PV Magazine: When did LONGi enter into the Japanese PV market? And how did LONGi explore this market?
LONGi: As the largest mono-silicon products supplier in the world, LONG sees Japan as a key market. The Japan branch of LONGi was set up in May, 2016. We did a lot of preparations at beginning stage and our first project in Japan started two years ago. We have now 15 Japanese employees working here and we plan to double that in 2019 because our business with our Japan customers will expand quickly along with LONGi’s activities.
PV Magazine: What are the advantages of LONGi in Japan market? And what were the business achievements of LONGi Japan so far?
LONGi: LONGi is the only company that is dedicated to mono-silicon development and production – we have been doing this since the company was founded 19 years ago. We have very strong capability of providing high-efficiency mono-silicon wafer and modules with technical advantages. LONGi production is 100% in mono PERC products with over 12 GW capacity in 2019. As a technology driven company, the group invested over 5% of total revenue in our R&D from mono-silicon wafer to module every year, the highest in the industry Over 500 scientists are working in LONGi now and we are continuously pushing the conversion efficiencies to a higher levels, in both mono PERC cell and module. As recently as January this year, we achieved a new record of mono PERC cell efficiency of over 24%. In 2018, LONGi delivered about 200MW module in Japan, and we aim to double that in 2019.
PV Magazine: Japan is cutting FIT to PV solar and as a consequence, the market is declining. So what are the challenges for a China PV company in Japan?
LONGi: Yes, you are right. Japan’s FIT for PV solar is declining. However, the decline is slow and measured. A very good reference would be China. For example, in 2019 the FIT for residential power plants was reduced by only Y2 per kWh, and Y4 per kWh for utility scale PV power. For those large projects of 500 KW to 750 MW, are based on bided pricing. So the decline in FIT is not such a serious problem. To respond to the challenge of lower cost, LONGi continuously concentrates in providing high-efficiency, high-output and lower LCOE products, with mono-silicon, mono PERC and the latest half-cut bifacial mono PERC technology. Our Hi-MO 3 module released in 2018 can greatly reduce the LCOE of PV solar project in Japan.
Concurrently, LONGi is financially prudent, ranking No.2 in BNEF Module Manufacturer Financial Health Rating Index in 2018 among all module manufacturers worldwide and was is listed a TIER 1 PV module supplier. With the strong financial situation and sustainable business capability, LONGi’s module shipments grew continuously the past few years. In 2018, LONGi ranked No. 4 in module shipments of all manufacturers worldwide.
LONGi modules distributed in China, USA, Europe, India, Australia and South America. In Japan, because of late entry, LONGi still lacks experience in large ground-mounted PV project which may cause unfamiliarity of the LONGi brand for financing amongst Japan banks. Over time, the quality of our products and the company’s financial stability will gain recognition in Japan. With open communications with local financial institutions including banks, we believe our products will be accepted widely by local customers and increase LONGi’s module shipments in Japan.
PV Magazine: How does LONGi view the Japan market? What are the distinguishing features of this market?
LONGi: Generally speaking, Japan has a mature and high-end PV solar market that demands high quality, high efficiency and strong technical service. According to a report from RTS, the estimated PV installation of 2019 will be 5.5 to 7 GW. Japan is now a strategic market to LONGi. We have proven and mature business solutions to different kinds of projects including 10KW-50KW, 50kw-500KW and above 500KW, with high-efficiency, high output and high reliability products and good service for our Japanese customers.
With the declining PV subsidy, profit margin will decrease. We believe the industrial division will go deeper and only “Focus will Generate Profit”. Generally speaking, local Japanese manufacturers will participate more in system integration, operation maintenance and power transaction which are higher margins sectors. Foreign companies will shift focusing from large utility project to smaller and mid-sized projects. There will be more local OEM projects for local players. In general, in the future, the market will require lower system cost, higher power generation and products and business solutions with lower LCOE.
PV Magazine: So how is the price level of LONGi’s products selling in Japan, compared with those in China?
LONGi: Prices of modules increased a little since end of 2018, driven by insufficient production capacity of high-efficiency products and the postponed production increase of some top-tier module manufacturers. We estimate a stable price level in H1 2019. In China, the high-efficiency mono commands a price premium which is higher than in overseas markets, As yet, we see no drivers towards a price reduction in 2019. As for specific project price, we have no comments because it would be very complicated to calculate this price due to so many influential factors.
PV Magazine: LONGi launched half-cut bifacial module in 2018 which provided lower LCOE. What is LONGi’s plan for your next generation module?
LONGi: Lower LCOE is the continuous pursuit of LONGi, and bifacial technology is a realistic route. LONGi’s module products are accepted widely since our first generation Hi-MO1 module was launched in 2017, and in 2018 achieved rapid growth in module shipment. LONGi believes that there is still potential in increasing conversion rate of bifacial modules and has maintained investment in this area. Besides, LONGi also believes the potential of PERC technology and we will introduce an new generation product in H1-2019, which will have high-power, high-efficiency, and high output.. For now, we can say that this will be on market soon.
PV Magazine: From the outdoor testing report by PV Magazine, LONGi’s mono products did quite well among all modules, especially the bifacial module, how do you see the market of bifacial module?
LONGi: Yes, we are very proud of the excellent performance of our mono PERC product, especially the bifacial module, which ranked NO. 1 among all the modules in PV Magazine independent outdoor tests. It is a very good example of how the bifacial technology could help in the conversion rate of module and, we believe potential remains. We are very optimistic about the market of bifacial modules because bifacial tech could effectively reduce the LCOE. We are keeping communications with investors, banks, end users about the main characteristics of bifacial modules. We are planning a whitepaper about this product and will publish in this March globally to share our latest information and technology with our partners.
PV Magazine: How do you see the residential market of Japan? What is the module shipment in this area? And how LONGi plans to develop in this market?
LONGi: The residential market of Japan is growing and demonstrates the same features of other countries. First of all, it requires high quality, high efficiency products. Secondly, mono is more popular than multi. And residential owners are looking to the IRR for faster return on investment, in decision making. LONGi is developing the business in this sector. However, due to the complicated channels in Japan, we currently do not have data about LONGi shipments into the residential market in Japan. We estimate it to be about 5-10%, of total shipment. LONGi will keep our eyes on this market and provide a wider portfolio for the residential sector