Yingli Solar from China sees itself as the “largest vertically integrated photovoltaic manufacturer worldwide” and wants to expand further. Five questions to the founder and CEO Liansheng Miao.
Mr. Miao, the solar industry is going through a severe crisis with a decline in the sales prices of solar modules, which have sometimes halved. Chinese solar companies like yours and Suntech Power are believed to be responsible for the aggressive pricing policy. How do you deal with this allegation?
LIANSHENG MIAO: The price drop in the solar module market has, of course, a number of reasons, including the collapse of the Spanish market and of course the global financial crisis. We certainly did not initiate it. I would also not call our pricing policy aggressive, but it is certainly true that we paid very close attention to our cost efficiency right from the start. Many of our German competitors paid too little attention to this, especially during the boom in the solar industry – and it was clear from the start that the subsidies for the industry would be reduced at some point. We owe our cost leadership to a number of factors, the least significant of which is the lower labor costs in China. What really moves us forward is the concept of vertical integration, i.e. the integration of the entire value chain in our company, the use of the most modern technologies and machines as well as the continuous effort to optimize our internal processes.
Yingli underlines the vertical integration of the entire value chain. Why is that your advantage over different providers?
MIAO: We are actually one of the few providers who have integrated the entire value chain, i.e. from the production of the raw material silicon to the completion of the module, at one location. First of all, this enables us to carry out comprehensive quality and cost controls. Should a problem arise anywhere, we can react quickly and fix it. In this way, we are also more independent of market fluctuations along the value chain and of the price and product policies of potential suppliers.
German solar technology companies are considered to be leaders in terms of technology. What innovations do you want to use to drive your global expansion, and which regions are you particularly pushing your way into?
MIAO: Our currently most important project, with which we want to drive new product innovations in our company, is the Panda project. This aims to increase the efficiency of our solar cells. We cooperate with the “Energy Research Center of the Netherlands” (“ECN”), a leading European solar research center, and with Amtech Systems, Inc. (“Amtech”), an international specialist in production and automation systems and a supplier of products for the production of photovoltaic cells. Another example would be the innovative technology we are using in our new silicon factory. We produce the silicon without the use of toxic trichlorosilane and using environmentally friendly raw materials. This production method is not only very environmentally friendly, but also reduces energy consumption and production costs.
Another important step was the approval of the first national research laboratory for photovoltaics, the “State Key Laboratory of PV Technology”, which is currently being built on our factory premises. The interlinking of a world-class research institution on our company premises with the operational application of technologies in our company will open up new potential for the development and marketing of innovative solar technologies. The decisive factor for us is always an optimal combination of innovative technologies in application, efficient processes, high product quality and cost efficiency. Our goal is to supply our customers with top quality photovoltaic modules with the best price-performance ratio, and we are sticking to that.
Your global solar projects also include a location in Munich and the Fritz Walter Stadium in Kaiserslautern. With which other local customers are you implementing new projects?
MIAO: An essential success factor for Yingli is the concentration on our core competence, the development and production of solar modules. The sales and management of solar projects are carried out by experienced partners in our respective sales markets who have a lot of experience and long-term customer relationships. These include companies such as Geckologic, Wirsol AG, Payom Solar AG and IBC Solar. We recently signed a three-year framework agreement with Gehrlicher Solar AG, one of the leading PV system integrators in Europe. According to this agreement, we will deliver photovoltaic modules with a total capacity of 285 MW to Gehrlicher Solar AG within three years until 2012. The PV modules supplied are to be installed primarily on the roofs of privately and commercially used properties as well as on open spaces in the most important European solar markets.
Yingli recently announced that it will be the first company from China and your industry to support the 2010 World Cup as a global sponsor. What do you expect from this and which marketing instruments do you still rely on?
MIAO: As a sponsor of the soccer world championship, we have the unique opportunity to present Yingli Green Energy to a large audience worldwide. We want to significantly increase awareness of our company and our Yingli Solar brand worldwide. This is particularly important for us as a Chinese company, especially since we are still repeatedly confronted with prejudices, among other things with regard to our product quality. Not everyone knows, for example, that we have entered into a long-term cooperation with TÜV Rheinland and have only recently been awarded the internationally recognized SA 8000 certificate for the high social standards in our company. As a sponsor of this year’s soccer World Cup, we want to go beyond positioning our own brand and use the opportunity to inform people around the world about the benefits and potentials of photovoltaics and, in this way, also bring the renewable energies sector forward. The sponsorship of the soccer World Cup is of course the focus of our marketing activities this year. But even after the final whistle after the last World Cup game, we will continue to rely on marketing instruments such as targeted press work, advertising, a strong presence at industry fairs and direct contact with our target groups in order to position ourselves internationally as an innovative provider of solar products.
Thorsten Garber asked the questions.
www.yinglisolar.com
