Los Angeles -- Suntech Power Holdings is shifting from manual to automatic.
The Chinese solar giant, which will ship approximately 1.5 to 1.6 gigawatts of modules this year, has begun to deploy equipment for producing modules and solar cells in its factories that it has designed itself.
The idea is to boost production in a way that, ideally, competitors can’t easily replicate, says Steve Chan, president of Suntech America, during an interview at Solar Power International. On one line in China, production has increased from 25 megawatts to over 30 megawatts while manual labor has been reduced by 70 percent.
“One can buy off-the-shelf equipment, but where is your differentiation?” he asked rhetorically.
The homegrown equipment is currently used to produce Pluto cells, but it will trickle down to other product lines. Homegrown equipment will be created for more parts of the cell manufacturing line and to produce modules. The module equipment ultimately will end up in the Arizona module factory inaugurated last week in a ceremony with Governor Jan Brewer and CEO Zhengrong Shi.
“We want to figure out how to narrow the cost (of production) between China and the U.S.” said Chan, and equipment is one way to do it.,
The ability to produce equipment internally came in part from the acquisition of Kuttler, which made printed circuit board equipment, and a Chinese company.
The buy-or-build debate about equipment is one you’ll likely hear more about in the future. Designing process equipment is time consuming and expensive -- costs can easily run into the tens of millions. In semiconductors, chip designers fobbed off equipment manufacturing to companies like Applied Materials decades ago (see http://www.greentechmedia.com/articles/read/suntech-abandons-thin-film-experiments-revenue-up-for-2q/).
Some copper indium gallium selenide (CIGS) companies like AQT Solar and NuvoSun have decided to circumvent this by buying machines created to produce hard drives and LCD monitors and tweaking them for their own purposes. AQT spent only $15 million and two years on its first production line. Other CIGS companies have spent hundreds of millions.
Still, homegrown advocates like MiaSole’s Joseph Laia argue that solar panels are more generic than semiconductors. A company’s intellectual property will invariably be bound up more in factory processes than final products.
IP protection was a motivation for Suntech, too. Last year, the company became concerned that a third-party equipment manufacturer might have gained the ability to shop equipment being designed for Suntech’s Pluto high-efficiency solar cells to other manufacturers.
“It was a warning experience,” he said.
Other news from Suntech:
--Count it out as a solar developer. Although competitors First Solar, SunPower and now Sharp have active internal organizations for developing solar power plants, Suntech will work with third parties. Gemini Solar, a joint venture to develop power plants with Fotowato, has largely been terminated. The one project Gemini landed, a plant in Austin, Texas, has been passed to Fotowato. Gemini has been somewhat inactive for a while.
--The company expects to ship 2 gigawatts of modules next year. In the U.S., it will ship 260 megawatts this year, higher than the 200 megawatts prediction Chan gave us back in January, and 500 megawatts in 2011. Last year, Suntech shipped approximately 700 megawatts globally and 65 megawatts in the U.S.
In the U.S., approximately 1/3 of the modules go to utility projects and 20 percent go to residential products.
--Panels with Pluto cells (sold under the HiPerforma name) have been shipping in Europe and will come to the U.S. in the second quarter of 2011. Suntech experienced a delay earlier this year.
--The location of the Arizona factory will allow it to comply with the Buy American Act, according to Wei-Tai. Under the Act, a manufacturer has to transform components into a finished good. Assembling Ikea furniture wouldn’t qualify, but taking cells and fashioning a module does. By complying, Suntech can now bid on projects backed by American Recovery and Reinvestment Act funds. Only nine module makers qualify for that privilege.
--Earlier this year, the company obtained UL certification for its Reliathon utility-scale modules, which come in frames that fit together in a tongue-and-groove fashion to reduce labor in the field. Panel differentiation is where it’s at.