Turkey’s solar ambitions range beyond its borders


Europe’s largest vertically integrated module manufacturer is based in Türkiye. The continent’s largest solar array, the 1.35 GW Kalyon Karapinar PV power plant, is also found there. This did not happen by accident.

It’s a pivotal time for solar in Türkiye. In the first two months of 2024, the country added 1.1 GW of new generation capacity, equivalent to around half of its PV installation total for 2023. And as pv magazine discovered at SolarEX 2024, a three-day trade fair in Istanbul in April 2024, the number of domestic module assembly businesses has ballooned. Different numbers were discussed on the exhibition floor but the general consensus was that there are at least 80, and likely more than 90, Turkish module assemblers.

What’s behind the boom? Installations are trending in the right direction but not at a pace that can support such a swell in manufacturing capacity. Supportive industrial policy and punitive import barriers offer an explanation, at least partially.

Doubling down

Understanding the Turkish solar market means getting to grips with the raft of protectionist measures now in place. While solar stakeholders in the European Union continue to debate the right response to ultra-low pricing of Chinese modules, Türkiye has spent the last seven years ratcheting up its antidumping measures and piling on friction at the border.

In 2017, the government unveiled a list of 16 China-based PV manufacturers whose imported modules would be subjected to $20/m2 antidumping fees. Those were the lucky ones, as other Chinese businesses were hit with a $25 fee from the same measure. That was followed by a new “surveillance duty” that was applied to module imports in 2020 – an indirect tax designed to drive up value-added tax (VAT) for importers. And in March 2024, antidumping measures were extended to include imports from more competitively priced markets. A tariff of $25/m2 is now in place for solar modules imported from Vietnam, Malaysia, Thailand, Croatia, and Jordan.

If that wasn’t enough to discourage module imports, changes to VAT rules, in November 2023, have had a significant impact on the cost-per-Watt of foreign photovoltaics. Importers can no longer deduct the VAT that is generated through trade policy measures. The effect can be seen in a sample calculation provided by analyst PwC, which imagined a 530 MW module with a unit price of $0.11/W. It produces eye-watering results. Before Nov. 24, 2023, which brought the rule change, the total cost for that hypothetical module, after accounting for trade policy measures, was $110.30, equivalent to $0.21/W. Under the new VAT regime, the same model would come to $269, or $0.51/W.

Government action isn’t limited to keeping foreign modules out. There are many incentives in place aimed at supporting domestic module manufacturing. In summer 2023, a new 10-year feed-in tariff (FIT) of TRY 1.06 ($0.03)/kWh was introduced for PV systems installed between July 1, 2021, and Dec. 31, 2030. Projects that use PV modules made in Türkiye get even more support, benefiting from a further five-year FIT of TRY 0.288/kWh.

A government-backed Green Energy Loan program also eases access to finance while the country’s longstanding practice of designating “organized industrial zones” – areas that benefit from special tax treatment – helps to facilitate investment in all kinds of domestic manufacturing.

International ambition

Those are the market conditions, but where will they lead? Consolidation, most likely. Module manufacturing in Türkiye is mostly a module assembly business with a strong core of well-established operators, plus a long tail of new entrants. Only eight major companies have annual manufacturing capacity of more than 1 GW, according to PwC analysis, and as of February 2024, only one Turkish manufacturer produced solar ingots.

Kalyon PV is at the top of an ever-growing pile. It’s also the only domestic manufacturer producing its own ingots, wafers, and cells. The current annual manufacturing capacity at Kalyon is 2 GW for modules and solar cells. That figure is likely to grow, according to Kalyon, as the company reckons module production capacity could go as high as 10 GW in the next 10 years.

Between new installations in Türkiye and the company’s activity overseas, there will be enough demand to ­accommodate that growth, said a company spokesperson at SolarEX.

“We believe the Turkish market’s capacity will enlarge in line with our enlargement,” they said. “We believe, in the next 10 years Turkish investors [will] have the financial capacity, and we believe the market has enough capacity. Our main market will be in the United States, I believe. The reason why we try to sell there is our product is really [high] quality and we are one of two companies in Türkiye to get UL [Underwriters Laboratories] certification, allowing the products to be sold in the US market.”

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For large-scale Turkish manufacturers such as Kalyon PV, the United States is the land of opportunity. The Uyghur Forced Labor Prevention Act keeps competition from China at bay, while the incentives supporting green investment included in the US Inflation Reduction Act (IRA) present tantalizing opportunities.

“Our domestic product rate is 90%,” said the spokesperson. “We have a clean supply chain and we can prove it to [United States] investors, that’s why they are really interested in our products.”

Kalyon is not the only Turkish company with American ambitions. In April 2024, Elin Energy started producing solar modules at a site in Texas. The company has already secured agreements with US distributors and plans to increase production capacity to 2 GW within 18 months. It followed a similar announcement from Energate Solar in October 2023. Energate plans to ramp up module production in the United States and has also set a 2 GW target. The company said its plan was to produce 500 MW of gallium-doped monocrystalline passivated emitter, rear contact silicon panels and tunnel oxide passivated contact (TOPCon) panels in 2023, before expanding to 1 GW in 2024.

It’s clear that the United States has potential for Turkish module manufacturers. Competing in the European Union, however, remains challenging. There is no way to match Chinese modules on price.

Chinese influence

The big manufacturers are also hard to beat when it comes to technology. This was evident from the volume of equipment and raw material suppliers who made the trip from China to SolarEX 2024. One Chinese solar cell supplier told pv magazine the company decided to attend the show at the last minute, motivated by accelerating demand from module assemblers.

For equipment suppliers, Türkiye offers a potential lifeline in a challenging global market. Demand has dwindled due to the ongoing module oversupply situation in Europe. As manufacturers have put capacity expansion plans on hold, Chinese companies offering turnkey module assembly lines have been turning to Türkiye.

And despite the trade barriers, Chinese manufacturers are finding their way into the market by investing in domestic production. Astronergy – part of the Chinese CHINT Group conglomerate – recently announced a new factory in Adana, Türkiye. A company spokesperson confirmed to pv magazine that production is expected to begin at the site in the third quarter of 2024, with an official inauguration of the factory scheduled for the fourth quarter of 2024. The manufacturing facility is located within the Haci Sabanci organized industrial zone and is expected to employ 150 people in its first phase. The 22,000 m² site will produce its N5 and N7, negatively-doped, “n-type” TOPCon modules using solar cells sourced from other Astronergy sites with cell manufacturing capacity.

An Astronergy spokesperson said Türkiye “is a place with a lot of potential in solar energy, therefore, Astronergy’s high quality PV modules will start production in the Turkish market. This will be the first direct investment [in the country from a] top six, tier-1 PV module maker.”

What next?

There’s still more to come: more capacity and more capability. It may not be enough to support the volume of new market entrants assembling modules but the stage is set for continued solar installation growth with energy storage likely to play an increasing role as well. Türkiye’s National Energy Plan predicts that solar will account for 28% of total installed ­generation capacity in 2035 and energy storage systems will reach 7.5 GW of installed capacity by that date. The plan assumes installed solar capacity will increase by 3 GW per year to 2030, rising to 4 GW per year from 2030 to 2035.

The nation’s top module manufacturers also have plans in motion to increase their capability. In two or three years’ time, there could be four Turkish manufacturers producing solar cells, according to Mehmet Ozenbas, director at Strategy&, part of the PwC network. Ozenbas told pv magazine Smart Solar Technologies is expected to begin domestic solar cell production in 2024. The company also plans to produce its own wafers in the near future. Elin Energy brand Sirius and Schmid Penkintas are pursuing domestic cell and wafer production ambitions too.

Onshoring these key stages in the solar module supply chain looks like the next big step for PV manufacturing in Türkiye. The number of module assembly businesses in the market may have soared, but it will be those with their own supply chains who will be best placed to make waves on the world stage.

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