In a series of mergers and acquisitions and new product launches, Carrie Xiao of PV Tech reflected on the current status of the tracker market, the fate of Chinese tracker manufacturers, and the market that will become more competitive in the future.
There was news last week that the two module manufacturers had made strategic investments in tracking companies, which means that competition in this particular sub-industry seems to reach new highs.
This news has carried out a broader strategic reorganization of photovoltaic power generation systems and large-scale component ecosystems, and the prominent role of trackers seems to be strengthened. While new entrants are accelerating their development, mature industry giants and leading module manufacturers are also competing for market share.
Although there used to be a large number of tracker manufacturers operating in China, China is a highly competitive market and only a few have been able to make progress.
The rise of Arctech Solar and subsequent IPO, as well as Trina Solar's acquisition of Nclave, caused some breakthroughs and ushered in a new era of tracker brand awareness. With other major component companies taking similar measures, Trina Solar has been promoted to launch a combination of its high-efficiency components and intelligent tracking structure, hoping that this will bring it a competitive advantage.
Tianhe considered two factors when designing its products. One is to reduce system costs, optimize product design, use less materials, and achieve more efficient installation and operation and maintenance. The other is product life cycle management, where the failure rate of the tracker is reduced to increase the return on investment.
Jason Duan, managing director of Trina Solar's tracker division, told PV Tech that its tracking structure can improve power performance, thereby further improving system efficiency and profitability.
By the end of this year, Trina Solar will cumulatively deliver more than 6GW of trackers and ship them to more than 400 photovoltaic projects in more than 30 countries. Its performance in this field has aroused the interest of peers and other market participants. Although JA Solar and Canadian Solar have already invested in JSolar, it is understood that other major component manufacturers are also considering investing in this area.
As mergers and acquisitions increase, the tracker market will inevitably accelerate and become more competitive. But what is the market outlook?
According to the renewable energy team of the investment bank Haitong Securities, each watt of photovoltaic system is 0.62 cents, the fixed structure is priced at 0.047 cents/watt, and the profit is 0.0031 cents/watt. However, the price of the tracking structure is 0.094 cents/watt, but the net profit is 0.007 cents – 0.009 cents/watt.
At an average price of 0.07 cents per watt, the tracker market—compared to the solar market with approximately 200GW of installed capacity per year—will be worth approximately $14.1 billion, roughly equivalent to the value of the solar inverter market.
Arctech's recent earnings report also proves this, which shows that in the past three years, the gross profit of the fixed and tracking structure has increased on a per watt basis, while the price per watt has remained relatively stable.
At the same time, the potential of the tracker is also being proven by its increasing market share. Double-sided modules are now widely used. Compared with fixed tilt systems, they increase the weight of tracker technology and increase power gain by 10-25%.
Trina Solar collected and compared power generation data from fixed tilt and tracker installation components for a project in Tongchuan, China. Data collected after a year of operation shows that although the land space occupied by the single-axis tracker has increased by 20%, its system LCOE has decreased by 1.43-2.39%.
Wang Sicheng, a former researcher of the Energy Research Institute of the National Development and Reform Commission of China, took the Qinghai UHV project as an example. The project was able to reduce its LCOE by 0.023 cents/kWh by adopting a tracking system on a fixed inclined structure.
IHS Markit predicts that since about one-third of ground-mounted solar photovoltaic installations currently use trackers, the capacity of systems with trackers will exceed 150GW between 2019 and 2023. In other words, trackers are now more and more widely used overseas, and their penetration rate in some markets has reached nearly 70%.
Due to rising penetration rates, overseas tracker manufacturers are currently performing better than their Chinese counterparts. According to Bloomberg New Energy Finance, the leading vendors in 2020 are Nextracker, Array Technologies, STI Norland, Arctech Solar, PV Hardware, GameChange Solar, Soltec, NClave (Trina Solar), FTC Solar and Idealec. In this list, only two are located in China.
From another perspective, compared with module and inverter manufacturers, tracker companies still have a lot of room for development.
Solar energy projects and association trackers are moving towards intelligence, and now the trackers for each project are highly customized and integrate more advanced technologies. Analyze terrain and location information during the structural design of each project to find the ideal solution. This puts forward new requirements for manufacturers. They now need to have extensive experience in project management and operation and maintenance, as well as a strong R&D record.
"Trina Solar acquired 51% of Nclave in 2018 and 100% in 2020. Nclave is a mature tracker manufacturer with many years of experience in power plants. Through this acquisition, we have acquired 15 years of Tracker development experience,” commented Sun Kai, R&D department. Director of TRW Tracker Division. Tianhe currently has more than 80 patents, of which 35 are valid patents and 17 are valid invention patents.
After establishing a complete after-sales support system, Trina has tracked 58 specific projects from around the world within five years, and the results show that its product failure rate is lower than the industry average.
In order to have a clearer understanding of the application of its own tracker structure, TRW compared the performance of the fixed inclination angle and tracker structure, and conducted a test on the same terrain in Tongchuan, one of the so-called "front-runner" projects in China. One year Power generation data shows that, compared with the traditional tracking structure, Trina’s SuperTrack technology has achieved a plant-level power gain of 3.06%, and a single train’s maximum power gain of 4.86%.
The combination of TRW's high-efficiency module and tracking structure system has also been recognized overseas. The European Research Institute Fraunhofer ISE has calculated the LCOE of mainstream ground power stations. These factories are equipped with next-generation large-format 210 mm and 182 mm modules and IP tracking structures. It was found that the combination of the 1-axis IP tracking system and the double-sided module achieved a power gain of 1+1>2, which significantly reduced the LCOE, thereby achieving a higher return on investment.
Jason Duan continued to emphasize to PV Tech that pursuing high standards in technology and quality is the company's consistent goal. As an industry leader, Trina Solar’s mission is to reduce system costs through design innovation and increase power revenue for customers.
Speaking of the Chinese market, Duan said: “Trina Solar’s global production capacity has exceeded 6GW and is ready to meet the needs of various application scenarios in China. The Chinese market has not yet fully understood and accepted trackers. The industry has borrowed from general construction standards and has not considered The characteristics of photovoltaic power plant design specifications, load standards, structural safety and intelligent control functions. This is not only detrimental to the owners, but also detrimental to the development of the entire industry. Therefore, we need to continue to work together to make changes."