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Leeds University Business School

Internationalisation of Chinese Solar Firms: A Case Study of Astronergy and

Jinko Solar

Cristina Romano – International Workshop on East Asian Investment in Europe, Leeds, 24-25 September 2013

[email protected]


What Strategies Do Chinese Solar PV Manufacturers Use to Acquire and Develop Technologies? Are These Strategies Influencing Their

Internationalisation Paths?

The Case of Astronergy and Jinko Solar.

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OVERVIEW

• Solar industry perspectives

• Hangzhou Context

• Jinko Solar

• Astronergy

• Internationalisation rationale

• Conclusion 3


SOLAR INDUSTRY - Global perspective

Source: European photovoltaic industry association, 2013.

GLOBAL PV INSTALLED CAPACITY SHARES 2012

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Hangzhou Context• Hangzhou is located in Zhejiang

province, South east china.• It was named by Forbes China

as best city for business. • More than three industrial

areas.• The whole province is known to

be the pool of private entrepreneurship in China (e.g. Wenzhou).

• Hangzhou is a green city and both the provincial and the municipal government put a lot of effort in the development of new energies industries.

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TWO CASE STUDIES

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Research Methods

• Research for this paper can be divided into two distinct paths. For research examining the technology acquisition and development strategies of both organisations it was thought that both qualitative and patent data would provide the most complete picture. However, the issue of the international expansion of both companies, is instead mainly based on qualitative data.

• The choice of the two companies was mainly driven by: location, positioning in the market and availability of data.

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JINKO SOLAR HOLDINGS Ltd. Co. • Founded in 2006. As on 2012 detain 4,7% of global market

share.• Leader in modules, cells and wafers production in China.• Production centres in Zhejiang, Jiangxi and marketing office in

Shanghai.• Listed on NYSE in 2010.• Best selling products are solar modules.• All R&D is produced in house. The R&D team is composed by

148 engineers, and the actual director of the R&D centre had valuable international experience.

• The company is trying to improve its position in the downstream market by engaging in more installation projects, such as commercial rooftops in Italy, Belgium, Israel, US.

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ASTRONERGY / CHINT SOLAR• CHINT was founded in 1984 and it is a leading electrical appliance

producer.• Astronergy ,solar unit of CHINT was founded in 2006. According to

Solarbuzz 2012 report, it ranks 6th in terms of solar panel installation projects.

• Based in Hangzhou, Binjiang district. Hi tech dedicated industrial area of the city.

• Production focused on thin film solar panels. • R&D completely produced in house. Mr. Yang (Astronergy CEO) at the

time he was working for BP solar, personally produced a thin-film solar PV.

• Large presence in downstream market, with several PV projects participation around the globe and PV building integrated solar systems.

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JINKO SOLAR global presence

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Source: Jinko solar company profile, 2012.


ASTRONERGY global presence

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Source: writer on the basis of information from Astronergy official website.


INTERNATIONALISATION RATIONALE

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1. Market expansion

• Tap most important European markets

• Participate in large projects where they were able to sell a larger amount of panels. This would obviously benefit their international image and their profits.

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2. Improve brand influence • JINKO solar used to sell panels with their own name and

only the products they did not used for themselves were sold as OEM.

• ASTRONERGY, significantly benefited from the networks of its parent company CHINT Group. It also helped them to take part in large projects and provide a full balance of system service.

• Both companies invested in international quality certifications in order to improve their reliability.

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3. Positive policy environment

• At the time they started their internationalisation in Europe, governments such as German and Italian were giving considerable incentives in order to favour the number of installations.

• For a long time these incentives were the main drivers of European solar PV market development.

... The situation is considerably changed now.

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CONCLUSION

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Observations and limitations

• Solar PV manufacturers international expansion is mainly market driven, according to the evidence provided by these two cases.

• The location choice is related to the market potential, possibility to improve brand image and government incentives.

• This study is conducted on a small base, only two cases were analysed and despite the good positioning of both companies in world rankings, these are not the largest examples.

• Further study should include more companies and ensure a better access to data.

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Future of Chinese Solar PV investmentsin Europe

• Currently, all Chinese PV companies are facing a grim situation in Europe for its recently released anti-dumping and anti-subsidy policies. The module’s price should be more than Euro 0.56 per watt and the module’s annual export from China to Europe should be less than 7GW, which means the Chinese companies will lose a big part of its competitiveness—the price.

• Several Chinese companies in these industry are shifting their market focus to other regions which are investing more in this sector.

1.What will be the future of EU in solar PV industry?

2.Is EU losing an opportunity in terms of investments attractiveness and R&D collaborations?

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