Ellick Liao, chairman of Solar Energy Corporation (TSEC) in Taiwan, said: “At present, there is a lack of brand recognition in the solar energy industry in Taiwan and the control of distribution channels needs to be improved.â€
Liao said that at present, the supply of solar energy products has exceeded the market demand by 150% to 200%, and this phenomenon of imbalance between supply and demand has lasted for 18 months. Since the second half of 2011, the European debt crisis has intensified, and European market demand has suffered. Given that Europe remains the world's largest solar market, the weakness of the European market has directly led to a downturn in the global market. However, in spite of the decline in demand, China's solar manufacturers still substantially expanded their production capacity in 2011.
Liao added that the imbalance between supply and demand directly led to a steep drop in prices. According to relevant research reports, at the end of 2012, the price of solar energy products was only 25%-43% during the January 2011 period. In addition, in the past two years, Taiwan's photovoltaic wafers and battery manufacturers have lost more than NT$20 billion (US$675 million) in total operating losses. Liao pointed out that the loss of manufacturers in mainland China is even more serious, and over 60% of companies have stopped production.
Trade War Derives Rare Opportunities
Liao believes that although the pessimistic arguments are still lingering, the solar energy industry is still one of the ten fastest growing industries in the past decade. He said that during the period from 2011 to 2012, the annual cumulative growth rate (CAGR) of solar photovoltaic systems reached 60%. Once the cost of solar power generation in developed countries such as European countries, Japan, Canada, and Australia is lower than fossil fuels, the first phase of the commercialization of solar energy will be completed.
Liao said that the trade war initiated by Europe and the United States left room for some breathing room for Taiwanese companies. The trade war not only can curb the large-scale capacity expansion of Chinese manufacturers, but also can shorten the cost gap between mainland and Taiwanese companies.
Liao believes that despite the opportunity, Taiwanese manufacturers have continued to lose money for 20 consecutive months and do not have enough resources to drive growth. If Taiwanese companies cannot strengthen their competitiveness, once the European and Chinese parties reach an agreement on certain aspects, the market facing Taiwanese companies will be very Limited.
Taiwan's solar energy industry still lacks brand awareness and marketing methods
Liao pointed out that at present, Taiwan's solar energy industry still has no horizontal or vertical integration. The main reason is that Taiwanese companies only produce mainstream products. Without free brand products and distribution channels, the Taiwan solar energy industry has always lacked connection with the terminal market. In addition, mergers and acquisitions are time-consuming and do not capture current opportunities.
Established a large sales representative company
Liao said: "I think that four or more solar cells, wafers, conductive pastes, and component companies can jointly set up a joint venture company to create their own brand as a large sales representative. In addition, the company can also work with one or two overseas companies. The company cooperates to establish a solar photovoltaic system business and promotes 'made in Taiwan' products."
Liao believes that the company can focus on major markets such as Europe, the United States, and Japan, setting up sales offices, and manufacturing and foundry solar module manufacturing plants to reduce transportation costs and avoid possible trade problems. In addition, the company can also operate its own branded business. In terms of materials, the vast majority are provided by shareholders, and the company also has certain rights to purchase materials from outside to maintain its own competitiveness. The company can also set up R&D centers to research and develop next-generation products and cooperate with investment banks to launch solar investment packages for investors. (Translator: Krystal)
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