Industry Overview and Competitive Landscape
The domestic solar industry
The domestic solar industry has been witnessing significant growth with the biggest YOY and QOQ growth realized in the residential and non-residential segments. The residential market grew 57% in Q2/15 compared to Q2/14. Across the industry, the residential segment is expected to demonstrate the fastest growth rates in Q4/15 and during FY16. Such growth is attributable to the abundance of low cost capital from multiple lenders, leasing companies and PPA offerings, as well as the expiration of the Federal personal tax credit and reduction of the commercial ITC to 10% after 2016. The large scale commercial and utility segments are also demonstrating significant growth.
The health of the various equipment suppliers is continuing to increase as well. The recent growth has allowed for ASPs to stay relatively flat, increased demand has exhausted leading suppliers capacities and production efficiencies are adding to expansion of gross margin of module companies. This is all good news for the industry. Despite this favorable environment, companies such as, Renesola have had to change their strategy vis-à-vis the U.S. market. They are now entirely focused on developing a downstream strategy by developing projects. Yingli seems to be challenged by their corporate debt load thereby creating doubt about their future.
Most of the leading producers are sold out through the end of FY15 and several of them are sold out well into FY16. Industry sources suggest that companies, such as, Solarworld are sold out through end of Q4/16 and Trina Solar through end of Q3/16. A particular pain point is being witnessed by developers seeking 72-cell format modules. There is significant shortage of supply in the marketplace.
To keep pace with our current growth and in preparation for the sequential growth over the next 5-quarters, we have added significant production capacity. At present, alongside our OEM partners, we have a ~4 GWp per annum production capacity globally. We are strongly positioned to support our customers with their module requirements now through end of FY16.
FY15 year has been a transition year for our company. We have been extremely busy adding various services and launching new products – all to better serve the needs of our customers. Each of these products and services are focused on enabling our customers to realize significant growth in the upcoming quarters and increase profitability at minimal or no investment.
Centrosolar Eco System – We have successfully developed a fully integrated platform and launched the industry’s largest Eco System covering the entire solar value chain including product sales, financing, logistics, engineering & permitting, installation and asset & project management services. The offering enables any member of the value chain to focus entirely on their core competencies and outsource to Centrosolar the rest of the value chain. Real Good Solar (RGS) has been a pervasive user of this platform. All services are delivered with real time transparency and client control. To meet this offering, we have further developed our proprietary portals, implementation of SalesForce and full integration to SAP, our ERP platform.
We are continuing to build on this success and are seeking to add Business Development Companies to leverage our Eco System for financing and product offerings in all solar markets across the country. We are continually on-boarding Authorized Installers to provide engineering, permitting and installation services in similar markets.
New Product Launch
This year we have been busy with the design, testing and certification of two new product lines, across monocrystalline and multicrystaline technologies. As many of you remember, our B and C Series, are U.S. and Overseas made, respectively. However, we have added a mix of technologies from historical practice.
B-Series – The Only U.S. Made Module in the Power Class – Centrosolar is launching its next generation, B-Series, an all U.S. made, ARRA compliant monocrystalline module. An all black module is being offered in 260, 265 and 270 watt power density. It is a high efficiency module that is well positioned against an industry standard multicrystalline module of comparable power density. We have also accomplished a reduction in the price variance between a mono and poly module and a U.S. versus Asian module. There is no other manufacturer in the industry offering a comparable product.
Salient Attributes of the New B-Series
- All U.S. made module
- All black cell, frame and back sheet
- Aesthetically superior to a multicrystalline modules
- Nominal premium to Asian made comparable multicrystalline modules
- Substantially lower priced to other U.S. made modules
We have already sold 20% of our capacity through end of FY16 during our soft launch for deliveries starting November 2015. Given the demand, we are accepting orders against supply contracts in container loads only with minimum deliveries of 60 KWp per month.
C-Series – Launch of an Expanded Line – Including an all Black 290 watt Mono – Centrosolar recently launched its revamped C-Series multicrystalline and monocrystalline modules in 60 and 72 cell formats. The high quality 60-cell polys are available in 250 to 260 watt modules. The 72-cell modules, available by order, cover a power density range of 280-310 watt.
The C-Series also includes a line of all black, 60-cell, monocrystalline modules in 285 and 290 watts. In addition to their high efficiency and greater aesthetics, these modules are priced extremely competitive to comparable modules. We are also offering, by order, 72-cell format modules to expand power range to 345 watts.
We have already started shipping the poly modules and we are accepting orders for the mono modules for shipments commencing November 2015. Given the uniqueness of this offering, we are seeking to add only a limited number of dealers in strategic markets. As we are realizing high demand for this product, we are requiring our customers to enter into medium and long term supply agreements.
Salient Attributes of the Enhanced C-Series
- Black frame and white back sheet (60-cell) – power range of 250 to 260 watt
- Silver frame and white back sheet (72-cell) power range of 280 to 310
- High quality and high efficiency
- Production capacity available to satisfy all demand
- All black cell, frame and back sheet (60-cell) – power range 275 to 290 watt
- All black cell, frame and back sheet (72-cell) – power range 290 to 345 watt
- High quality and high efficiency
- Production capacity available to satisfy all demand
Solar Sales as a Service (“SaaS”) – In Q3/15, Centrosolar launched its Solar Sales as a Service solution to serve our Value Integrated Network to increase their sales and marketing capabilities and realize faster growth. We are currently refining the offering by executing the strategy in select markets. We are planning a national roll out in Q4/15.
SaaS is an outsourced sales and marketing team dedicated to helping our customers grow through professionally persistent market outreach and strategic territory management. We use the term “outsourced” because that is the most commonly understood term in the industry, but a better description would be “branch sales and marketing.” When you hire Centrosolar Solutions you receive a fully operational branch sales and marketing office built to scale.
Centrosolar’s strategic push/pull territory management system includes market analysis, lead segmentation, and professionally persistent outbound calling, door to door canvassing coupled with calculated inbound and outbound content marketing campaigns designed to build brand awareness, facilitate lead scoring, and drive warm leads to the sales team. The principal benefits of SaaS are:
- Lower overhead cost – SaaS teams do not require you to provide phones, laptops, office space and other resources
- Deployment of a larger multi-faceted sales team – For the cost of hiring one senior sales person, a company can get access to a full SaaS team
- Elimination of fixed payroll and benefits costs – With SaaS companies pay only for the services rendered and do not have to add individuals to payroll, benefits and travel programs, which reduces cost of sales
- Profit from years of established relationships – SaaS brings a wide variety of industry contacts and relationships that can be leveraged to deliver faster results than one person bringing only his or her individual contacts
- Increased Sales coverage – SaaS allows for a company to expand its reach faster than it could with one in-house individual
As our offerings continue to expand, we have been adding additional skills to our team. As we continue to attract talent across the organization, we are pleased to announce recent additions.
John J. Lott – John joins us as Executive Director with twenty-five years of experience in the financial services, consumer product and distribution industries. Prior to this, he was Co-Founder and Managing Partner of Mentoris Capital Management. Prior thereto, he served as CFO/COO of Quirky, Inc. a consumer products company. Prior to Quirky, he served as Head of Accounting for Cerberus Capital Management. Before that he served as CEO and member of the Board of Directors for Global Motorsport Group, the world’s largest manufacturer and distributor of after-market parts for Harley-Davidson motorcycles. Mr. Lott earned his Bachelor of Arts degree in Economics from Rutgers University and his MBA from Cornell University.
We are continuing to search for talent in the areas of sales, marketing, project management and account management. We welcome all recommendations 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.
For more information, please email us at email@example.com or call (646) 942.7488
Centrosolar America, Inc.
8350 East Evans Road, Ste. E-1
Scottsdale, AZ 85260