society as a whole.........

I wonder who the dictators are anymore?




________________________________
From: Joel Davidson <joel.davidson at sbcglobal.net>
To: RE-wrenches <re-wrenches at lists.re-wrenches.org>
Sent: Sunday, June 7, 2009 3:05:48 PM
Subject: Re: [RE-wrenches] Chinese solar cells and modules and pricing

  
Chinese quality will improve and price is 
important, but I think that doing business with people who 
you trust and respect comes first. Some of you remember Bill Lamb. The 
Wm. Lamb Company was the world's first PV distributorship. Bill helped a 
lot of us get started in the business. I learned a lot about PV and 
business in general working for Bill. Here's a Bill Lamb true 
story. Before moving to Camarillo, Arco Solar was in 
Chatsworth about 16 miles from the Wm. Lamb Company so Arco referred a 
lot of customers to us. In 1983 or 1984, Arco 
sent three Arab gentlemen to us. They selected about $50,000 
in solar modules and other equipment which was a big sale in those 
days. One of the men pulled out cash and told Bill that 
they plan to buy a lot more solar equipment and will 
buy it all from him if he did not sell to Israel. Bill's reaction 
was immediate. It was the only time I ever saw him get angry. He 
told the men to go to hell and that he would never sell anything 
to them. Then he walked out the building, got in his car, and drove 
away leaving me with the three shocked men. They asked me 
what to do. I told them that Bill was the boss and had the 
final word so they left without buying anything. A few hours 
later, Bill returned and I asked him if he refused to sell to the Arabs 
because they were boycotting Israel. Bill said, "It's not just about 
Israel. I refuse to do business with dictators."
Joel Davidson
----- Original Message ----- 
From: Keith  Cronin 
To: RE-wrenches 
Sent: Sunday, June 07, 2009 1:45 PM
Subject: Re: [RE-wrenches] Chinese solar  cells and modules and pricing

PV enthusiasts- 

Perhaps a fresh perspective on these products  deserves some attention after the last few thoughts shared by Bill & Joel,  who are industry respected stalwarts that deserve and receive alot of respect  from me and the rest of us.
As some of us grew up when we thought Japanese  types of products- from toys to cars where less durable, they eventually  created fantastic products to be the envy of the world. Just look at most  electronic gadgets and cars 10 years ago to draw some distinctions.
A new  dawn has arrived, which parallels this analogy. The Chinese have been able to  import the technology and systems to develop world class modules. using alot  of the pick and place robots the other contenders are using. SunPower makes  the lions share of their products in the Philippines and I recall the building  is so large and long, that you can see the curvature of the earth.
Just as  the computer revolution started in the US, most of the parts and silicon  platforms have been made in Asia. Sure it can take time to polish the  products, but this is inevitable. China will continue to thrive and deliver  competitive products that will have quality attributes for years to come as  their population gets increased education and awareness of what the world  solar stage demands- inexpensive modules.

The PVUSA facility was circa  1986 and sold to David for a buck in 1997. Alot of innovation and  understanding came from those formative years and we as an industry are all  grateful. As Joel points out, if you are going with these types of products,  "check in" with your clients, as this is one of the ways to monitor any signs  of degradation. Yes, a Barrons report shared with me says many of the similar  things about our Chinese manus' thats hard to ignore: 


June 3, 2009, 1:53 pm
China Solar Vendors Slash Module Prices, Analyst 
Says
Posted by Eric Savitz 
Chinese solar vendors are offering modules for prices far below what most  investors likely suspect, according to Hapoalim Securities analyst Gordon  Johnson.
In a research note today, Johnson asserts that some of his “most trusted  industry contacts” say that companies like Yingli (YGE), Suntech (STP) and Trina Solar (TSL) are offering modules for sale at  $1.70-$1.80/watt, or 1.21-1.28 Euros/watt. He notes that  at the recent Intersolar conference, the talk was that solar  modules were priced in the 1.60-1.70 Euros/watt range.
Johnson contends that U.S. investors may be underestimating the ability of  Chinese solar module companies to significantly lower their non-silicon costs  - specifically, by cutting wages. He writes that “we are hearing that Chinese  solar module factory workers are willing to work for little-to-no-pay” in  order to improve their company’s competitiveness and “as a matter of national  pride.” According to Johnson, volumes available at the lower price levels is  effectively unlimited.
Johnson, who already had been bearish on the sector, notes that there are  1.5 GW of solar module inventory in the channel, and that Spain, which in 2008  accounted for nearly 50% of global module consumption, “has basically gone to  zero.” His view: “At the risk of stating the obvious, this does not bode well  for U.S./European solar module vendors given the commodity underpinnings which  define this space,” he writes. “Assuming these prices stock, we believe solar  industry fundamentals are in bigger trouble than we expected this year.”
Johnson specifically advises taking short positions in SunPower (SPWRA), Q-Cells (QCE.DE), First Solar (FSLR) and SolarWorld (SWV.DE).

So- where does this leave us?

Clearly this trend is going to continue and perhaps look at it another way.  If mod pricing will continue to decline over the next 10 years and infinity  and there are a few companies out there who will fail with their products, we  will have a declining cost basis for our client base to purchase new products  at perhaps a cost delta that is palatable and I envision below dirty power  rates. Will it be the $1 watt? This would be a huge milestone and we could be  there with growth and innovation leading the race. Increased cell efficiencies  with a new mix of products yet to be birthed......


I am not trying to justify bad manufacturers from pumping out poor  products, but GM did it for quite a few years in the race to compete and now  we own (as a country or the treasury) 60% of the company, which could also be  worthless depending upon the tempo of our economy.

The irony is everywhere. We used to be dissapointed that the Chinese  government had their hands in their private industries and where constantly  meddling, but we are not doing the same- autos, banking and insurance to name  a few.

In light of this, even looking at a companies finacials, and peering into  the Chinese manus balance sheets could also be unclear, again, as the Barrons  reports suggests this might be not telling the whole story.


So, the cost per watt conversation is the one we will have for some time,  as this is the leading metric and I think it is more than just a few pennies  per watt, but the delta is significantly wider. On the residential scale, of  the 2-5kW range, not as influencial, but do a 50kW and north of this and the  impact is tangible. in our free market economy you can understand a company  offering these products and really stinging the company offering Solarworld  (oh, wait - Arco, Siemens, Shell) for a particular project. Mods represent the  largest piece of the solar pies project costs, so it is plausible to look for  alternatives.


A way to navitage through this minefield of uncertanty, is we need as an  industry to perhaps move the conversation from cost per watt to a performance  based reality. If we buy power from the utility per kW, my vision is some day  we can orchestrate the same. This will greatly improve our field of interest  and everyone benefits when performace meets the expectation, regardless of  system size. Our treasury, at the fed and state levels will pay proportionatly  for actual energy created, levelizing the conversation about subsidies with  real time, empirical data to back up the efficacy of what we are doing.

For a better tomorrow~

Keith




________________________________
 From: Joel Davidson  <joel.davidson at sbcglobal.net>
To: RE-wrenches  <re-wrenches at lists.re-wrenches.org>
Sent: Sunday, June 7, 2009 7:11:11  AM
Subject: Re: [RE-wrenches]  Chinese solar cells and modules and pricing

I have a lot of  respect for Bill, not just because he sometimes agrees with me (smile), but  because he worked at Davis California PVUSA and other places and saw a lot of  innovative, but flawed PV. He knows first-hand that dozens of PV companies  and/or products have come and gone in the search for the $0.10/kWh holy  grail.

I wish the Chinese well, but am concerned about the wisdom of  buying Chinese modules. On the one hand, I welcome China into the league of  nations and support their progress toward democracy. Hopefully, Chinese  national and local dictators will grow up and become civilized. On the other  hand, latest reports from China, according to Hapoalim Securities analyst  Gordon Johnson, is that Chinese solar module factory workers are willing to  work for little-to-no-pay. There's a big difference between "volunteering" in  the war of economic imperialism against the West and the volunteer work  Wrenches perform in their communities and around the world.

But back to  nuts-and-volts. Last year China became the largest producer of crystalline  silicon solar cells. Although some companies admit that their modules are made  in China, few companies with factories outside of China say they build their  modules with cells outsourced from China. This is not all bad news because  crystalline silicon cells are some of the most stable products ever made.  However, you do have to protect yourself and your customers' investments,  especially if you are a California contractor required to give 10-year system  warranties. I recommend getting each module's IV curve, keeping the IV curves  in your customer file, performing pre-installation tests (at least Voc and  Isc), and performing annual systems inspections and tests. Look for cell-tab  corrosion, front and backsheet delamination, and discoloration. Most customers  will pay to see you once a year if your manner is professional and your  service charge is reasonable.

Joel Davidson


----- Original  Message ----- From: "Bill Brooks" <billbrooks7 at yahoo.com>
To:  "'RE-wrenches'" <re-wrenches at lists.re-wrenches.org>
Sent:  Saturday, June 06, 2009 10:19 PM
Subject: Re: [RE-wrenches] Chinese solar  cells and modules and pricing


> All,
> 
> How many  of these Chinese manufacturers will still be in existence in 5
> years  (probably less than half)? Are you really willing to risk a company
>  and reputation for a few pennies per watt? Certainly several of the  big
> companies are likely to survive, but you are playing a new game of  "Chinese
> roulette" with many of these companies.
> 
>  These are manufacturing companies, not stable companies with a long past  and
> future. The value proposition is so dramatically different from a  major
> company to one of these Chinese manufacturing companies to make  the
> comparison nearly idiotic. Most of the installers using these  products have
> way more guts than I have. Many will find their guts on  the ground as the
> get disemboweled by bad choices. Don't you love the  imagery.
> 
> Yingli's one of the big companies now, they might  survive. I'm sure they are
> learning every month that they proceed how  to better manufacture modules.
> They have been a player for two  years--no major problems--YET. How does a
> year in the field show that  a company is doing everything correctly? Oh, and
> their fuse size is 10  amps on an 8 amp Isc module. They obviously are not
> all that  sophisticated.
> 
> Folks, you need to let the dumb contractors  screw up and buy the cheap
> stuff. Now, more than ever, you have to  sell on brand. The more the young
> Chinese stuff gets in the field and  craps out, the worse our industry is
> going to take it on the chin in  the public eye. It's just not worth the
> price difference. As Joel  points out, let the multi-MW projects make the
> stupid mistakes--that  will just scare away the capital investment--oh wait a
> minute--we  really need that.
> 
>  Bill.

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