Belectric-Solar Frontier JV in pole position in the Middle East, Japan

The complementary business networks and geographical strengths of Germany’s Belectric and Japan’s Solar Frontier will make their new joint venture, CISystems, uniquely competitive in emerging solar hotspots, says Wolfgang Lange, managing director of Solar Frontier Europe.

Unveiled this week, the joint venture will be headquartered near Munich – but Germany is “only the starting point”.

More than 70% of its project pipeline lies outside of Germany, and Lange tells Recharge that the new company intends to establish a large presence in Japan, Saudi Arabia, Israel, South Africa and other key emerging solar markets.

Owned by Japanese hydrocarbon company Showa Shell, Solar Frontier is the world’s largest maker of thin-film PV modules based on copper, indium, selenium (CIS) technology – having last year opened a 900MW factory in Japan.

Belectric has been the world’s largest solar engineering, procurement and construction (EPC) contractor for two years running. It installed 391MW last year across 62 PV installations, putting it ahead of EPC rivals like SunEdison, Q-Cells, First Solar and Juwi.

The focus of CISystems will be “predominately large ground-mounted projects, but also some rooftop”, selling turnkey power plants via special-purpose vehicles or other contractual arrangements, Lange says.

The joint venture’s board members will be split evenly between its two parent companies, including Lange and Belectric chief executive Bernhard Beck.

Several factors make the two companies a good fit for a joint venture, Lange says.

For starters both are extremely focused on technology, with Belectric holding more than 70 patents related to the balance-of-system components it makes in-house, and Solar Frontier recently achieving an efficiency of 17.8% for a substrate measuring 30cm sq – a world record for CIS.

In addition to making it simplier to integrate their technologies, the joint venture will also simplify things for bankers and investors – critical at a time of tight credit.

The complementary geographies of Belectric and Solar Frontier also give a huge edge to CISystems. Module makers are moving into project development en masse in the hope of diversifying their revenue streams.

Known as Showa Shell Solar until 2010, Solar Frontier has a strong position in Japan. Lange says the company aims to carve out a 25% share in its home country, which he expects to quickly grow to a 2GW a year market after the introduction of a feed-in tariff later this year.

And Showa Shell itself is owned in part by Saudi Aramco, which gives Solar Frontier an inside track on the rapidly emerging Middle Eastern solar market.

“We’re able to maintain relationships in Japan and Saudi Arabia that might be more difficult for other companies,” Lange says.

“And Belectric is obviously very strong in Western and Eastern Europe, and has a subsidiary in the US,” he says. “So it’s easy to see how we’ll both contribute to the pipeline in the future.”

The supply deal Solar Frontier signed last year with Belectric represented a critical vote of confidence in the company and its technology, and has greatly benefited its broader acceptance with developers and investors, Lange acknowledges.