Interview: ET Solar to expand Europe operations despite MIP ruling

pv magazine caught up with Patrick Guo, ET Solar’s VP for operation and sales, at the recent Ecobuild exhibition in London, U.K., to discuss the company’s strategy for the British market, its wider expansion plans and module innovation. Guo also remained confident that the company could thrash out reconciliation terms with the European Commission (EC) following revelations last week that ET Solar breached the terms of the minimum import price (MIP) agreement.

pv magazine: How important is the U.K. market for ET Solar?

Patrick Guo: It is one of the most important markets for us. We have entered the market strongly in both the EPC sector and module sales sector in recent years. The U.K. is a very stable, reliable and sizeable market, so while there are slight changes to market conditions and regulations in the U.K., compared to other leading markets it possesses an attractive stability and a step-by-step growth that we feel, by around 2017, will make it an immensely significant market to us.

What are ET Solar’s plans for the commercial rooftop market in the U.K.?

The U.K. market began as a residential market in 2010. At that time we were very focused on residential in the first two years of our expansion into the U.K. Then we switched to ground mount to take advantage of the booming conditions we have seen in this sector over the past year or so, and last year we began to focus on the commercial rooftop sector. We recently supplied a meaningful project of 6.1 MW for Marks & Spencer – the biggest rooftop array in the U.K., which was connected in February.

In the future, commercial rooftops will be very important for the share of the U.K. PV market. As ground mount shrinks, more and more focus will be placed on commercial rooftops. The residential sector will remain sustainable, but I think supplying commercial rooftop arrays for warehouses, supermarkets, distribution centers etc will come to form large portions of our business in the U.K. in the future.

The European Commission has said that ET breached the volume of module sales that they were allowed during the EPC process at ground mount level. How will ET Solar respond to this in 2015 and beyond, given that the focus now is likely to be commercial rooftops?

ET Solar has been vigorously following all regulations in European market. Our internal investigation and analysis suggest that the discrepancy between module sales quantities between ET Solar reports and the European Commission record was most likely caused by the data dissemination problems and will be conveniently reconcilable.

ET Solar has said that it does not believe its business in Europe will be negatively affected by this matter. How will the reconciliation process work, from your point of view?

We are preparing an in-depth response to the European Commission with very sufficient evidence to prove ET Solar’s full compliance with the Minimum Import Price rules and the good profitability that we achieved out of all module sales into the Europe during the period. In addition, we are also requesting a public hearing where we will be able to further clarify and explain the matter to the European Commission judges as the case develops.

ET Solar currently manufactures its solar modules solely in China. In light of the U.S. trade case and the recent Minimum Import Price (MIP) revelations, does the company have plans to make panels elsewhere?

We manufacture mainly in China currently, but we are planning to open overseas facilities in the near future, particularly as a means to supply the U.S. market in the wake of the anti-dumping duties imposition. That is currently in the pipeline.

Could you tell us where?

It could be in Central America or Southeast Asia.

What are the difficulties in reaching the U.S. market for ET Solar?

Since the duties were imposed to all Chinese and Taiwan cells and module manufacturers, it greatly affected the business of ET Solar as well as all other tier one Chinese & Taiwanese manufacturers. That’s the reason why we are planning new production facilities outside of Taiwan and China. Beside this heavy tax, the U.S. market policy keeps changing, so there are always new reviews and rates. Until mid-May we will still supply the market a little with our panels from China, but we are going to reschedule our plans from May in light of proposed policy changes.

ET Solar’s R&D presence in China is large, and regularly pumps out a wide selection of module product types. How much emphasis does ET Solar place on innovation?

Innovation is extremely important for ET Solar. We are not going to win the market by our production capacity alone. We are faced with very large competitors that can always increase their capacity greater than ET Solar is able to.

But one of our advantages is our product innovation. We constantly try to service our customers with a wide range of products, and we listen to what our customers want and try to meet their special demands. From the first large project that required transparent modules – a greenhouse project in France three years ago – our R&D team has always been developing new technology and products according to customers’ specified requirements. We are also developing optimizer and microinverter technology that we hope can keep us competitive in an increasingly tough market.

This is our customer-oriented approach to product development. We are also an EPC business, so the system optimizer we are working on will be very important for our service to optimize the power output of the plants we install; not only from the module level but also from the data and ownership of the system, bringing down installation and electricity costs. Module innovation is imperative, and so is system improvement.

Are you developing optimizers under the ET Solar name or with a partner?

We are doing both. We are working on R&D in China and have a strong team in Munich working together to make this happen.

What markets are most demanding for ET Solar – what drives your innovation?

In the U.K. market, our low-light modules are best suited, and that has driven innovation. The U.K. is often a rainy, windy place, so we developed technology to suit. Different markets have different characteristics, so ET Solar products have to be adapted to each one – that is our focus. We hope that we can develop the most optimized solution for each market we approach.

Interview by Ian Clover.