19 June 2012
German PV manufacturer Q-Cells, once the largest manufacturer of solar cells in the world, has seen difficult times this year with its preliminary insolvency announced in early April. At last week’s Intersolar Europe, Andreas Breyer, Senior Editor, Germany of Solar Novus Today (SNT), spoke with Thomas Raadts, Senior Vice President Marketing & Product Management of Q-Cells, about the current situation and the corporate strategy of Q-Cells, the paradigm shift in the industry away from FiT systems toward a levelised cost of electricity (LCOE), and the expectations that the company had for Intersolar Europe 2012.
SNT: Mr. Raadts, the slogan of Q-Cells is “Quality is the best warranty“. Are you afraid that Q-Cells soon will not be able to keep its warranty promises because its existence is in danger?
Thomas Raadts: First of all, we believe and can prove that our modules keep the promise we give. Against this background we say that quality is the best warranty, since the best warranty is the one the customers do not need because the product performs accordingly. This is why we play this card. So this slogan was invented before the preliminary insolvency; however, from our point of view it does fit into the current situation. In the current market situation the customer has no absolute guarantee that the company he buys from today will still exist tomorrow or even in a few years time. The long warranties have educated customers not to question quality anymore; as a consequence the industry is not talking about quality. So, if the current situation of the PV industry puts a focus on quality again, this is by far not bad news for us. Things don’t get easier right now, but being a quality manufacturer we have realized that we need to proactively approach our partners and in particular banks; this strategy helps a lot.
So customers and banks do not question the existence of Q-Cells?
Our customers clearly tell us that the PV industry needs us; that we are too well positioned to just vanish, and many of our partners appreciate that we do not hide our situation. I don’t say this is the most comfortable situation, but it certainly is not a business showstopper. And the upcoming paradigm shift away from ROI driven investments backed by FiT systems towards the levelised cost of electricity (LCOE) plays in our cards, as this new business ratio will directly reward financial effects of a proven longevity.
So you indicate that the PV industry is about to enter the next evolutionary stage. What is your vision, what are your expectations?
First of all, the energy turnaround or ‘Energiewende’ as we call it in Germany is not possible without PV. However, this should not be done completely uncontrolled, but rather after an evaluation where PV– and by this I mean geographically and the respective application – makes sense. The vision is quite simple: The end consumer will be able to control his energy costs much better than today through the solar energy he produces himself. Part of this is that supply and demand will be harmonized much better. The third argument is that PV as a decentralized energy source doesn’t need large investments in grid expansion. This, together with the potential of off-grid solutions in particular in the Sun Belt regions, will get the industry out of the dent caused by the paradigm shift from ROI to LCOE. This shift has always been foreseen, but due to the massive fall of prices it came much earlier than expected. However, bottom line, we are at a point where the PV industry needs to learn to walk without subsidies. Subsequently, my vision is that in a few years’ time, the PV system on the roof is as natural as the windows, the heating, and the door.
Do tracker systems become more important with the LCOE approach?
If you look to the United States, where tracker systems are already installed in PV fields, what counts there is not ROI but the dollar per kWh. LCOE of a static system are about 30% higher than of a tracking system, given that the tracking system is robust and doesn’t require high maintenance cost. We think with the paradigm shift tracker systems will sweep over to Europe as well.
In Spain, the first projects are now planned in the post-FiT era. Is that a sign that goes in the right direction?
Absolutely. In the Sun Belt this is already economically feasible; however, often grid infrastructure is a limiting factor. But the existing subsidies should be granted in a different way as well, e.g., to promote storage solutions in order to make these still high investments better to handle for end consumers in this early phase before economies of scale make them affordable.
But at the current prices for a storage system, the question is who will buy them. Are we going back to the idealists who started PV some 25 years ago?
Idealists will be amongst the early adopters, but I believe that idealism is common sense amongst the coming generation that grows up with the green idea. 10,000 to 20,000 Euros for an in-house storage system for sure is a lot of money, but if politics support this now, this can give a real push. Plus, together with the growing importance of E-mobility, scale effects in the battery segment can be expected as well.
What did you expect from the Intersolar Europe 2012 - and did the show meet your expectations?
First of all we wanted to show that we are here to stay. Secondly, we wanted to give answers to the multitude of questions and create transparency, but as well prove our customers our lasting motivation and ability to innovate new products, such as those we presented last week in Munich. And we wanted to further establish our evolution from a technology leader in cells toward a system supplier; a path we can only walk together with our customers. All these messages we send out support our slogan “quality is the best warranty”. And of course we wanted to do business, starting with Q3 and Q4 quantities. All these expectations have fully been met and we are very content with the Intersolar 2012.
Mr. Raadts, thank you for the interview.
Interviewed by Andreas Breyer, Senior Editor, Germany, Solar Novus Today