Tracking the global PV market

PV investors are pursuing lower energy costs for their PV projects – how does racking play into this?

Even though every company would tend to overrate the importance of its own product within a complicated system, the module mounting system is particularly important to a PV project. Sometimes the mounting system not only contributes to the profitability but actually determines the feasibility of the project – it is a matter of “to be or not to be.” Our experienced pre-sales service team can provide customers with the best solution possible. However, sometimes bidding can be meaningless, and when our careful calculations show that profitability is not guaranteed, we recommend to not move forward with that project.

Arctech Solar has expanded outside of China over the past several years. Can you talk more about the internationalization of the company?

In 2015, we started our overseas business at a large scale in India. At that time, we had just a few people doing international marketing for the company. We had identified India as an opportunity, and put the majority of our bets into developing that specific market – and India’s market boomed during that period. In 2015, we received orders for more than 600 MW of racking, and in 2016 we had more than 700 MW of tracker orders. Meanwhile, we began to explore additional markets such as the United States, Japan, Southeast Asia, Australia and Latin America while our business was growing in India. And eventually we yielded our gains in 2018 – because of our early preparations in these other booming markets.

What is your global outlook on other major markets for the company and how did Arctech expand in these markets?

Since 2018, Mexico, Australia and Vietnam have become our major markets due to their quick development in the PV sector. Taking Mexico as an example, we launched into the market in Q1 2017. Within around six months, we had formed our local sales team, and participated in several local PV conferences. We found the Mexican market is highly connected with the Spanish market, and many investors and EPCs came from Spain and other European countries. Soon after, we quickly set up our branch in Spain to support our business in Mexico, which worked well.

Are there global markets where trackers have been more heavily adopted than others?

Several years ago, we saw that there are different preferences across countries. In China, even with a compelling case for trackers, our customers would choose racking. However, in the U.S., even without a sales proposition, most customers would choose tracker systems. Later, we found that in Australia, Southern Europe, the Middle East and even Africa, most customers prefer trackers. But of course, there are exceptions. For example, the largest built PV project in the Middle East, 1.17 GW, used fixed tilt racking rather than trackers.

What are the determining factors for customers to decide to choose racking or trackers for their systems?

Land limitations of a project greatly influence the ROI model, and sometimes using racking will generate a higher ROI than using a tracker. Actually, this is why the Indian market went back to being a rack market in late 2017. Racking systems can load more PV than a tracker system on land with limited area.

Only by comprehensive calculation can we tell our customer which system is better for a particular PV project. Choosing racking or tracking depends on multiple factors. This is why the module mounting system is a crucial part of the entire PV project. Sometimes the situation is very complicated, so we have a large, experienced pre-sales service team to help our customers find the best solution.

There are several manufacturers in the market, so what differentiates Arctech Solar from its main competitors?

I think the most powerful competitive advantage of Arctech is our production capabilities. We hold our own production lines for all of our products, rather than the common prevailing mode of outsourcing. Based on this unique characteristic, we can control the most important factor in a PV project: providing the best lead time to meet customers’ timelines. In a typical PV project, the rack or tracker system is usually decided very late but is required to arrive on site first, ahead of other components. Mounting system suppliers have a very short delivery time allotted, and we can do it very well because we control our production.

Being based in China, which has very low steel costs – and with steel being the major material of our products – we have a cost advantage.

And lastly, Arctech has a comprehensive product mix, so we are capable of meeting and fulfilling all kinds of technical requirements. No matter where the project is, no matter the terrain, no matter the project bidding requirements or different local concerns – we always have an appropriate solution for our customer to deploy.

The 5/31 policy of 2018 greatly influenced the PV industry. How did Arctech Solar respond to the resulting fluctuation of the market?

We have had almost no negative impact from 5/31 in the last year. The company recorded a 30% sales increase in our domestic market. We treat the China market as our home market and always put our main focus on it. However, we control our sales and concentrate on “good” projects.

What do you believe are the next market trends for racking and trackers?

Since the module mounting system is an essential part of any solar project, there will be continuous growth along with the development of the PV market. With declining PV subsidies, grid parity projects are more and more popular. Additional attention needs to be paid to power generation and project performance by investors and this will drive trackers’ popularity and utilization. Furthermore, we believe the BIPV market is going to move forward quickly – and we are preparing for this.