With vertically-integrated manufacturing platforms and an R&D-supported quality control system, Upsolar’s premium mono- and polycrystalline modules are reputed to be peak-performance modules in the PV industry.
It’s a result of the company’s ‘Excellence at Each Step’ approach, Zhe Jiang, CEO of Upsolar, emphasized.
Reported by Stella Lee (pved1@infothe.com)
Upsolar has a very special position within the PV industry with its unique business model. Can you describe it briefly?
Two main categories of module suppliers dominate the PV landscape: the traditional manufacturer model and the Original Equipment Manufacturer (OEM) model, each own distinct and well-known advantages as well as disadvantages. Upsolar’s business model is essentially a hybrid of the two, taking the best that each model has to offer and fusing them together to create an ‘asset-light’ manufacturing model. We outsource our production while maintaining tight control over our cost and quality, and the result is─at any given time─the best solar solution on the market today.
A common misconception is that Upsolar is an OEM manufacturer. The reality is that we lease our manufacturing tools, and then we focus resources on what we consider to be most important. We emphasize component quality and end-user-oriented product design, ultimately integrating technologies that optimize performance both at the module as well as the system level. That is the key to how we achieve our high quality-to-cost ratio.
What motivated you to take this route?
This industry moves very quickly. In the face of frequent policy changes, constantly emerging new technologies and fluctuating prices of products and raw materials, we envisioned a business model that would fare well under all types of market conditions. For example, when a new technology is introduced, manufacturers with most of their investment tied to production often have to write off their capital expenditures. With our asset-light approach, Upsolar is able to adapt this technology in a very short time frame without extra capital expenditure, maintaining flexibility in product development, the ability to scale manufacturing to respond to demand, and up-to-date production technology.
From the very beginning, we wanted to function in a way that allowed us to constantly identify and work with the most competitive partners at each step of the manufacturing process. This has helped us develop a product that, on closer examination into any given component, it is easy to recognize its added value. This is done through our ‘Excellence at Each Step’ quality assurance process. We designate dedicated teams to vet technological innovations and test them in the lab, who then follow the process from beginning to end-streamlining it to integrate only the technologies that meet our high standard of quality and performance. These teams then monitor the quality of the production processes at every stage to ensure durability.
How has Upsolar been doing this year?
We are on track to reach our target of 300 MW in shipments this year, and we’re looking to expand our shipment capacity to 500 MW in 2012. Compared to last year, our compound growth rate is up 80%. In addition, we are building up our local teams, with on-site and on-the-ground support in over 15 countries worldwide.
What are some new developments at Upsolar?
The company is undertaking a groundbreaking sustainability initiative with a cradle-to-grave approach. Upsolar recently began a voluntary study to determine our impact via a comprehensive Life Cycle Assessment (LCA) of our manufacturing platforms. We are one of the first to do such a thorough assessment of the impact of our manufacturing processes on the environment. Given increasingly strict environmental standards and demands of end-users themselves, we are certain that our efforts have been well directed, and it is our hope that others will soon follow suit.
What role do you believe China will have in the coming years, and how do new policy developments in China affect your business/strategy?
In the short term, our strategy will not experience any drastic changes. As with all global emerging markets, we believe it is critical to have a deep understanding of the market. As the Chinese government increases its support for the development of the solar PV industry on the consumption side to match with its current position as a supplier of modules, its role as a major PV market will continue to increase. The policy developments certainly work in our favor by opening up massive potential, and by following it closely as the regulatory environment stabilizes, we will be on track to reap the advantages of the Chinese market.
Upsolar has impressive performance in European markets. What do you attribute your success to, and how will you continue to meet the needs of your global customer base?
Our customers have expressed satisfaction in our continual product development, the quality of our product, our diverse package offerings and our comprehensive array of module warranty and insurance coverage. We are able to perform strongly on these fronts because of the strength of our local offices and the commitment of our employees to the Upsolar cause.
Without feedback from our sales teams on the ground, we would never be able to identify or meet the needs of local markets. These needs―as well as challenges―are communicated and responded to in a timely manner, allowing the company as a whole to be among the first to really adapt to the market structure and the demands of our global customers.
Tell us more about Upsolar’s EU-made product.
In the PV industry, supporting local economic development is a key and often drives incentives and policies. Upsolar has a ‘Made in Europe’ certified product that will qualify end-users to reap additional benefits on the Italian FiT policy. These modules are produced using German-sourced solar cells and certified by Italian PV certification authority, ICIM. By using locally sourced components as well as diversifying the locations of our manufacturing platforms, we are ensuring that our customers worldwide are able to benefit from an array of features marked by quality-driven performance and reliability.
Can you describe your own vision and long-term strategy for Upsolar?
A successful PV module company is in tune with and responsive to the state of the industry, which has always been a challenge because of the differences across international and regional markets. Though large-scale projects will continue to be built and remain an integral percentage of total installed PV worldwide, distributed generation will become increasingly more popular, especially with trends in regional incentive policies. We are developing our sales and distribution channels accordingly─in addition to the structure necessary to keep up with such a dynamic and unpredictable policy environment, we are working on several business packages that cater to the needs of different types of customers.
From a product development perspective, we will also continue our commitment to continuous innovation. We focus on creating synergies between Upsolar and strategic partners in the industry, attracting new technologies and presenting the customers with best-in-class PV solutions.
A lot of companies talk about innovation. How does Upsolar define ‘innovation’, and how does it manifest itself in your products?
Our business model is the embodiment of innovation. We refuse to believe that all modules are the same, the needs of every customer are the same, and that the only room left for improvement is through reducing the cost. By way of the technologies integrated into our products and the flexibility of our manufacturing process to implement them, we have refocused our resources and our efforts to design a new take on a familiar product that is embedded with the newest and best technological innovations. The result is the highest quality-to-cost ratio, and a product that can truly be considered innovative.
What are the greatest challenges you anticipate for the PV industry, and how does Upsolar plan to overcome them?
There is no question that grid parity will be reached, either through decreasing product or system cost. One challenge that we are really focused on currently is the storage of excess energy. We know that there are companies actively searching for solutions to this problem, and we are always looking for partners. This is part of what excites us at Upsolar-when you see the product rapidly changing and efficiency improving, you can adapt your product offering and even your business model to meet the needs of the dynamic industry.
Stella Lee is Editor of InterPV. Send your comments to pved1@infothe.com.
For more information, please send your e-mails to pved@infothe.com.
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