TRINA SOLAR, CHINA: The Largest Solar Module Manufacturer

By Makarand Gawade, Staff Writer

trinasolarlogo_bronze_sponsorThe solar power market is characterized by evolving technologies and standards that led to improved features, such as more efficient and higher power output, improved aesthetics, and smaller size panels. Trina Solar (TS) has been very successful in all these aspects, and thus achieved an unprecedented success in the solar industry within a span of 17 years since its inception. Today, TS is the world’s largest solar panel manufacturer. TS employs a global strategy which depicts strong yet flexible central direction from China, and efficient global coordination. This has facilitated TS to develop and manufacture solar products and technologies centrally, and launch them promptly in international markets. Through global strategy, TS is rapidly expanding its global footprint, and has already established a customer base exceeding 500 in over 35 countries.

According to Porter’s five forces analysis, solar industry is a very competitive space, and a low profitable business. However, TS overcame this challenge by adopting the vertical integration strategy to achieve a sustainable low cost competitive edge over its competitors. Through vertical integration, TS was able to capture the value in this business by controlling the complete manufacturing value chain. Country specific advantages also played a significant role in TS’s evolution, and these advantages are captured by the Diamond model, which suggests that the national home-base of an organization plays an important role in shaping the extent to which it is likely to achieve sustainable competitive advantage globally.

TS entered the solar space at the introduction phase of this industry in China. Thus, TS was able to achieve the second mover advantage since the European and US solar industries were already in the growth phase. However, TS did not limit itself to mere reverse engineering, and last year the company created a high-efficiency Photovoltaics (PV) module, which is a world record. This achievement positioned the company at the forefront in solar technology innovation.Trina Diamond

Success factors: Following are some of the major success factors for TS in the solar space.

Country Specific advantages (Diamond Factors): Unlike many emerging markets, China offers a unique value proposition for renewable energy firms. The Chinese government created a favorable policy environment intended to meet a greater portion of the country’s growing energy needs from cleaner sources, while also driving a demand for domestic solar panel manufacturers. China offers lucrative feed-in-tariffs to utility-scale power plants and distributed generation installations. China provides free grid connectivity for small and medium-scale distributed PV solar power producers.

Furthermore, TS also has other home country advantages such as a protectionist government, cheap skilled labor, strong local demand amidst country’s growing energy needs from cleaner sources, and R&D support through national universities and institutions.

R&D Focus: TS is one of the few Chinese solar companies focused on improving solar cell efficiencies. TS’s investments in R&D have increased heavily from US$ 2.8M in 2007 to US$ 44.12M in 2011. Last year the company created high-efficiency cell and module world records, which has positioned the company at the forefront in solar technology innovation.

Source: Trina Solar

Vertical Integration: TS has vertically integrated its entire manufacturing supply chain from its monocrystalline ingots, to its wafers/cells, all the way to its solar panels. This degree of vertical integration enabled TS to achieve economies of scale and derive a low cost competitive advantage.

In a nut shell, many solar companies have not survived long in this fiercely competitive space, but TS is proving itself to be a formidable force in the industry. The company has successfully created superior brand recognition globally, and is rivaled only by a select few. Today TS stands at the frontier of photovoltaic panel efficiency innovation, and the future of the company looks extremely promising.



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