SolarOne to add 500MW of capacity
In a bid to break into the industry’s top tier, Hanwha SolarOne will by the end of the year lift its module capacity by 500MW to 2GW, despite failing to return to profitability in the first quarter of 2014.
The Chinese module supplier, long on the cusp of the industry’s upper echelon, will also add 200MW of cell capacity – bringing its total to 1.5GW – while apparently holding its ingot and wafer capacity at 800MW.
Hanwha SolarOne, the world's eighth largest module supplier last year, on Wednesday blamed its failure to return to profitability in the first quarter on its poor showing in the Chinese PV market.
Having swallowed losses totalling 3.36bn yuan ($540m) during the 2011-2013 period, SolarOne lost another $21.5m during the first quarter of 2014 – significantly worse than its result in the final quarter of 2013.
Many of SolarOne’s larger Chinese rivals returned to profitability last year.
SolarOne's shipments fell 8% quarter-on-quarter to 323.6MW, while posting declines in a range of other key performance metrics– including revenues (down 12% to $183.1m) and gross margin (down 20 basis points to 13.9%).
Meanwhile, the average number of days that the company sits atop inventory before selling it rose significantly, to 70 days from 63.
In his first earnings report at the helm of the company, Seong-Woo Nam, the Samsung Electronics veteran brought in several weeks ago to replace the outgoing Ki-Joon Hong, placed heavy blame at the doorstep of the Chinese market.
“Our … results were primarily impacted by a slowdown in demand in China due to seasonality and delayed project installation,” says Nam.
The company also felt the impact of a devalued renminbi, which has slid 3% or so against the dollar in 2014 and may continue to fall – a concern for Chinese PV companies.
China will likely install somewhere between 2-4GW of PV capacity during the first half of 2014, against a full-year nationwide target of 14GW.
Many potential SolarOne customers in China held off on buying decisions in anticipation of higher incentives coming into play in what is expected to be an explosive second half of the year, when demand is expected to skew far more strongly towards rooftops than it ever has in China.
In recent months SolarOne has unveiled a number of strategic co-operation agreements in China, none of which has yet fully come to fruition.
Japan accounted for a striking 51% of SolarOne’s module revenues during the first quarter, up from 44% in Q4 2013. The UK accounted for another 22%, as developers there raced to lock in projects ahead of cuts to the Renewable Obligation Certificate scheme.
That combination – Japan and the UK – will have been integral to many higher-tier Asian suppliers during the first quarter of the year.
Nam highlighted the ongoing importance of a closer integration with Germany’s Q CELLS, although no major moves in that direction were announced. Both Q CELLS and SolarOne are part of Korea’s Hanwha Group.
SolarOne already performs a significant amount of module-processing for Q CELLS – the latter being a highly respected brand in many Western markets – and the two will continue to “exchange technology, share manufacturing expertise [and] integrate supply chains”, the company says.
SolarOne has guided for 1.5-1.6GW of shipments in 2014, and Nam says that one of the company’s primary goals is to achieve a Tier One position within the global PV sector within two years.