AS Australia’s only remaining manufacturer of solar panels, it is fitting that Tindo Solar’s name is derived from the local Kaurna language word for “sun”.
The company is the brainchild of three entrepreneurial South Australians – Richard Inwood, Adrian Ferraretto and Ben Kerry – who committed $6 million to set up a turnkey solar module manufacturing plant in November 2011. Manufacturing operations started in February 2012.
Electronics News talked to Richard Inwood, Tindo Solar’s manager of business and people, about maintaining manufacturing in Australia against the current of outsourcing, and the company’s strategy and role even as the photovoltaic industry in Australia and beyond face challenges.
Bright opportunity, dark clouds
In December 2012, the Clean Energy Council released the Solar Power Australia 2011-12 report, which found 3.2 percent of all current electricity generation capacity in Australia comes from solar panel installations.
Over the period covered by the report, a total of 1.29GW of solar capacity was installed, with residential installations making up more than 95 percent of the market.
Increasingly, everyday Australians are seeing photovoltaic systems as a good investment for energy savings into the future, despite the demise of feed-in tariffs.
The attractiveness of solar is partly due to the lowered initial investment required by customers, as system prices have dropped over the last few years.
But this is a double-edged sword: the low prices have decimated solar manufacturing capabilities in Australia and other countries, and most industry observers agree that the supply-and-demand mechanisms behind the low prices are due for a drastic overhaul.
Between 2009 and 2011, large numbers of panel manufacturers in China popped up, funded by government subsidies and low-interest loans from state banks. As a result, Chinese solar panel production quadrupled, leading to a glut of solar panels flooding the international market.
Price-wise, it was a race to the bottom, and manufacturers faced unmoving inventories and dwindling profit margins. Critics in the US, Europe, and Australia say these manufacturers started dumping panels at below cost on foreign markets, and accused China of “green mercantilism”.
Trina, for example, which is the top-selling panel in Australia for 2012, sold its panels at or below cost, losing US$87 million on 414MW worth of shipments in the fourth quarter of 2012.
Some economic observers, like Professor John Matthews of the Macquarie Graduate School of Management, saw the strategy as being the opening moves toward a balanced, competitive capitalist industry in China around solar photovoltaics.
“China as a latecomer made a strategic decision to focus on the dominant technology of crystalline silicon and drive down its costs through scaling up production,” he claimed.
In any case, 2013 will be a year of change for the photovoltaic industry.
In January, IHS iSuppli indicated that by the end of the year, the global number of companies participating directly in the manufacturing of PV solar panels, from polysilicon manufacturing through module assembly, will be just 150, down from 2012’s 500.
In March, major solar player Suntech’s subsidiary in Wuxi went bankrupt.
In May, Europe imposed provisional anti-dumping duties of an average of 47 percent on Chinese photovoltaic imports, following similar moves in the US.
Appetite for more
But even as the market became saturated with Chinese panels, Tindo Solar, like many other electronics firms in Australia, recognised that success depended on capitalising on its strengths, and on differentiating itself from other players in the market.
“The traditional regime would be to purchase something from somewhere, typically China. It’s sold by the manufacturer, an exporter picks it up, ships it to Australia, where an importer picks it up, sells it to a wholesaler who then retails it,” Inwood observed.
“We thought that there was an appetite, and in fact almost a responsibility to give Australians the opportunity to explore an Australia-made high quality solar module, purpose designed and manufactured in Australia.”
To cater for this demand, Tindo Solar designs, manufactures, engineers and sells the solar panels straight from the factory to both domestic and commercial customers.
When asked about this adherence to an all-Australian operation, Inwood acknowledges that it would be cheaper to manufacture in China. However, doing so would not only blunt the company’s local edge, but also compromise quality.
“Once you have an outsourced manufacturing capacity, no matter how good you are, you have lost control over the quality elements that I think are critical to the output and longevity and the set-and-forget type of thing that solar should be, no matter how much you monitor that factory,” he said.
Like other smart manufacturers in Australia, Tindo Solar’s founders realised savvy operations were the key to controlling costs. By adopting a direct-sales model, the company eliminated the middle-man resellers, exporters and importers, and the costs associated with them.
To appeal to larger-scale clients, Tindo Solar has a power purchase funding option for bigger projects, which effectively eliminates up-front capital expenditure for an AC or DC panel based installation.
In return for the CAPEX-free supply and installation of the solar plant, clients agree to purchase the power generated by the solar plant from Tindo Solar for a set period of time.
“That power would typically cost less than what they are paying now,” Inwood explained. “We then cap the increases per annum to CPI, so they can budget.”
“No CAPEX, decreased power price, less price increases for the term of the agreement, and at the end of the term, they own the system. That’s pretty compelling news for large factories and people who have large businesses, and large electricity bills looking to find a way to manage those kinds of imposts on the bottom line.”
The factory
Technology also plays a big role, a fact that is immediately obvious to any potential customer who walks into the company’s premises – Inwood regularly escorts clients on a quick tour of the factory itself, and the company also holds regular tours.
“We put $6 million into the business, and $4 million of that went into machines, with robots, vacuums and component handling. So it’s extremely high tech, high quality, which you won’t get in many factories,” he said.
“It’s completely automated. We could practically run the plant, barebones, with a skeleton staff of four people. But we employ 12, plus another six on the road.”
Unavoidably, Tindo Solar has to source many of its components from overseas, since there are no Australian manufacturers for these products: the metal junction box is imported from Germany, the silicon wafer and glass is from Dow Corning, while the microinverter is from SolarBridge.
The typical Tindo panel goes through three distinct lines in the factory: layout, lamination, and finishing.
In the layout line, a pair of mirrored robots start the process of turning silicon wafers into photovoltaic panels. The robots orientate the wafers, and solder them onto ribbons to build strings of ten.
Six of these strings, with 60 cells, constitute a fully laid out module. The robots automatically solder these strings to complete the circuit.
The formal layout process then commences, where the wafers are layered over glass and EVA, then itself sandwiched with the EVA and back sheet.
To ensure quality control, this assembly is tested for errors, and an electroluminescent tester checks for hairline cracks.
“If there are errors, we take them out of circulation, make sure the wafer is repaired or fixed, and put back into the panel and then double-check again,” Inwood said.
The panels move on to the lamination line, where two 18 tonne laminators carry out the encapsulation process to seal them from the deleterious effects of the environment and air.
This is followed by the finishing line, which entails trimming, framing, frame checks, junction box application, a flash test, and optional microinverter installation.
It is the final step which determines if the resulting photovoltaic module is an AC or a DC variant – for an AC module, a microinverter is fitted on the back of the panel, converting the direct current generated by the panel into AC.
Safer rooftops
Due to the way solar panels generate electricity from sunlight, traditional installations (which number close to a million on Australian rooftops) deliver energy in DC. The direct current from the panels runs to an inverter, usually mounted on a wall, which then converts the energy to AC.
However, the high voltage present on the roof can be a fire hazard, especially if a system has not been properly installed.
A fault in the 400 to 600V system can result in an arc flash, and because the current is being generated by the solar panels, there is effectively no way to shut down the source.
“You cannot put water on an electrical fire. The unofficial response from the NFS at the point is to retreat 30m and apply fine mist,” Inwood said.
“That means basically to let it burn to the ground. The NFS will try their hardest if there is someone inside, but otherwise they really don’t know what to do with these things during the day when there is high voltage.”
By directly converting the current to AC at the panel via microinverters, Tindo Solar’s systems eliminate the inverters, and the electricity runs at 30V across the roof.
Additionally, AC systems allow much better granular control and insight through the individual microinverters.
“You can pinpoint every single panel and you know what each panel is doing. You have more performance, because each panel has its own system, so whatever is happening to other panels, it does not affect the others,” Inwood said.
The microinverters, which integrate thin-film capacitors, have a 25 year warranty as standard, compared to the usual five years for wall-mounted inverters.
Flight to quality
There is little doubt that this is time of change and uncertainty. The turmoil gripping the wider photovoltaic market is affecting Australian retailers too.
Adelaide-based Love Energy, for example, collapsed over the Easter break, and Unleash Solar went into administration in March.
“We are seeing retailers in Australia go out of business: there have been two here in SA just recently, and rumours of another three or four happening across the country,” said Inwood.
But Tindo Solar is seeing an opportunity where others see risk. In the next five years, it hopes to capture a minimum of 10 percent of the Australian market, on the strength of its technology and the cachet of being Australia-made.
In time, the company will also train its sights on the wider export market, such as India.
“With government support, we may have a look at some pretty sizeable overseas markets, which will then allow us to start to replicate the plant and increase employment quite sizeably,” Inwood said.
“India…has budgeted approximately 30 odd billion dollars of PV over the next ten years. That’s a sizeable market but it’s a different market to Australia. We should be exploring that, we need a delegation to go there and look at markets, and explore what kind of product would fit there.”
In the meantime, however, Tindo Solar plans to capitalise on the instability within the Chinese photovoltaic industry, and the expected increase in the prices of solar panels from overseas.
“The public is really looking for someone to trust in solar. And we have an edge there, because we are local and we have an open-door policy,” Inwood explains.
“That sense of being Australian, keeping manufacturing jobs going, and having faith in a high-tech plant…it’s a flight to quality that we are now seeing.”