On August 8, Hanwha SolarOne officially unveiled its latest venture: Hanwha SolarEnergy America (HSEA). Having strategically invested around US$50 million over the past two years in various U.S.-based solar companies covering the photovoltaics supply chain, it is fair to say the South Korean manufacturing giant is well prepared for taking its solar business stateside.
As Mark Bronez, the new president of HSEA tells pv magazine, prospects for the U.S. solar market are "very bullish" and, on the back of 85 percent growth from the first quarter of 2011, to the first quarter of 2012 in the region, HSEA is confident it can successfully compete in the arena. "Market share will be growing significantly year on year," he states.
Bronez goes on to say HSEAs plan is to leverage the Hanwha Groups advantages of bankability, cost competitiveness, and shifting business focus downstream. "I come from a background of downstream business and we feel thats an area where theres high value and high profits," he explains.
HSEA already has a one GW photovoltaic North American pipeline and has completed a number of smaller photovoltaic projects in California. Bronez says that while the company will work in all three photovoltaic market segments residential, commercial and utility the main focus will be on the residential and commercial sectors.
The commercial rooftop space is particularly exciting, he adds, due to the market potential and relative bureaucratic ease of such processes as permitting. "Id say the growth in the future, especially as we get to be incentive-less, in three years say and further, is rooftop based."
Regarding the residential sector, Hanwha is currently investing in a number of different areas, such as its sponsorship of the Giants and recently-announced partnership with Southern Power, in order to boost brand recognition with end consumers.
As with an increasing number of photovoltaic module manufacturers, another key strategy for HSEA is product differentiation. Hanwha SolarOne has been working on the introduction of a smart, or intelligent module for "most of the past calendar year" with such companies as Enphase and Tigo.
CTO of Hanwha SolarOne, Chris Eberspacher, tells pv magazine, "Going back to the pre-Hanwha days of Solarfun, it was an OEM supplier and the name if the game there basically is to make a good quality product that looks exactly like everyone elses. Today, Hanwha is aiming to distinguish itself in order to demonstrate the fundamental capability and quality that we believe the Hanwha infrastructure can provide part of that is to [move] to higher value products like the smart products and then, as the technology team delivers on that and delivers the documentation on that additional value, we turn to our sales colleagues, in order to realize that value in terms of average selling price and gross margin."
On the whole, Eberspacher keenly believes the smart module space will become increasingly popular. "I think whats interesting is that utilities start valuing it from the utility perspective and paying for it and that will add to its value."
Storage solutions is another area, where Hanwha SolarOne is securing its market place. On July 10, it announced a new partnership with U.S. storage system company, Silent Power. At the time, it stated, "The investment [the company has initially invested $8 million] in Silent Power is an aggressive move into an important market downstream and lays the foundation for a robust partnership."
Eberspacher adds, "Weve made an initial investment in energy storage in order to be broadly active in the energy management field, because we believe energy management will maximize the value of solar in the near term but, also quite frankly, energy management might extend the penetration significantly beyond what one might otherwise imagine solar could do and actually strengthen the grid overall."
Responding to how long it will be until solar systems, combined with energy storage solutions, can compete with other power sources, Eberspacher says, "Depending on the application, that time is now. Just like for solar in general, each incremental reduction in cost, and because of that, in your ability to offer up an attractive price, further broadens that attractiveness. So today, the product is attractive to people that have particular needs or interest in energy storage. We think the new relationship we have with Silent Power will be effective in helping to address that sector and that sector is an attractive one for us from the standpoint of overall profit opportunity."
Overall, Mark Bronez is assured that HSEA has what it takes to carve out a strong presence in the North American solar market. In addition to investing in a host of different U.S. companies along the supply chain, including wafer technology with 1366, system technology with Silent Power and TenKsolar, and the downstream business with Solar Monkey and OneRoof Energy, he says the company has proven bankability, and "bankability is key".
Indeed, as Bronez points out, not only does it provide the buyer with security, but it is also essential to structuring "innovative, best in class" project financing. "The key to so much is project financing and you dont do it without a strong, bankable company behind you," he concludes.