ReneSola’s Technologyand Market Strategy to Make the Company a Major Force in 2013

Renesola, until recently considered to be aleader in wafer manufacturing, has broken into the category of module maker,with the same zeal for innovation and high quality manifested in wafertechnologies.  The company has beenactively marketing its high-efficiency Virtus modules built on its Virtus I andVirtus II quasi-mono and multicrystalline wafers.

Joining us in exploring those developmentsis Mr. Brian Armentrout, MarketingDirector for ReneSola Americas.

SPVI: We understand thatquasi-mono wafer Virtus I has a number of qualities that exceed the characteristicsofwhatwas, up to this point, considered high-efficiency mono wafer, particularlyhaving low LID and oxidization and, of course,processing cost. Can you describethe particular cost savings?  Virtus IIor AA+ has been referred to as multicrystalline wafer; what is the differencebetween Virtus I and II, as the process of manufacturing seems the same to the untrainedeye?

BA:VirtusII technology, the latest and most advanced wafer growing technology nowavailable from Renesola, further boosts average module output to the 250-260Wrange from the 235-245W range, resulting in a 15-watt output improvement, butwith identical production cost as Virtus I technology. Meanwhile, it maintainsexcellent benefits common in multi-crystalline modules, such as lower LID, betterCTM loss and good thermal coefficient, compared to that of mono-crystallinemodules. Through proprietary processes, ReneSolamanufactures its modules, specifically the Virtus II, using less energy andcreating less waste,resulting directly in lower all-in costs.  We pass the savings on to our customers inthe form of more competitive pricing on ReneSolamodules. Overall, Virtus wafersoffer more power output and better efficiencies for a lower price.

SPVI: Virtus II has the same costas the Virtus I;can you describe in general terms how this is accomplished? Howdo you seek to retain an advantage with your solar modules, withbothwafers being sold to customers? Is there a difference between Virtus modules comparedtoclients using your wafers in their modules?

BA:Because of the use of different seeding duringingot growth, low-cost multi-crystalline seeds within Virtus II provide analternative solution to reduce the production cost.  The Virtus wafer is most commonly used inmodules manufactured by ReneSola. Our existing wafer and module linesmanufacture 1.8GW/yr and 1.2GW/yr, respectively.  In the coming years, we will add more modulepartners outside of China to accommodate local content requirements in certainmarkets.  A majority of our wafers willbe used internally on our own module manufacturing lines.

SPVI: Can you please comment onthe cell technology, when using Virtus wafers?What type of cell processing isrequired for either wafer (Virtus I and II)?  Based on our past interviews, the quasi-monoproduct requires Alkali texturing as opposed to acid, which is considered the conventionalmethod.Are there further opportunities to enhance power output through cell processingor wafer, and what is the road map for this technology? Considering levies inthe US and investigation in the EU,would you consider expansion in cellcapacity, for example to gain proprietary advantage,or perhapswith locationsoutside of China to mute any EU protectionism?

BA:Based onour experience, Alkali texturing provides better light trapping on mono andquasi-mono wafers (Virtus I), thus collecting more sunlight during operation; however,this is only the first step of the technology improvement process resulting inmono-rich wafers. Back-side passivation or front-side selective-emitter arealso two substantially feasible ways for us to increase the efficiency ofmono-crystalline cell. Within the two major technologies, the cell efficiencyof quasi-mono wafers is improved early in the process.  With wafer technology, reducing theconcentration of impurity and defects from bulk ingot are always key in theenhancement of cell efficiencies.  Meanwhile, cost control during the unveilingof new technology will determine which technology will be realized in massproduction.

In order to secure the long-termrelationships with customers in the EU and the US, we are working very closelywith our manufacturing partners outside of China. We will work collectivelywith those partners in using our celland wafer capacity to continuously enhanceVirtus wafer efficiencies.

SPVI: Can you tell us what thedifference is between Black Mono and Square Mono and what makes the differencein their efficiencies? Are they both produced from large rods through the Czochralski process?

BA:Blackmono modules are essentially square mono cells combined with a black back sheetto fulfill appearance requests from architectural design firms and homeowner’sassociation requirements.  The moduleefficiency range is 15.4% to 16%. Square mono modules are manufactured withsquare mono cells, resulting in greater module efficiencies in excess of 16%,which is beneficial particularly on rooftops where available space is at apremium.  Both products are suitable for theresidential market, but only square mono cells are produced by large rods.

SPVI: Can you explain your currentwafer capacityby breaking it down into thecategoriesof mono, quasi, multi usingMW, and how flexible is it to execute a change in the shift from one categoryto another? Is there any reason why would you remain with multicrystallinewafer production at all, in light of Virtus II results?

BA:Mono waferà 400MW

Quasi-mono wafer (Multi-crystalline wafer)à 1.8GW àcan be switched to Virtus I(mono-like) or Virtus II (poly) flexibly.

SPVI:  Do you see any benefits for you from potential levies on the US andSouth Korean polysilicon producers importing to China?  China DOC has now added the EU producers to theinvestigation;ReneSola was not named as the petitioner in the initial filling,why?

BA:We couldpotentially see some benefits for ourselves from potential levies on US andSouth Korean polysilicon producers, as we have our own internal source ofpolysilicon capacity, which is increasing.  But we are opposed torestrictions to free trade from any side.  We are not a petitioner, as westill buy some polysilicon from overseas, and we actively try not to getinvolved in such disputes.  And as mentioned, we are opposed torestrictions to free trade from any side.

SPVI: Consolidation in China.  There are at least 400 companies stilloperating in China alone, not including US-listed Chinese companies.  This is a large amount of capacity. How doyou see this play out,as everyone sees the necessity of eliminating capacity asa major – if not the only – factor required for the solar industry to thrive?

BA:2013 is going to be a big year for Chinese module manufacturersselling modules in the US.  Many of thosecompanies who have appeared to have thrived through 2012 are nowsuffering.  Many of them beefed up theiraccounts receivables lines by giving lines of credit to anyone and everyone,many of whom never paid their bills. Those companies have a tremendous amount of long-termdebt due in 2013,which will give entirely new meanings to the terms “bankability” and “tier 1.”  Fortunately, we avoided this and do not havethat debt load, and feel we couldn’t have entered the US market at a moreopportune time.  We are extremely carefulwhen giving credit terms to customers and as one of the world’s largestsuppliers of wafers, we’re extremely confident we’ll be among the few remainingPV manufacturers. 

Financially,we’re very strong and stable.  This year, we’ve operated at 100% capacityutilization and have hired more than 1,000 people.  We have strong supportand backing for this.  Balance sheet-wise, if you look carefully at afinancial analysis (which we run every quarter) – we’re about middle of thepack.   If you look at, say, Debt to Equity, we’re at about 1.6, which ismiddle of the pack.  In terms of, say, interest coverage or income-statement-to-balance-sheetratios, we, like pretty much everyone else, are generating limited income andcash flows so the ratios will not come out favorably – which is in line witheveryone else.  ReneSola is better than others at operating in acompetitive, low-cost environment.  Unlike our peers, we do not sponsorEuropean football teams, hockey teams, the World Cup, or hang out with PatrickDempsey on the F-1 racetrack.  We’re much more frugal, and therefore arebetter positioned, both cost-wise and culturally as a company to weatherthrough the current difficult conditions.

SPVI: You seem to have a strategyto avoid the US levies, perhaps using your long-term relationships in Taiwan.Howwill you adjust to the EU outcome, ifthis investigation is after all valuechain products?

BA:ReneSola only has 240MW of cell capacity in China, so we are notsubject to the tariffs.  We are primarilya wafer and module company with strong relationships with Taiwanese cellproducers. 

SPVI: Thank you very much for theopportunity to speak to you today Mr. Armentrout

BA:It’s been my pleasure.  Thankyou very much for the opportunity.

This interview was conducted by RobertDydo, and edited by Senior Editor of SolarPVInvestor, Stephanie Pierce.