Positioning Solar Production for Global Export, Protected Markets

The recent announcement by Hanwha Q CELLS of plans to expand its Malaysia solar panel capacity by 800 MW may be an indication that other panel makers will isolate their production in China for domestic consumption, while establishing new capacity in trade-neutral zones for global export.

The move also may foretell a trend toward the establishment of more capacity where local content is an issue.

“By manufacturing cells and modules in Malaysia provides them with direct access to the U.S. market without any trade case questions asked,” observes Finlay Colville, the vice president of NPD SolarBuzz, in London. “Hanwha’s flagship in terms of excellence is the Q CELLS side, while the SolarOne operation can supply the domestic Chinese market,” he explains.

Seong Joo Ryu, the managing director of Hanwha Q CELLS Malaysia said at the time of the announcement, ”Hanwha Q CELLS Malaysia is ready to become the company‘s main hub for the sustainable mass production of high quality solar cells and modules at competitive costs.” The company also touted its combination of “German engineering” with “international production.” The Malaysian location selection also will provide production cycle time and logistics savings from the combining of cell and module manufacturing at one production site, the company adds.

Similarly, China’s Comtec recently announced plans to add 300 MW of wafer production in Malaysia, aimed largely at the U.S. market.

Moving some solar manufacturing capacity into new target countries is also a rising need in many emerging solar markets. “In a number of new markets in Latin America, the Mid-East and in Africa, there is a tendency with government-backed initiatives to have something in place related to domestic content, so to win big tenders and auctions in the region, it clearly helps if you have manufacturing locally,” says Colville.

“This was seen in South Africa with the first few tender runs, where there was a strong focus on employing people locally to assemble panels,” he notes. “Most of the local plants are just assembling modules, not making cells; it is designed just to get a foothold in the market,” he says. Among the latest in-country plant moves is a plan by Solar Cluster, the southwestern German industry association, to establish a manufacturing plant in Brazil.

Malaysia itself has ambitious plans for solar power development, with a target for its installed solar base of 220 MW by 2020. In June, Frost & Sullivan reported that, “As per the Tenth Malaysia Plan, the country aims to account 5.5 percent or 985 MW of the total generating capacity through renewables by 2015, and 11.0 percent by 2020. Along with this, the country is also aiming to reduce carbon footprint to 40.0 percent below 2005 levels by 2020. To achieve these goals, the country introduced…a feed-in tariff policy in 2011.”

Hanwha Q CELLS expects construction of the module production facility at the Cyberjaya site to start in early 2015, and the four new production lines are expected to be online for testing in Q3 2015, with full production slated for early 2016. 

Lead image: Solar panels via Shutterstock

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Charles W. Thurston is a journalist who specializes in renewable energy, from finance to technological processes. He has been active in the industry for over 25 years, living and working in locations ranging from Brazil to Papua New Guinea.

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