Solar Photovoltaics: A High-tech Commodity

Woodlawn Associates interviewed nearly 20 U.S. and European solar developers, integrators, and financiers to gauge their impressions of PV module vendors and learn how they could improve. The maker's nationality has little relationship to module consideration. PV modules are viewed as commodity-like, with cost as the top consideration, though financing, stability, and integration/flexibility are ways to differentiate. Utility-scale developers are also concerned that some module vendors also develop projects.

How likely would you be to consider using global vendors?

Woodlawn Associates asked survey participants from U.S. and European developers, integrators, and finance providers to consider vendors from the People’s Republic of China (PRC), Japan, Europe, and the US, and rank their interest in these vendors. The results suggest that geographical location has no great impact on consideration. Suntech, a Chinese company, ranked highest. Japanese companies score well as a group, with high confidence reported in warranties and a respect for Japan’s long PV history.

Figure 1. How likely would you be to consider using each of these vendors, with 0 being

not at all likely and 10 being extremely likely? Source: Woodlawn Associates.

Interviewees said they prefer domestic modules, but often don’t use them due to price. Companies with products well suited for a niche may have scored better in a narrower survey, though: Uni-Solar does well with installers concerned with weight, but not as well otherwise.

PV Modules Are Viewed as Commodity-like

Developers and integrators see modules as commodities. One utility-scale developer CEO said, "A solar panel is a solar panel is a solar panel. It’s amusing to me when these guys try to tell you how different they are. It is a complete commodity." Others echoed this sentiment. Interviewees typically mention cost as the most important criteria in vendor selection, even when performance, reliability, availability, and company stability are also factors in the selection process. However, bankability and secure warranties are must-haves as well. "Number one is bankability. Second is landed cost," said one procurement manager for a commercial integrator.

Differentiators can include power/price and power/size ratios and local manufacturing bases to customers. Other areas to concentrate on include reducing materials waste, integrating modules with balance of system (BOS) components to streamline supply, and focus on scale (perhaps by manufacturing in low-cost/high-volume geographies). Vertical and horizontal integration are options for module suppliers, which can go upstream into silicon growth, downstream into project financing (discussed later), or into related fields of energy storage and BOS.

Figure 2. Factors that decide solar module selection. Source: Woodlawn Associates.

Source:   Renewable Energy World.com - Read Full Article Here