According to GTM Research's Global Solar Demand Monitor, global PV installations are expected to reach 85GW in 2017, after seeing a 30% growth to 78GW in 2016. China as a major solar energy producer has become the world's largest market of photovoltaic technologies.
The 11th SNEC International Photovoltaic Power Generation Conference & Exhibition 2017 in Shanghai was a global, professional and colossal industrial event with far-reaching influences in China, Asia and other parts of the world. As a veteran that has contributed to the development of the solar energy industry, Heraeus released several innovative metallization pastes at the event and debuted its total solution bundling the company's technologies, products and services to bring optimum values for customers.
In his interview by Digitimes, Dr. Weiming Zhang, Chief Technology Officer of Heraeus Photovoltaics, pointed out Heraeus securely holds its leading position in terms of the market share of PV metallization pastes, with widening distance between itself and its rivals, and will continue to launch solutions for renewable energy to contribute to an expected reduction of 50% in the levelized cost of renewable energies in the next five years.
At the event, Heraeus also announced it has delivered 4,000 tons of silver pastes to its customers in eight years since it developed its first metallization paste in 2008. The number technically translates into around 3 trillion crystalline silicon solar cells able to produce more than 133GW, enough to sustain 156 Longyangxia Dam Solar Parks, the world's largest solar farm.
Q: Heraeus has grandly unveiled eight new products and services at SNEC 2017. Could you highlight the reasons behind these important product launches at SNEC 2017 and their respective features?
A: Heraeus attaches great importance to our development in the China market. By announcing several metallization pastes at the event this year, we are making these high efficiency new products and services available to our China customers as a first priority. With the metallization pastes as vehicles, we help customers analyze their production process, find solutions and raise efficiency. Heraeus will continue to devote resources to R&D of new photovoltaic solutions. This is also Heraeus' commitment to customers.
First of all, for PERC cells, the SOL9641B series helps boost efficiency to a whole new level. On mono- and poly-crystalline ULDE and PERC cells, the series raises cell efficiency by up to 0.2% with its improved finger geometry. Better metallization contact and less shading enable this efficiency boost. In addition, the organic vehicle system for ultra-fine line printing has been improved. Mass production of this series has kicked off.
For black-silicon solar cells, which we expect to become the mainstream poly-crystalline silicon technology this year and the next, Heraeus offers the 9641A series to address the big challenge that the nano-structured black-silicon cell surface introduces to metallization pastes. Its specifically designed formula features a unique glass chemistry and fine-tuned organic media to perfectly fit the particular surface morphology of black silicon with superior adhesion and tension.
Furthermore, the SOL9641AX/BX series is custom-made for the knotless screen printing technology. Compared to conventional wire mesh, this emerging technology gives the paste more room to pass through and is also expected to become mainstream. Designed to fully leverage the advantages of knotless printing screens, the whole new SOL9641AX/BX series features superior printability, unique paste rheology, and a significantly higher aspect ratio on ultra-fine-line fingers, likely to achieve a 0.1% efficiency gain.
Heraeus has also launched a double-print package for customers transitioning from traditional technologies. The upgraded double-print package with SOL9642A and SOL9642B silver pastes carries all the advantages of the SOL9641A and 9641B platforms. An outstanding efficiency gain of up to 0.1% is enabled through improved double-print Ultra-fine-line (UFL) printability with a higher aspect ratio, which translates to lower costs and higher performance for customers.
Finally, for n-type cells, Heraeus offers the SOL9360 breakthrough metallization paste, an upgrade from the previous generation 9350 series. An efficiency gain of 0.1% can be achieved with the fine finger width. Customers have confirmed to have achieved higher efficiencies with significantly less paste usage, thereby considerably lowering a cell's cost per watt. We think n-type cells will ultimately set a benchmark for photovoltaic cells, as they mature from a technology with high barriers to a product with differentiating features.
Q: How are customers in China responding to these new products you mentioned? Are there any success stories you can share with us?
A: Heraeus is working with major customers in China to put these new products to use. For example, we are supplying SOL9641BX knotless screen metallization paste to EGing Photovoltaic Technology, which is also the first customer of this product. EGing is able to build up production capacities for mono-PERC cells using knotless screen printing technology and SOL9641BX paste, achieving a 0.1% efficiency gain and boosting the power output of mono-PERC modules up to 310W. With further optimized production processes, the performance of EGing mono-PERC modules can be even higher.
We think PERC cell development is only now at phase 1.0 (about 21.5% conversion efficiency) with ample room for improvement in terms of materials and processes. What we call PERC1.5 can provide a 23% conversion efficiency. Lab tests now show PERC cells will be able to deliver higher than 24% conversion efficiency in phase 2.0. The market has promising potential and commercialization can be expected in the next five years.
In addition, Heraeus and Jolywood have entered into a strategic R&D cooperation agreement to jointly develop high efficiency n-type mono bifacial solar cells and promote their applications and popularity. Heraeus' frontside and backside silver pastes enabled Jolywood to produce n-type bifacial solar cells in volume last year. This year, Jolywood is strengthening the collaboration with Heraeus to further increase n-type cells' frontside and backside efficiencies, cells in mass production currently reaching 21.3% frontside and 19.2% backside efficiencies, a world-leading performance.
Q: Further to the success stories of your China customers, could you talk about Heraeus' future plans for expansion into the solar energy industry in China? Compared to the rest of the world, what are the characteristics of the customers in China and what product features do they place great importance on? How do you envision business growth over the next three to five years?
A: When Heraeus first set foot in the solar energy business in 2008, our first customer was from China. As China is the world's largest solar energy market, we pay great attention to our investments and strategies toward this market and this is why we are headquartered in Shanghai. Also for this reason, we provide package solutions as well as products to bring optimized values to customers. With our large service teams established in Shanghai, we are continuingly accumulating success stories from key customers and expanding at larger scale.
Heraeus invests a double-digit percentage of its photovoltaic technology revenues into R&D every year and will keep devoting more resources. Our worldwide R&D team comprising nearly 80 members will continue to grow. Planning for products and services will include short-, mid-, and long-term strategies. Collaborations with research and academic institutions will help maintain our edge in future technological advancements of the solar power industry. This is also why customers trust us and are willing to engage in extensive partnerships with us.
We have observed significant changes in customer characteristics in China over recent years. They have transitioned from technology followers to technology leaders. Not only do they go after spurring growth in scale, they also pursue technological upgrade. In terms of supply chain relationships, they value long-term partnerships more than mere buying and selling deals and care about win-win gains from close and deep collaborations.
Our task force in China added 50 new recruits last year and will keep growing this year to provide customers premium local and timely services. It's no doubt that China will be a key market in the next three to five years.
Q: Please share Heraeus' views on the global trend of the solar energy market. Please also give an analysis on Heraeus' market share of paste solutions. What are Heraeus' leading edges compared to other competing brand suppliers?
A: The solar energy market experienced a 20%-25% growth in 2016 from 2015 and the first quarter of 2017 is likely to also deliver a yearly increase of 20%-25% compared to the corresponding period of 2016. However, the installations in China in 2017 will not be as high as the level seen in 2016; it's likely to stay flat. This will impact small-to- mid scale suppliers with less significant influence on large suppliers. Other parts of the world such as Southeast Asia, India and the US can expect to see more optimistic growth projections.
With a 30% share in the market of metallization pastes for solar cells according to the latest statistics, Heraeus securely holds the No. 1 spot, with widening distance from the second place holder.
This market is seeing many newcomers. However, it should be highlighted that Heraeus' advantages come from its ability to reduce costs and significantly boost performance for customers. Furthermore, we think that short term sales relationships will not sustain business growth and trust that only by strengthening collaborations with technologically capable manufacturers, we will be able to maximize values. As such, we are fully committed to R&D and continue to extend product offerings as we value long-term partnerships, not just short term sales.
Q: Metallization pastes for solar cells are one of the key materials with deciding influences on the conversion efficiency of solar cells and the related patent technologies are also critical. What are Heraeus' latest advances on innovative patents? Also, we are closely watching your patent litigation with a competitor based in Taiwan. Could you comment on the recent litigation developments?
A: Heraeus places great emphasis on patents and holds more than 300 patents through internal organic growth, ongoing R&D and even external acquisitions, expanding its patent portfolio by 10% to 15% every year. The huge investments in patents are due to Heraeus' belief that the solar energy market will eventually progress toward positive, healthy, orderly and sustainable development and Heraeus is preparing itself for this.
For example, the fact that Heraeus is able to maintain a leading market share in Japan is due to the trust that Japanese customers place in Heraeus technologies and the guarantee of long-term relationships. This perfectly illustrates the Heraeus Photovoltaics advantages.
Heraeus is confident that the patent litigation with the Taiwan-based vendor will come to a conclusion in the second or third quarter of this year barring unforeseen circumstances. We believe the court will make a fair ruling. Meanwhile, we will further our legal pursuit against the other party not only in writing but also with actual follow-up actions as well.
Dr. Weiming Zhang, Chief Technology Officer of Heraeus Photovoltaics