The long-term view: A look at the DOC trade case and PV supply chain dynamics with Motech VP of Sales and Marketing Derick Botha

Derick Botha
Derick Botha

Derick Botha is Vice President of Sales and Marketing for Motech Americas. Derick has over 15 years of experience in solar market development, sales and purchasing.

Derick began his solar career in South Africa as a Managing Director of Africa Solar where he was responsible for sales and operational management. He was then recruited by AstroPower to expand their African footprint and was quickly asked to join the management team in the United States. Subsequently, Derick joined GE Solar when it acquired AstroPower. In 2009, after he left GE solar to join Motech as VP of Sales and Marketing, Derick led the acquisition of GE Energy’s solar division by Motech Industries. Motech Americas has manufactured solar modules in Newark, Delaware since 2010.

 

Solar Server: Can you tell me a little about the history of Motech?

Derick Botha: Let me give you a little of the story behind Motech. Motech is the biggest cell producer in Taiwan, and is probably one of the original cell producers in the industry. At the start of the industry you probably had, pure-play cell producers, you had Q-Cells and Motech.

Motech was established before Q-Cells and we are still around, and one of biggest producers of solar cells. I think we are listed as number 5 in the crystalline silicon sphere, and we since 2010 are producing solar modules. In 2009 we decided that we would move into the solar module field, and we purchased the assets of GE, the GE manufacturing facility in Delaware, and with all the technology that they had, and all the experience.

The facility actually already had 20 years of experience in making modules, they had made modules there also previously under a company called AstroPower, which was a very innovative U.S. solar company, which was the first solar IPO in the world, and also unfortunately the first solar bankruptcy in the world.

GE purchased the assets, they ran the company for five or six years, they were a big customer of Motech's. Motech decided to get into the module business, and at the same time GE was planning on selling the facility, so we purchased it.

At that time we also established a facility producing modules in China, and also a facility in Japan. So today we produce modules in three locations: Japan, China and the United States.

 

Solar Server: Motech has made a wide range of products, from cells and modules to inverters and test and measurement equipment as well. Can you talk about the evolution of your multiple product lines?

Derick Botha: Motech started with test and measurement equipment, we no longer have that. That was the original product line. It doesn't fit into the portfolio, so it is no longer part of the company. The cells were the original business, and we still sell to many producers of  solar modules. And of course the inverter side is a little different, it is an electronic component, but was borne out of the test and measurement side, and that is primarily a residential product.

In the United States, we only do the modules side. So that's the only part of the business that we get involved in at this stage.

 

Solar Server: As Motech produces cells in Taiwan. Can you talk about how the recent preliminary rulings from the DOC have affected Motech's cell business?

Derick Botha: Motech doesn't only produce cells in Taiwan, we produce two-thirds to 75% of our cells are produced in Taiwan, and the balance are produced in China. Probably since the ruling we have found that there has been an up-tick in demand for products from Taiwan. So capacity seems to be fully utilized at this stage.

 

Solar Server: And have you seen a corresponding increase in prices?

Derick Botha: I'm not aware that there has been a significant increase in prices.

 

Solar Server: Motech has grown rapidly in recent years across product lines. Can you talk about this experience, and the challenges of rapid growth?

Derick Botha: Motech from the last few years has ramped up from, from 2009 we shipped about 360 MW, in 2010 we went up to 900 and 2011 was just over 1 GW of product shipped. I think some of the challenges there are, in order to ramp and maintain quality, which we were able to do successfully. I don't know that there are any challenges that came up that negatively impacted the company. The only other one is the cost of materials, which have always fluctuated in the industry.

 

Solar Server: Can you talk about coping with material price fluctuations?

Derick Botha: This is really more a topic for our team in Taiwan, but I'll make some quick comments on it. I think it's a global problem, that you've had fluctuations in the price of wafers, which is the input material into a solar cell. That has probably over the last five years bounced around, gone from low prices to high prices again.

And also an availability of product over that period as well. There were shortages, that was just a matter of capacity ramping up and wafer production. Dealing with that, a lot of companies tried to fully integrate. Motech's approach was not to fully integrate, but to try to more intelligently integrate the supply chain, by not producing all our wafers but having a blend of own production and purchased materials.

 

Solar Server: That's really interesting that Motech took that approach when the Tier 1 Chinese players were all focused on vertical integration.

Derick Botha:
I mean, it's just the bouncing around of demand, and one found that in the marketplace you could probably purchase wafers cheaper than you could manufacture them. Definitely now. So we were able to deal with that flexibility.

 

Solar Server: To shift to markets, what does Motech see for the U.S. PV module market?

Derick Botha: that this year there is going to be growth over last year. I would estimate that the growth could be around 20-30% over last year, could be as high as 50%. And it's been the function of a variety of things, probably the big rush of the 1603 grant program, a lot of safe harbored equipment has gone in. That could possibly be force-fed into the system.

Then in addition to that, again, the plummeting of the prices. Last year the prices were probably in the USD 1.50 range, this year some players have irresponsibly probably been selling in the low 0.70's. That eventually is damaging to the market in today's climate.

Not to say that USD 0.70 won't be a price at some stage, but I think today it is unrealistic.

 

Solar Server: Anything we haven't talked about that you feel is important for our readers to know about Motech and your business in the United States?

Derick Botha: I think one very critical thing about Motech is that we are probably one of the few companies today in the United States that has a module that has its own cells in it. So the product as it comes together is all Motech product.

Another thing that is really, really important is reliability. We have history on this product that goes back 20 years. There are very few companies today in the solar industry that have that kind of history. Most of the solar companies today weren't around six years ago, and maybe seven years ago they were producing garden lights, and are now starting to produce modules.

So we do have that history, that long history, and were able to trace and track where the modules have come from. What the reliability is like, what the performance is like. I think that is a big differentiator.

With the anti-dumping, my concern would be products that came in from some manufacturers that had their cells in prior to anti-dumping and today don't have their cells in, because they have had to replace them with cells from Korea, Taiwan or Japan.

Are those products certified? Have they gone through all the testing? Are the data sheets still valid? Do all the components work together? I think that's a question that's still to be answered. And one that not many are bringing to the floor.

Motech is not jumping up and down for joy because of the anti-dumping, although it is a short-term benefit, we understand that over time it goes away, because the manufacturers who might be buying  from us today will find their own sources, in-house sources elsewhere, whether it is Taiwan, Malaysia, or Korea where they have established manufacturing facilities.

So this is short-lived as far as we are concerned. And so we have to find our own markets.

 

Conducted by Solar Server International Correspondent Christian Roselund on July 12th, 2012