Newsletter Dec 2015 – Solar module industry growth

Industry Overview and Competitive Landscape

Solar module industry growth

As reported in our last newsletter, the solar module industry continued to demonstrate growth and
clocked in another phenomenal sequential quarterly performance in terms of quantities shipped.
Notwithstanding, a negative sentiment about the industry given the looming expiration of the ITC at the
end of next year, continues to keep stock prices depressed.

As we cited previously the ASPs have remained relatively flat with very little downward pressure on
pricing. This dynamic is requiring all module manufacturers to continue with their cost cutting efforts to
either maintain or increase gross margin. We believe that expanding gross margin would be harder to
achieve than not for two principal reasons: (i) in general wafer prices have been on the uptick. This
increase in wafer prices (raw material for solar cells) coupled with the increase in demand for tariff free
cells together are suggesting an increase in cell prices in Q2/16.

There is no cell capacity available for Q1/16 for unforeseen demand for modules in the same period.
Collectively, these various moving parts lead generally to an environment of little movement in module
prices – manufacturers can only reduce prices if they opt to reduce their gross margins – a luxury they
can ill afford as investors value companies on the basis of earnings and all these companies have
significant debt coverage obligations.


The table depicts results for a select grouping of the industry players3.


The above findings are consistent with what we reported in our last newsletter – several manufacturers are sold out. Sales as a percentage of production capacity remain equally strong for the current quarter and well into 2016. The outlook for all module producers for 2016 appears quite healthy with >50% of the effective capacity booked with fixed contracts at minimal ASP declines.

Key Takeaways

  • Outlook for 2016 looks healthy
  • >50% of 2016 production capacity contracted
  • ASPs remain relatively constant
  • Wafer prices expected to increase in Q1/16, thereby cell price may see an upward trend
  • Tariff free cell production increase will not support U.S. demand to negatively affect module prices
  • Most module companies have to focus on cost reductions to sustain gross margin beyond ITC in the
  • U.S. and find higher demand markets to sustain sales of increasing production capacity
  • Customers must remain vigilant about module supply

3 All company data compiled from quarterly SEC filings


In addition to the various product launches and line extensions we described in our previous newsletter, we at Centrosolar have also been busy with furthering our competitiveness in the industry. We, along with our lead OEM partner have committed to various initiatives, many of which are set to launch in January 2016.

Firstly, our 340 MWp solar cell manufacturing facility is coming on-line in January 2016 in Malaysia to further our tariff free cell availability for the U.S. market. At this plant, we will be focusing on manufacturing monocrystalline solar cells. Approximately fifty (50%) percent of the capacity will be focused on conventional mono cells and the balance on PERC cells. The former will enable us to manufacture up to 320 watt modules (72-cell format). Using the latter technology, we will be able to supply up to 350 watt modules on a 72-cell format.

In addition to the Malaysia plant for cells, we have entered into reciprocal relationships with other leading cell suppliers for polycrystalline solar cells in Malaysia and South Korea. As such, we can ensure supply in significant quantities of both mono and poly modules to our customers.

As part of our competitive response to current industry conditions, a 600 MWp module production facility in Vietnam is coming on-line in January 2016 as well. These initiatives collectively increase our tariff free product capacity to about one (1) GWp for the U.S. market.

Our C-Series will be manufactured in Taiwan and Vietnam using cells made in Malaysia and South Korea.
A summary of salient attributes of the enhanced C-Series is as follows:

Multicrystalline Modules

  • Black frame and white back sheet (60-cell) – power range of 260 to 265 watt
  • Silver frame and white back sheet (72-cell) power range of 280 to 320
  • High quality and high efficiency
  • Production capacity available to satisfy all demand

Monocrystalline Modules

  • All black cell, frame and back sheet (60-cell) – power range 275 to 300 watt
  • Silver frame and white back sheet (72-cell) – power range 290 to 350 watt
  • High quality and high efficiency
  • Production capacity available to satisfy all demand

The tariff free solutions plus the low cost venues of manufacture enable us to continue maintaining our price competiveness without compromising quality. Our lead times hold at 8-weeks but given the demand, we are expecting them to increase slightly into Q2/16 and beyond.

Starting Q1/16, the mono line up would be priced at or nominally above our poly line up. This would serve as yet another Centrosolar’s contribution to our customers.
We highly recommend entering into detailed discussions with us for your module requirements so that, we can plan our production scheduling to ensure on-time and continuous product availability.


As our offerings continue to expand, we have been adding additional skills to our team. We continue to attract talent across the organization with our recent addition to our senior team.

Terry Sholin – Terry joins us as Director of Sales. Terry brings 35 years of experience in the power generation and power conversion with 12 years of that in solar in both technical and business development roles. Most recently, he was at ET Solar, Inc., where he was responsible for their successful entry into the US market. Prior to ET, Terry was involved with commercial PV inverter development and sales at both PV Powered and Satcon.

We are continuing to search for talent in the areas of sales, marketing, project management and account management. We welcome all referrals for highly qualified individuals who share in our
commitment to quality, innovative product and service offerings, high levels of customer service and dedication to improve the overall solar experience.


Centrosolar’s all U.S. made, B-Series were selected as one of Top 25 products by Solar World Power

For more information, please email us at or call (646) 942.7488
Centrosolar America, Inc.
8350 East Evans Road, Ste. E-1
Scottsdale, AZ 85260

i Capacity for global demand that includes the U.S. market. A portion of the total production capacity is tariff free. All else, if imported into the U.S. would be subject to CVD and ADT
ii Enterprise value for publicly listed companies is calculated as the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents
iii Market Capitalization for publicly listed companies is calculated by multiplying a company’s shares outstanding by the current market price of one share
iv Planned module manufacturing capacity at the end of 2016
v Planned module manufacturing capacity at the end of 2016
vi Includes product manufactured at third party facilities

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