With more than 19 GW of capacity installed across more than 700 projects in 24 countries, Arctech Solar has become one of the world’s leading manufacturers of solar tracking and racking equipment. Cai Hao, the founder and board chairman of Arctech Solar, recently met with pv magazine to share the company’s shining success story as it celebrates its first decade in business.
At the turn of the millennium, Hao established his own steel business after a short stint working for a foreign company. First entering into steel parts and then structures, the entrepreneur actively pursued construction projects in Suzhou. However, his company struggled with frequent market instability and he began searching for a more steady business model.
By chance, Hao learned that solar PV projects relied heavily on steel for their supporting racking structures, and that the Chinese government was encouraging the growth and development of the PV industry at that time. Accordingly, he decided to initially enter the market as a supplier of solar racking equipment in 2009. His company, Arctech Solar, took off alongside the rapid development of China’s PV industry, and quickly became a major racking system supplier.
But Hao eventually started looking beyond module mounting systems as he sought to further expand his business. In 2013, he set his eyes on developing tracking systems, as he could see the potential for higher profits, despite the significant technology barriers. Arctech Solar’s international experience gave it insight into how tracker technology could be adopted outside of China, and Hao knew that PV investors around the globe would eventually start to expect higher power generation yields. After roughly five years in the tracker space, Arctech Solar now is the largest tracker supplier in China, and the fourth largest globally.
Throughout the rapid development of the company, Hao developed a conservative financial business model, while simultaneously investing heavily in research and development. Arctech Solar has continuously invested considerable portions of its revenue into R&D. But the company has avoided bringing products into the market too quickly, in favor of spending significant time on product testing. The company’s latest innovation is a building integrated system it developed in early 2017 to provide 12 MW of capacity on its own factory roof. After seeing it successfully withstand heavy rain, typhoons and snowstorms, Arctech Solar is now bringing the product to the global market.
Hao has also insisted on in-house production rather than outsourcing, which is the prevailing strategy of the racking industry. He says that this provides Arctech the ability to control quality, cost and the most important issue to a project: delivery time. Hao believes that this has served as a competitive advantage that has allowed Arctech Solar to beat out competitors who regularly struggle to meet project timelines.
Another way the company has remained competitive financially is its conservative approach to cooperation with its partners. In both China and overseas markets, Arctech works with strong and reputable investors and EPCs and strives to keep account receivables as low as possible. Hao says that the financial status of Arctech Solar is extremely sound due to this strategy, which has helped the company survive challenging times in the industry.
Arctech began its internationalization process in India in 2015, and then moved into Japan, the United Kingdom, Southeast Asia, the United States, Africa and the Middle East. The company is now expanding into Australia, Latin America and Southern Europe.
Arctech Solar breaks its global markets into three segments. Its core market is China, while its key markets are Southeast Asia, Latin America, the Middle East and Australia. It currently treats Europe as a reserve market. However, as time goes on, the company plans to have its reserve markets grow into key markets, where it will dedicate greater effort.
Hao practices a unique management style, which is a combination of Western business science and traditional Chinese philosophy. He praises the precision of Western management technology, but he also values the humanized measures rooted in ancient Chinese management skills. He believes that the perfect combination of the two is the dream solution to business leadership.
He says that in order to achieve the company’s vision to become the world’s top manufacturer of solar tracking and racking systems, Arctech Solar must lead by “creatively satisfying customer’s needs with diversified innovation.” He emphasizes that the company must differentiate itself from its competitors by satisfying customer current needs and creating new products or even new markets for its customers, in order keep the industry moving forward.
The company’s newly developed building integrated roof system offering is where he wants to lead innovation in the market. Based on the mass potential for BIPV in the future, Arctech Solar may have its next transformation – with a much larger market lying ahead – waiting for Hao and Arctech Solar to explore.