European distribution insights

Which markets have performed most strongly for you over the last year – Germany, the U.K., Italy, the Netherlands, or Spain?
Our home market is Germany, where our headquarters and our two German support offices are located. Consequently, we are much stronger in this market.

In the last quarter of 2018 as well as the first quarter of 2019 we have experienced a sharp increase in terms of sales volume, which some analysts believe is related to legislative changes and expect it to settle in Q2. Legislative changes are, in our view, not the only driving factor. We can also perceive a supply bottleneck in PV modules, which is potentially limiting growth to some extent. On the other side, the increased efforts from our distribution partners, as well as the new products launched by Huawei in the last year, have clearly contributed to an increase in market share – this is why we currently are quite optimistic.

In the Netherlands we have had a very strong increase in volume. Our team in Utrecht is highly successful in correctly understanding the needs of our distribution partners and their customers there, as well as in nearby Belgium. But not only in the commercial and industrial market segments are we performing well – we are also seeing a very healthy business in the residential and utility-scale market in those countries.

While the landscape in each market will vary from country to country, what market segment is most promising for you?
Wattkraft is very active in the residential as well as in the commercial and industrial market segments through its partner network, but we also have identified good opportunities in utility-scale plants. That said, Germany is our core market and legislation there favors PV plants below 750 kW, placing the focus on the commercial and industrial segment. Germany also has an active residential market, with a very promising evolution in the sales of PV systems which also include energy storage.

Precisely for this market segment, Huawei successfully launched last year its hybrid inverter family, called Smart Energy Centre, which is a PV inverter, with a battery interface, and the energy management and Wi-Fi communication to a mobile phone app and through the Internet, all in a single, lightweight device. It is a very exciting product, which is being well accepted in all European markets.
Very recently, Huawei also announced the market launch of its new three-phase inverter family ranging from 3 to 20 kW in power output, with extended communication capabilities. This family of products is the common link between the residential and the C&I market segments, as it addresses both.

Did you already experience a boost in sales resulting from the presumed “solar renaissance” in Europe?
Wattkraft is constantly increasing its market share through its distribution partner network in Germany, Benelux, Italy, Spain, and Portugal, where we are official partners of Huawei. We all experienced sharp growth in terms of sales volume, and we believe that this not only happened because of the market evolution itself, but also due to an intense effort of all partners to bring Huawei into the market.

Although we are quite confident about the European market, we always try to keep in mind that in the past the solar industry has experienced high market dynamics, which comes from a strong legislative dependency. The whole energy sector is quite strongly regulated in Europe, and the solar industry is being guided by political decision makers into the directions they consider more beneficial.
As political changes sometimes take place in a very narrow time period, the solar industry has registered some sharp movements in the past and eventually also will in the future, although we believe that frequency will decrease over time.

As a distributor you work with EPCs and project developers. Can you tell us what is of special interest to these customer groups, with regards to inverters, in the European markets that you serve?
EPCs and project developers have slightly different needs in the markets we serve – most of them ultimately derive from aspects related to legislative or technical requirements, financial questions, expectations on the return of investment, and of course risk management.
In relation to inverters, there are many points in common. For example [there is] a clear trend towards string inverters, a high interest in cloud monitoring solutions with cloud-based servers – even better if these are physically located in countries with strict data protection laws, as for instance Germany.

Digital communication features are very important nowadays, and for large EPCs the communications infrastructure is always an important cost factor, not only in terms of investment, but also in O&M. In this field, Huawei can offer either standard communication solutions, or more advanced communications directly over the AC cables. This allows cost savings and higher reliability, making sure that data collection and plant control can be kept fluent. For more advanced users, Huawei also offers an optional I-V curve analysis and diagnostic service that allows for identifying several potential problem sources on the modules. This is a very powerful tool for optimizing preventive and corrective O&M costs, not just during operations over the years, but also at the initial stage to identify commissioning mistakes which you would never be able to find or even realize without such a functionality.

Wattkraft specifies Huawei inverters exclusively. Why did you settle on this brand?
Opposite to other players in the market, Wattkraft decided to focus only on one brand. What we expected to achieve was a higher degree of specialization, improved added value for our customers, and a tighter commercial and technical relationship to the manufacturer.
Above all else, there is a very simple reason for us to focus on Huawei: Based on the low failure rate, the high yields, and the technical and financial background of the company, it is by far the best inverter you can get in the market.