Chinese EPCs dominate

Chinese engineering, procurement and construction (EPC) companies were already the big climbers in the IHS 2012 Ranking. This trend continued in 2013. As was the case in the 2012 EPC ranking, First Solar is still the largest EPC company worldwide and in 2013 installed projects with an output of more than 1.1 GW. The other two U.S. “top dogs,” SunEdison and SunPower, however, lost a significant amount of ground. By contrast, three Chinese companies, Shanghai Solar Energy, Zhongli Talesun Solar, and Astronergy, made the EPC top ten chart for the first time. TBEA Sun Oasis is the shooting star of the 2013 ranking. Compared to the previous year, the Chinese company quadrupled its installation capacity to 1 GW. GD Solar, a subsidiary of the China Guodian Group, also grew strongly. European companies, on the other hand, have lost considerable ground. Belectric slipped down to tenth place and Enerparc is no longer among the top ten. As Abengoa Solar installed large PV parks in California for the first time last year, the Spanish company managed to make 9th place in the rankings for the first time. According to IHS, however, Abengoa has no further PV projects in the pipeline for this year.
“The ranking reflects the market development mainly in large projects in China and the USA,” says Josefin Berg, Senior Analyst Solar Power at IHS.
Last year, business was booming above all in China and the USA and the signs all point to further growth. Projects in China and the USA accounted for around 50% of the global PV pipeline amounting to 114 GW. It was for this reason that the big Chinese and U.S. EPC companies also turned to their own domestic markets. The booming Japanese PV market, on the other hand, was significantly more fragmented, with many local suppliers. More fragmented structures also predominated in Europe, with restrictions on the construction of large field installations.
According to Berg, it is characteristic of the leading EPC companies that they cover not only traditional project development but often also invest in projects themselves, offer everything from one source and “have an adequate cash flow.” They mainly install their own modules because there are many vertically integrated manufacturers among the large EPCs. In the case of the Chinese companies, however, so far these are mainly tier-2 and tier-3 manufacturers that are part of larger corporate groups, not as successful at selling their own branded modules and concentrating intensely on the domestic EPC business. Berg, however, expects the leading Chinese tier-1 module manufacturers, virtually all of whom are expanding their EPC businesses, to play a more important role in the future.
Like Berg, Adam James, Solar Analyst for Global Demand at GTM Research, sees a challenge in stronger geographical diversification of the leading EPCs. After all, making oneself almost completely dependent on a strong domestic market harbors substantial risks, due, among other things, to changes in the basic political conditions.
“In future, greater regional differentiation will most certainly be important for long-term competitiveness,” James says, referring to the increasing number of new PV markets. In the short term, however, the Chinese EPC companies in particular could probably do quite well by focusing on the domestic market because, given the strong domestic demand, the costs for developing the overseas market would not be worth their while.

First Solar – number one again

As in the previous year, First Solar is again ranked number 1 in the 2013 IHS ranking. Last year, the U.S. company completed PV projects with a rated output of 1.113 GW, more than twice the output of the previous year (2012: 516 MW). The vast majority of these projects, 94%, were in the USA. First Solar’s share of the global EPC business last year was only 6%. Josefin Berg says that in 2013 the company benefitted significantly from its huge project pipeline in the USA, which it had built up in the preceding years. First Solar has a sound financial footing due to its strong project business in the USA and has sufficient cash flow to expand further. Berg and James expect First Solar to further grow this year with a completed project volume of at least 1.3 GW, although the U.S. company could possibly lose its number one position: “We actually expect that TBEA could overtake First Solar by a few hundred megawatts in 2014”, says Berg. The IHS analyst anticipates that in its EPC business the company will again continue to be active mainly in the domestic market this year due to its very large project pipeline in the USA.
Adam James is of a similar opinion but he expects the company will have a stronger EPC commitment in new markets. He points out that in Chile alone First Solar has built up a project pipeline of 1.5 gigawatts.

TBEA SunOasis – the climber

The steepest climb in the IHS ranking, from ninth to second place, was achieved by TBEA SunOasis. In 2013, the Chinese company completed PV projects with an output of 1 GW in its domestic market, four times as much as in the previous year (2012: 250 MW). The company, which is based in the autonomous region of Xinjiang in the west of China, is a subsidiary of Tebian Electric Apparatus (TBEA). In its own words, it is a vertically integrated manufacturer of modules, inverters and system components. In addition to TBEA, the Tsinghua University and the China Energy Conservation and Environmental Protection Group are also shareholders in this company that was set up in 2000. TBEA was the first company in the Chinese transformer industry to go public.
Both analysts see TBEA SunOasis on a growth path. IHS even expects TBEA SunOasis to reach 1.5 GW of installations in China and surpass First Solar. Additionally the company is involved in power projects in other markets such as Pakistan, where it has announced the construction of a 100 MW PV plant in 2014 and 2015, according to IHS.
“TBEA’s global reach as a power equipment provider opens up possibilities for EPC contracts in new PV markets,” says Berg. “Yet, as the domestic market will grow by 31% this year, TBEA is set to keep the systems business growth focused on China.”

GD Solar – significant growth

GD Solar climbed four places in the IHS ranking compared to the previous year and is now number three. Last year the company completed projects in China with a capacity of 715 MW (2012: 470 MW). Like the other leading Chinese EPCs, GD Solar also manufactures its own modules and is part of a large group of companies, the China Guodian Corporation. GD Solar is headquartered in Jiangsu, was established in 2009 and reports a workforce of 5,000. The parent company, the China Guodian Corporation, is one of the five largest energy producers in China with a total workforce of 110,000 and, according to Josefin Berg, also has many years of experience with renewable energy projects in the hydropower and wind power sectors. Berg adds that GD Solar also buys in modules for PV projects.

Shanghai Solar Energy

New to the top ten and straight in at number four is Shanghai Solar Energy Science & Technology Co. In 2013, the company completed projects with an output of 550 MW, almost three times as much as in the preceding year (191.5 MW). Shanghai Solar was set up in 2009, has 3,500 employees and also manufactures its own modules. According to IHS analyst Berg, its production capacity was around 500 MW. Its parent company is the Shanghai Aerospace Automobile Electromechanical Co. Berg points out that Shanghai Solar also completed a number of projects around the world in previous years, including in Germany and Italy. According to IHS, however, 100% of its projects in 2013 were completed in China.

SunEdison – slipped down

SunEdison has slipped down three places to fifth position. Last year, the vertically integrated U.S. company installed projects with an output of 505 MW (2012: 389 MW) and according to IHS also used its own modules. Although the company lost ground in the ranking and reported net losses of $300 million in the first quarter of 2014, both analysts have an optimistic view of SunEdison’s future. Josefin Berg expects that, due to its huge project pipeline, the company will be able to complete solar parks and commercial systems with an installed capacity of close to 1 GW this year. The majority of the SunEdison project pipeline is in the USA, according to Berg, but the company is active in a number of other new markets such as Jordan, South Africa and Chile. As reported by Adam James, SunEdison is currently the leading EPC company in Chile. The company also has several projects at the planning stage in Mexico and India. James also sees SunEdison’s global presence as a huge advantage of the company. As stated by IHS, the international portion of its business
###MARGINALIE_BEGIN###

###MARGINALIE_END###
already amounted to 47% (USA: 53%) last year.

Zhongli Talesun Solar

In the ranking for the first time and occupying sixth place is Zhongli Talesun Solar. The vertically integrated cell and module manufacturer completed projects with a capacity of 400 MW last year, 97% of which were in China, according to IHS. Adam James reports that, like the other leading Chinese EPCs, the company benefited above all from the installation boom in its home market. For this year, however, Josefin Berg does not envisage any major growth in the project business. The analyst also expects an installed capacity of around 400 MW for 2014. The company is part of the Zhongli SCI-Tech Group.

Astroenergy – jumps to seven

Astroenergy, which occupies seventh place, is also new to the club. Last year, the Chinese company completed PV projects with an installed capacity of 350 MW, more than three times as much as in 2012 (100 MW). The vertically integrated module manufacturer also produces inverters and is part of the Chint Group. Berg says, “In earlier years, Astroenergy was also off the ground with its project business in several European countries such as Bulgaria but it is now concentrating 100% on the Chinese domestic market.” The IHS analyst is expecting a slight growth in the company’s EPC business this year to a good 500 MW. Adam James is likewise anticipating that Astroenergy will be able to slightly improve or maintain its position. The company has grown steadily over the years and offers a wide product range of crystalline and thin film modules.

SunPower – market shares lost

SunPower which is in eighth place (2012: fifth place) has slipped down the ranking slightly. The company, headquartered in California, completed projects with an output of 319.3 MW (2012: 190.5 MW) last year, all of which were in the domestic U.S. market. Berg and James are expecting the vertically integrated system supplier to expand its EPC business internationally this year. According to James, SunPower is currently constructing a first 70 MW project in Chile that will sell solar electricity on the spot market. Berg reports that the company was able to build up a rather large project pipeline in South Africa and is increasingly busy in its module business in Japan. Berg expects that SunPower will complete at least 800 MW of projects this year.

Abengoa Solar – interlude in PV

Last year, Abengoa Solar reached an installed capacity of 266 MW and as a result is new to the ranking and straight in at number nine. In the previous year, the Spanish company’s PV project business amounted to only 9 MW. This is because the multinational company’s main focus in the solar sector is on solar thermal power plants. Josefin Berg reports that last year was a special situation because Abengoa Solar, together with the U.S. project developer 8minutenergy Renewables, built the 266 MW Mount Signal Farm in California. At present, however, Abengoa has no larger PV projects in the planning stage. As a result, the analyst is not expecting the Spanish company to play a role in the 2014 EPC ranking.

Belectric – lost ground

Belectric slid spectacularly from third to 10^th place. The company, headquartered in Bavaria, Germany, installed PV projects with a total of 246 MW last year, 78 MW less than in 2012. Berg says, “Belectric is still very strong mainly in Germany but last year it lost market share due primarily to the restrictions imposed there on the construction of large solar parks.” IHS reports that last year the company did more than half its project business in Germany (52.3%), followed by France (17.1%), with the remaining in the EMEA region (Europe, Middle East, Africa) at 7.1%, the USA at 17.7% and the rest of the world at 4.7%. Adam considers the internationalization of Belectric that has already been set in motion – similar to SunEdison – as a long-term competitive advantage.
Berg is also expecting that Belectric’s international project business will continue to increase in the medium term, among other things via the joint venture with Solar Frontier and a cooperation with First Solar in the BOS sector. For the current year, however, she expects – mainly due to the further decline in the German market – that the company will no longer make it into the ranking of the world’s top ten largest EPC companies and in all likelihood will only install 230 MW.