Renesola rides outsourcing train

China’s Renesola was the top module supplier to Europe, Australia and India during the past year, highlighting the success of its strategy of aggressively outsourcing its module production.

While many large Chinese PV manufacturers are known to be contemplating overseas production, and some, like JA Solar, have already taken the plunge, fully half of Renesola’s module manufacturing is now done through OEM partners, according to market researcher NPD Solarbuzz.

In a strange quirk of international trade policy, the move by US authorities to shut out Taiwanese cell makers has actually made Renesola significantly more competitive in Europe, by driving down the cost of Taiwanese cells.

Renesolar chief financial officer Daniel Lee recently noted that Taiwanese cells that had been selling for around $0.41/W are now selling for as low as $0.33/W. “We’ve been fully benefiting from this by using these lower-priced cells for [the] European market," Lee says.

Renesola modules are now produced at 11 factories in seven countries around the world. Renesola shipped modules totaling 1,020MW during the first half of the year, making it one of the world’s six largest suppliers, all of them Chinese, according to Solarbuzz.

Of that output, 31.4% – or about 320MW – went to Europe.

Renesola is currently capable of shipping 25MW per month – or 300MW per year – into the US, claims chief executive Xianshou Li. The company aims to increase that figure to 500MW in 2015.

During the first quarter of 2014, Renesola's in-house module processing costs were around $0.53/W, and around $0.63/W for its OEM partners. Nevertheless, Renesola intends for its in-house capacity to become “smaller and smaller” as time goes on, and Li says the company and “will not” expand its internal capacity.

Based near Shanghai, Renesola returned to a modest profit of $800,000 in the most recent quarter on revenues of $387.1m.

In spite of the growth in solar trade barriers around the world, China's tier-one module suppliers continue to grow their shipments. Shipments from leading Chinese companies grew 26% sequentially in the second quarter.

“This growth comes at a time when trade disputes are creating obstacles for Chinese solar suppliers, which suggests that strategies to address the regional markets are being successfully implemented,” says Solarbuzz senior analyst Ray Lian.