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Will Silevo’s US Solar Plant change the outsourcing trend in Solar Panels

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New Solar Panel Plants in US

Small US solar panel maker Silevo Inc. plans to build a solar panel making factory in the US as it looks to capitalize on growing US solar demand. The company has a 32 MW plant in China and plans to expand capacity to 200 MW. Demand in the US grew by more than 50% in 2012 and the trend is set to continue over the next 5 years, as solar energy penetration in the US remains very low. Silevo thinks that the manufacturing cost is comparable as the utility cost in China is higher and labor costs are almost the same. The anti-dumping duty on Chinese made solar panels also makes US manufacturing more attractive.

I don’t agree with Silevo’s assessment, as companies have been closing solar production plants in the US left and right. Kyocera which is seeing a tremendous growth in solar demand in its home market, recently closed a US wafer plant as it was too costly to make components. Other smaller companies too have closed solar plants in the US after the imposition of duties on Chinese solar panel imports. A large ancillary industry has developed in China and Taiwan to support the solar industry there. This dramatically lowers cost as large producers such as GCL Poly have co-located factories with their principal customers. The solar panel industry has become super competitive, with solar panel producers lowering prices by 60% in the last 2 years. A small niche producer like Silevo might be able to sell some costly solar panels through marketing gimmicks. However, opening a large solar panel plant in the US does not remain feasible in my view.

Readers should also note that Yingli Green Energy (YGE), Trina Solar (TSL) and other Chinese producers of solar panels have sold huge quantities of solar modules in the US, despite suffering from a cost disadvantage due to US government duties on solar panel imports. Silevo would do well to properly plan its new investment, otherwise it will be more money down the solar startup drain ( Solydra, Miasole, Nanosolar etc. etc.)

Bloomberg

Silevo Inc., a U.S.-based solar manufacturer, plans to grab market share from SunPower Corp. (SPWR) by expanding production capacity sevenfold. Silevo, which has raised $72 million in two financing rounds, is in talks with private-equity investors and financial institutions to close financing on a 200-megawatt cell and module plant in the U.S., said Christopher Beitel, executive vice president of global business development and planning. It currently produces cells at a 32-megawatt factory in China. Silevo currently hires other companies to package the cells from its Hangzhou plant into modules. By making a larger portion of its modules in-house in the U.S., it will be able to control expenses by cutting shipping costs and ensure greater protection of its intellectual property, according to the producer.“Water and the electricity in China are much more expensive than in the U.S., and the labor cost is very close,” Chief Executive Officer Zheng Xu said in Munich. “In terms of production cost, it’s very comparable to North America.” The company plans to use its production facilities as hubs, with the Chinese plant serving the Asia-Pacific region and the U.S. site serving North and South America. It intends to announce details of its U.S. factory this year and start producing in mid-2014, Beitel said.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

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