We recently looked at the overseas penetration of Chinese solar photovoltaic module makers to see if there might be lessons for the wind turbine industry. Chinese solar PV module manufacturers have rapidly increased their overseas market share. For example, they have increased from 0% to over 30% of the California solar market in three years, and have seen similar market share gains in Germany. Moreover, Suntech, a Chinese PV manufacturer, rated #1 in consideration rate in our recent U.S./Europe survey of solar buyers.
In contrast, the overseas penetration of emerging wind turbine manufacturers has been much more muted.
Six main factors account for the growth of the PV module makers:
- Cost leadership
- They entered market when supply was tight
- Solar modules are (relatively) simple, modular, and scalable, which makes entry easier for new entrants
- PV modules viewed as commodity-like
- The executive teams of the leading Chinese solar manufacturers have extensive experience outside China
- As businesses, the leading Chinese PV makers are relatively transparent to those outside China
The implications for wind turbine manufacturers heading into new regions are:
- Expect new market penetration will take a long time due to need for an operating track record. It may be a long time before local manufacturing capacity is required
- Purchasing projects or doing project development can get beyond bankability issues
- Developing local engineering and support capabilities should be high priority in overseas expansion
- Certain partnerships could accelerate progress and increase probability of success
- Prioritize markets appropriately
Download our detailed analysis here.