ReneSola’s Technology and Market Strategy to Make the Company a Major Force in 2013

Renesola, until recently considered to be a leader in wafer manufacturing, has broken into the category of module maker, with the same zeal for innovation and high quality manifested in wafer technologies

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ReneSola Ltd. (ADR)(NYSE:SOL), until recently considered to be a leader in wafer manufacturing, has broken into the category of module maker, with the same zeal for innovation and high quality manifested in wafer technologies.  The company has been actively marketing its high-efficiency Virtus modules built on its Virtus I and Virtus II quasi-mono and multicrystalline wafers.

Brian Armentrout, Marketing Director, ReneSola Americas

Joining us in exploring those developments is Mr. Brian Armentrout, Marketing Director for ReneSola Americas. He’s in charge of developing and managing the company’s strategic and channel partnerships, development of new and emerging markets, and introduction and growth of ReneSola’s full line of modules and the Micro RePlus microinverter.  Mr. Armentrout joined ReneSola in June after previously heading up marketing for groSolar, a national solar EPC and distributor.

SPVI: We understand that quasi-mono wafer Virtus I has a number of qualities that exceed the characteristics of what was, up to this point, considered high-efficiency mono wafer, particularly having low LID and oxidization and, of course, processing cost. Can you describe the particular cost savings?  Virtus II or AA+ has been referred to as multicrystalline wafer; what is the difference between Virtus I and II, as the process of manufacturing seems the same to the untrained eye?

BA: Virtus II technology, the latest and most advanced wafer growing technology now available from Renesola, further boosts average module output to the 250-260W range from the 235-245W range, resulting in a 15-watt output improvement, but with identical production cost as Virtus I technology. Meanwhile, it maintains excellent benefits common in multi-crystalline modules, such as lower LID, better CTM loss and good thermal coefficient, compared to that of mono-crystalline modules. Through proprietary processes, ReneSola manufactures its modules, specifically the Virtus II, using less energy and creating less waste, resulting directly in lower all-in costs.  We pass the savings on to our customers in the form of more competitive pricing on ReneSola modules. Overall, Virtus wafers offer more power output and better efficiencies for a lower price.

SPVI: Virtus II has the same cost as the Virtus I; can you describe in general terms how this is accomplished?  How do you seek to retain an advantage with your solar modules, with both wafers being sold to customers? Is there a difference between Virtus modules compared to clients using your wafers in their modules?

BA: Because of the use of different seeding during ingot growth, low-cost multi-crystalline seeds within Virtus II provide an alternative solution to reduce the production cost.  The Virtus wafer is most commonly used in modules manufactured by ReneSola. Our existing wafer and module lines manufacture 1.8GW/yr and 1.2GW/yr, respectively.  In the coming years, we will add more module partners outside of China to accommodate local content requirements in certain markets.  A majority of our wafers will be used internally on our own module manufacturing lines.

SPVI: Can you please comment on the cell technology, when using Virtus wafers?  What type of cell processing is required for either wafer (Virtus I and II)?  Based on our past interviews, the quasi-mono product requires Alkali texturing as opposed to acid, which is considered the conventional method.  Are there further opportunities to enhance power output through cell processing or wafer, and what is the road map for this technology? Considering levies in the US and investigation in the EU, would you consider expansion in cell capacity, for example to gain proprietary advantage, or perhaps with locations outside of China to mute any EU protectionism?

BA:  Based on our experience, Alkali texturing provides better light trapping on mono and quasi-mono wafers (Virtus I), thus collecting more sunlight during operation; however, this is only the first step of the technology improvement process resulting in mono-rich wafers. Back-side passivation or front-side selective-emitter are also two substantially feasible ways for us to increase the efficiency of mono-crystalline cell.  Within the two major technologies, the cell efficiency of quasi-mono wafers is improved early in the process.  With wafer technology, reducing the concentration of impurity and defects from bulk ingot are always key in the enhancement of cell efficiencies.  Meanwhile, cost control during the unveiling of new technology will determine which technology will be realized in mass production.

In order to secure the long-term relationships with customers in the EU and the US, we are working very closely with our manufacturing partners outside of China.  We will work collectively with those partners in using our cell and wafer capacity to continuously enhance Virtus wafer efficiencies.

SPVI: Can you tell us what the difference is between Black Mono and Square Mono and what makes the difference in their efficiencies? Are they both produced from large rods through the Czochralski process?

BA: Black mono modules are essentially square mono cells combined with a black back sheet to fulfill appearance requests from architectural design firms and homeowner’s association requirements.  The module efficiency range is 15.4% to 16%.  Square mono modules are manufactured with square mono cells, resulting in greater module efficiencies in excess of 16%, which is beneficial particularly on rooftops where available space is at a premium.  Both products are suitable for the residential market, but only square mono cells are produced by large rods.

SPVI: Can you explain your current wafer capacity by breaking it down into the categories of mono, quasi, multi using MW, and how flexible is it to execute a change in the shift from one category to another? Is there any reason why would you remain with multicrystalline wafer production at all, in light of Virtus II results?

BA: Mono wafer→ 400MW

Quasi- mono wafer (Multi-crystalline wafer)→ 1.8GW →can be switched to Virtus I (mono-like) or Virtus II (poly) flexibly.

SPVI:  Do you see any benefits for you from potential levies on the US and South Korean polysilicon producers importing to China?  China DOC has now added the EU producers to the investigation; ReneSola was not named as the petitioner in the initial filling, why?

BA: We could potentially see some benefits for ourselves from potential levies on US and South Korean polysilicon producers, as we have our own internal source of polysilicon capacity, which is increasing.  But we are opposed to restrictions to free trade from any side.  We are not a petitioner, as we still buy some polysilicon from overseas, and we actively try not to get involved in such disputes.  And as mentioned, we are opposed to restrictions to free trade from any side.

SPVI: Consolidation in China.  There are at least 400 companies still operating in China alone, not including US-listed Chinese companies.  This is a large amount of capacity. How do you see this play out, as everyone sees the necessity of eliminating capacity as a major – if not the only – factor required for the solar industry to thrive?

BA:  2013 is going to be a big year for Chinese module manufacturers selling modules in the US.  Many of those companies who have appeared to have thrived through 2012 are now suffering.  Many of them beefed up their accounts receivables lines by giving lines of credit to anyone and everyone, many of whom never paid their bills.  Those companies have a tremendous amount of long-term debt due in 2013, which will give entirely new meanings to the terms “bankability” and “tier 1.”  Fortunately, we avoided this and do not have that debt load, and feel we couldn’t have entered the US market at a more opportune time.  We are extremely careful when giving credit terms to customers and as one of the world’s largest suppliers of wafers, we’re extremely confident we’ll be among the few remaining PV manufacturers. 

Financially, we’re very strong and stable.  This year, we’ve operated at 100% capacity utilization and have hired more than 1,000 people.  We have strong support and backing for this.  Balance sheet-wise, if you look carefully at a financial analysis (which we run every quarter) – we’re about middle of the pack.   If you look at, say, Debt to Equity, we’re at about 1.6, which is middle of the pack.  In terms of, say, interest coverage or income-statement-to-balance-sheet ratios, we, like pretty much everyone else, are generating limited income and cash flows so the ratios will not come out favorably – which is in line with everyone else.  ReneSola is better than others at operating in a competitive, low-cost environment.  Unlike our peers, we do not sponsor European football teams, hockey teams, the World Cup, or hang out with Patrick Dempsey on the F-1 racetrack.  We’re much more frugal, and therefore are better positioned, both cost-wise and culturally as a company to weather through the current difficult conditions.

SPVI: You seem to have a strategy to avoid the US levies, perhaps using your long-term relationships in Taiwan. How will you adjust to the EU outcome, if this investigation is after all value chain products?

BA: ReneSola only has 240MW of cell capacity in China, so we are not subject to the tariffs.  We are primarily a wafer and module company with strong relationships with Taiwanese cell producers. 

SPVI: Thank you very much for the opportunity to speak to you today Mr. Armentrout

BA:  It’s been my pleasure.  Thank you very much for the opportunity. 

This interview was conducted by Robert Dydo, and edited by Senior Editor of SolarPVInvestor, Stephanie Pierce.