4th largest solar cell manufacturer makes play for 20% of industry

The Tongwei Group, the 4th largest solar cell manufacturers globally, have released a plan to expand their manufacturing capacity to 30GW/year of solar cells from its currently running and under construction 9.7GW of solar cell capacity. They plan to make high-efficiency monocrystalline cells.

This plan, if executed, would make Tongwei the largest solar cell manufacturer by far.

The company has put together proposals totalling US$1.8B to build two 10GW solar manufacturing plants (link to original company press release in Chinese). The proposal hedges when it says the plants will be brought online ‘as the market demands’ over the next 3-5 years.

The group had already proposed to bring their total company capacity to 20GW/year by the end of 2020 – this plan adds an extra 10GW factory to the mix. Tongwei has 5.4GW of manufacturing capacity currently, with 4.3GW of capacity under construction. JA Solar is the world’s largest solar cell manufacturer with 6.5GW of capacity. Tongwei’s website lists monocrystalline solar cells ranging in efficiency from 17 to almost 19%. The company also manufacturers silicon ingots – the material that solar cells are made of.

Tongwei’s announcements are mostly in addition to the many solar manufacturers who are gearing up for strong growth with 54GW of announced expansions over the next several years.

The company plans on building these plants similarly to their newly launched 2GW solar cell facility in Chengdu, Western China. This plant came online in September. The facility was built under the ‘Industry 4.0/Made in China 2025’ philosophy of maximizing technology automation and data analysis. Tongwei believes their 4.0 factories will greatly increase factory throughput – but also decrease costs as well:

Compared to conventional factories, the smart automated plant can reduce labor input by 40% and energy consumption by 30%, and hike production efficiency by 25%. The 40% labor force reduction refers to the decreased number of employees working at production lines.

Competitor JinkoSolar recently outlined some of the technologies it used as part of its 4.0 manufacturing processes when achieving its record-breaking solar cell efficiencies – “These include: robotic workstations, traceable QA capabilities, improved workflow efficiency, optimized material transportation, and advanced data analytics.“

Electrek’s Take

Globally, we’ve got between 120-140GW of viable solar manufacturing capacity. With 2017 final installation volumes expected to approach 100GW, that capacity is going to be 71-83% utilized. This manufacturing capacity will probably grow 10-32% over the next several years.

If the world has another 25%+ installation growth in 2018 like it did in 2016 and is happening in 2017 – we might start to see panel availability challenges in 2019, unless that 10-32% projected industry growth plus Tongwei really get their volume online fast. Manufacturers are dancing a fine line of upgrading capacity while not building too soon with hardware that will be obsolete. However, if individual companies are too cautious with their growth estimations – and their competition judges well, you’ve got years of playing catchup.

Tongwei is putting down a volume goal that could have them leading into the middle of the next decade. If anyone else in the industry decides to chase them, and we suddenly have two or three groups – each adding 10-20GW worth of factories – we could see annual global cell manufacturing capacity break 200GW real fast.

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