Trina Solar CEO: It’s All Good – August 26, 2013
Trina Solar was selected to supply multi-crystalline silicon modules for Sempra Energy’s 345-megawatt Copper Mountain 3 project — and that could be a signal that PV module prices are flattening.
“The lowest prices for modules have been in the large-scale utility projects,” Trina CEO Mark Mendenhall explained. “We didn’t participate a lot. We felt we could give up a share in that segment until the market stabilized.”
Trina has been focused on the residential and commercial segments. “There was a gap in the relative costs,” Mendenhall said, “that made thin film and other technologies more competitive in utility-scale solar.”
But today’s low silicon module prices make balance-of-system costs more significant than module costs. “The value of our multi-crystalline PV efficiency became more important,” Mendenhall said. “And the number of gigawatts we have installed has reduced the perceived risk and increased the finance ability of a project with our technology.”
Also, he added, consolidation has left fewer manufacturers capable of providing the 1.1 million high-quality modules needed by AMEC, the Copper Mountain EPC provider. The module order must be met for the Q1 2015 construction completion target to fulfill Sempra’s contracts with the Los Angeles Department of Water and Power and the City of Burbank.
Trina’s direct competition right now in the utility-scale space is from Yingli (YGE) and Canadian Solar (CSIQ), Mendenhall said. First Solar (FSLR) (which built the 55-megawatt Copper Mountain 1 for Sempra with its thin-film modules) and SunPower (SPWR) are the leaders in the segment, he acknowledged, but they use different technologies and have different business models that include EPC operations.
Mendenhall expects module prices to be stable, he said, because “there are continuing forces at work reducing costs, but also forces at work pushing the price up.”
The first factor driving the price up, Mendenhall said, is the U.S.-imposed tariff on solar products imported from China. According to last year’s Commerce Department decision, varying tariffs are required, based on the degree of each company’s dumping history.
“Our 24 percent tariff has been in effect for over a year now, and it has prevented us from deploying the high-efficiency honey-cell technology we invested in,” he explained. ”Because the tariff is a burden the market cannot bear, we had to develop strategic relationships with Taiwan cell suppliers, and it adds cost in the supply chain. That is driving up prices in the U.S. and cutting off access to technology the rest of the world has.”