Solar Server interview with JinkoSolar’s Chairman Xiande Li on the company’s 10th anniversary and the PV industry

2016 is JinkoSolar’s 10th anniversary. Solar Server delivers an interview with the company’s Chairman Xiande Li, discussing the achievements of the solar PV industry over the last ten years and JinkoSolar’s vision.

 

Solar Server: What are the Company’s key achievements in the last 10 years?

Xiande Li: It is important to acknowledge the role that JinkoSolar is playing today in maintaining both economic and technological progress in the solar PV industry.

We are a pioneer in vertically integrated business model compassing from wafer, cell, module, system, to solar plant development. This allows us to drive down costs and maintain profitability while other failed. Jinko was the first company to recover from a negative margin in Q2 2013, and has secured the No.1 position in gross margin for 14 consecutive quarters.

Then there is JinkoSolar's actual performance. The market leader has climbed to the No.1 position among all module manufacturers worldwide in the first quarter of 2016 in terms of shipment (1600MW), revenue (RMB 5.47 billion), gross margin (21.3%), and net profit (RMB 313.3 million). Moreover JinkoSolar has become the largest manufacturer with a capacity of 6.3-6.5GW in 2016.

What are the Company’s advantages over others?

Xiande Li : We stepped in to this industry in 2006. We started producing solar module in 2010, and our market share has gone from zero at the beginning to roughly 7-8 percent in 2015. In addition, we never sacrifice profit to boost sales. What enabled that? Technology and Quality. Someone said European or US companies are strong in leading technology- that is what they are best at. It’s a wrong assumption. Cost per watt is one of the critical criteria to judge the real value of solar PV technology. Anyway, ultimately let competition take its natural course, and let the customers pick the best, the most advantageous products.”

 

What vision do you have for the future?

Xiande Li : I feel optimistic about the future of the industry. A new record has been set for world’s cheapest solar energy in June in the UAE of 2.99 cents/k Wh, solar is now undercutting coal and is about to replace coal to become the primary energy source.

In Great Britain, the government has just put the plans to build the long-anticipated nuclear power plant Hinkley Point C on hold because they expect solar energy to be cheaper by the time the nuclear power plant is built. It is only a matter of time until renewable energy becomes a global preference.

 

What view do you have on the coming demand crisis?

Xiande Li: I don't think this cycle has been fundamentally different from any others in the industry, except in terms of its degree. The plunge was very steep and very quick. Then the surge was steep as well. If you take 100 as the base, things dropped to 30 or 40 very suddenly, but then demand shot up to 200 just as fast. So it was severe, but it was over very quickly.'

 

Tell us about the Company’s strategy in the future, please.

Xiande Li : Our core optimism expresses itself in technological terms, particularly the drive to commercialization of higher output modules, for example 334.5watt for 60 poly-cell module.

In the longer term, I’m looking to establish JinkoSolar's role as a solar plant developer. This has been reflected by an increasing focus on solar plant development and energy service providing as its core businesses.

 

The Company’s growth story is miraculous. Can you tell us more about that?

Xiande Li : We’ve started in 2006 as a small company and at the beginning the industry didn't pay much attention to us. They didn't think we were going anywhere. Later in 2009, we’ve begun to manufacture solar panels, and successfully listed in NYSE in May 2010. After that, we’ve caught up with the industry as well as the company started growing like bamboo shoots. 

 

And your cost structure?

Xiande Li : Our costs are more determined by the quality of R&D and production. In addition, capacity scale and complete vertically integrated modules also attribute to the cost advantage. 

 

Does Mono technology take over Poly technology?

Xiande Li : Mono has become a threat to poly due its dramatic decline of cost. However, mono is not perfect. First of all, its costs have almost dropped to the floor, there is no further room for more reductions. Secondly, the efficiency of poly is expected to increase to another new record, equal or even higher than average level of mono. 

 

How do you see the Company’s future under the current unstable global economy?

Xiande Li : I think the next year may not be very good, which is disappointing. We have built our company to last through all those difficult times though. Even when business is bad, we still grow and make profit, outpacing competitors.

 

And your view on competitors?

Xiande Li: We have always had competitors. They come and go. Some are in some ways more aggressive, and some have deep pockets. But JinkoSolar has something that is unique and leaves our competitors behind us.

 

Do you see an end to the current price pressure?

Xiande Li : I’ve never seen an end to price pressure. But our leading technology, superior production process, cutting edge factories, a complete supply chain and manufacturing scale give us a big advantage over the competitors, enabling us to achieve efficiencies that bring down costs. Technology and quality are our core competences to break even easier than our rivals. Even under intensive price pressure, we don’t think many makers will give up so easily, they are persistent in their money losing.

 

What are you expectations for solar panel’s overall demand in the future? 

Xiande Li: We predict the overall solar PV industry to grow this year, then stay the same or shrink a little next year, and finally accelerate expansion from 2018 onwards due to its cost undercutting coal on a global scale. The solar pv role at the center of energy becoming primary -- today and in the future -- is why I am strongly optimistic better years are ahead of us.