Dr. Peng Fang, the CEO of vertically integrated solar giant JA Solar Holdings (Nasdaq:JASO), spoke with Greentech Media on Tuesday about photovoltaic technology, global trade, and the future of China's domestic solar market.

Capacity and Recent Financial Results

JA is an enormous firm that had 3 gigawatts of solar cell capacity and 1.2 gigawatts of module capacity at the end of 2011, according to Jonathan Pickering, the president of JA Solar Americas. GTM Research estimates run a bit lower than that, but JA solar remains one of the largest and faster growing solar companies in the world. JA shipped 445 megawatts in the third quarter of last year and guided 2011 at a total of 1.6 gigawatts of cells and modules, down from an earlier guidance of 1.8 gigawatts. Gross margin was negative 4.3 percent in the third quarter of 2011

Technology and R&D

Late last year, JA Solar announced that its high efficiency Maple solar cell hit conversion efficiencies of 18.5 percent in full-scale production, with a production average of 18 percent efficiency. Typical conversion efficiency for multicrystalline solar cells is approximately 16.8 percent, according to the firm, showing JA Solar's multicrystalline cells to achieve monocrystalline efficiency levels. The JA process produces silicon crystals that are "broader, flatter and have fewer grain boundaries than traditional multicrystalline silicon," according to the firm. The company is aiming for 18.8 percent efficiency for its monocrystalline product and 17.5 percent for multicrystalline.

JA has more than 100 R&D people in the U.S., EU, and China, and has amassed 50 patents.

The U.S. and China Solar Markets

Dr. Fang sees the solar industry as still in its very early days. He said that China installed approximately 2 gigawatts of PV in 2011 and that this year could see anywhere from 4 gigawatts to 8 gigawatts installed in China. Fang put this in perspective: today, China generates 900 gigawatts of power, and the country will need 1,600 gigawatts in 2020. Even if China aspires to generate five percent of its energy from solar, the solar industry will have to grow an order of magnitude to meet that five percent bar.

In a recent interview, Pickering saw reason to expect a 6-gigawatt U.S. solar market by 2015.

Trade Balance and the Impact of the Tariff Threat

According to the CEO, JA Solar, purchased immense volumes of solar-related products, including raw materials and production equipment, from U.S. suppliers in 2010 -- all while selling little in the U.S. JA Solar’s purchases from U.S. suppliers actually exceeded its export to the U.S. market by over $300 million, according to the firm. Applied Materials solar production equipment was one of the items on JA's shopping list.

Fang notes that JA has downstream customers in the U.S. and that the low prices of solar modules are helping the solar industry achieve grid parity.

JA had plans to invest $500 million in the downstream market but has put that investment on hold because of the pending module tariff ruling. "We are waiting to see what happens," said the CEO.
Fang declined to discuss the SolarWorld anti-dumping claim but noted that it's one thing to sign an MOU with the China Development Bank and another to draw down funds. He notes that interest rates are relatively high from the CDB, adding: "There is no free government money" and "no free lunch." Like many Chinese suppliers, the firm is looking to set up some operations in North America.