Compared with nearby Japan, mainland China and Taiwan, South Korea did not show outstanding solar market situation. The atmosphere in Green Energy Expo 2017 in Daegu (South Korea) was relatively ordinary. EnergyTrend interviewed several important manufacturers who attended this expo, in order to understand their ideas regarding this tradeshow and the South Korean market. Based on the interviews, solar panels require “KS” certification from South Korea so as to sell in this nation. Whether or not a solar product displayed at the tradeshow has KS certification diversifies these international manufacturers' attitude.
Chinese exhibitors: either commercialization-oriented or new technology-oriented
China’s solar product capacity occupies more than 70% share globally. Likewise, it has a place in the Korean market. EnergyTrend has interviewed five relatively larger exhibitors from China, in order to understand their reasons & results of showing at Green Energy Expo 2017, and their opinions toward the Korean market.
Seraphim Solar System, who continuously promotes its Eclipse module series, expressed that Eclipse module had been well-received by Korean customers last month in PV EXPO 2017 in Japan. This module got many inquiries during that expo, and Seraphim begun to discuss with several Korean manufacturers. Seraphim explained, the Eclipse module not only possesses special technology, but also provides better cost/performance ratio than its Korean rivals. Therefore, Seraphim has opportunities to enter the Korea market.
Hareon Solar Technology Co., Ltd. has cultivated the Korea market for three years. Hareon Solar's reason to present in the expo is to make its forward-looking technology stand out. Regarding to Hareon’s KS-certified products, complete information is available from its official website.
In contrast, two giant manufacturers from China, JA Solar and Jinko, both focused on demonstrating their KS-certified products.
JA Solar’s purpose of attending in Green Energy EXPO is brand promotion. Frankly, JA Solar admitted that marketing result was limited due to fewer visitors. It pointed out, although new technology attracts attention, sales are not guaranteed and the market response isn't surely going well.
Jinko aims to reach 10% market share in the global market. The Korea market is no exception to that goal. In order to seek better market share, Jinko's exhibition also centered on its KS-certified modules. Jinko also felt that this expo did not attract many visitors. This expo helped Jinko get a hold of existing customers; however, with limited facilitation in terms of striking new deals.
HT-SAAE's exhibitions were both commercialization- and technology-oriented. It presented two KS-certified Highway modules, and new technologies including MilkyWay glass-to-glass bifacial n-type multi busbar (MBB) modules and n-type PV cells. HT-SAAE has recently started to cultivate the Korea market, and already began to discuss about several projects in Korea. It might enhance its presence in the role of EPC or module suppliers. HT-SAAE get a booth this time so that it can develop the new market.
Korea's solar market has been dominated by domestic providers and is somewhat closed off to foreign competition. How international manufacturers earn trust from Korean consumers? Seraphim, Hareon Solar and JA Solar all agreed that Chinese solar products offer better cost/performance ratios. Moreover, because Korean customers began to re-gain a sense of the international brands and their qualities, the future could be very bright. Jinko and HT-SAAE both have collaborative partners in Korea, respectively.
Equipment and domestic suppliers: managing customer relations
Schmid is the largest equipment manufacturer in the expo. It showed LG's co-manufactured MBB module and Schmid's own montrac equipment. The latter can be used to upgrade smart factory in various industries, such as solar energy or the automotive.
Schmid told EnergyTrend that its major goal in the show was not to make new deals. Rather, it was to strengthen its customer services and marketing. Schmid expressed that it is not easy to manage solar power business in Korea. Nevertheless, Schmid believed that the new admiration of Korea will show more positive attitude for green energy, so the future outlook is good.
Domestic manufacturer Shinsung E&G emphasized its determination of showing in the expo. 2017 is the 40th anniversary of Shinsung. Shinsung also integrated its related businesses to create a new brand name "Shinsung E&G". Different than giant groups (Hanwha Q CELLS or LG), Shinsung is a company who focuses on solar power. Therefore, Shinsung is necessary to present itself in the expo.
|Shinsung's bifacial mono-si PERC cell.|
Shinsung's products concentrated more on newer technology when compared with other exhibitors in Green Energy Expo 2017 in Daegu because Shinsung's exporting share hit as high as 80%, while advanced technology is the key to win the competition in the international markets.
Based on Shinsung's experiences, the domestic market in Korea values product prices more than advanced technology. Moreover, electricity price has stayed low, so benefit of solar electricity is not attractive enough. The low electricity price indeed impacts the Korea market's perspective toward solar products’ price.
“Solar power market demand fluctuates dramatically, but Korea solar market demand has remained stable,” told a representative of Shinsung to EnergyTrend. With the stable status quo, Shinsung is observing the presidential election and upcoming administration's policies, in order to look for new developmental opportunities.
|Cherry blossom blooms outside of Daegu EXCO, venue of the Green Energy EXPO 2017.|
Technology-wise, there are manufacturers such as Hanwha Q CELLS, LG, Samsung SDI, OCI, Woongiin and Shinsung in South Korea. Their industry chain covers from the upstream to downstream. In terms of capacity, Hanwha Q CELLS proactively develops and actually occupies quite some share globally. Other than these manufacturers, entire Korean solar industry's development is rather ordinary.
The Korea market's annual demand comes to about 1GW, with the occasional high at 1.5GW, base on EnergyTrend's understanding. Korean government's attitude hasn't been active in the green energy segment. Since Korea's electricity price is not high, solar power gains limited popularity. Thus, solar energy requires promotion in aspects of governmental policies and conceptual acceptance.
The Korea will elect its new president in May. This creates a new opportunity for the market. Shinsung, HT-SAAE, Seraphim and Schmid all expressed similar opinion about this: the next administration might turn more positive toward green energy, so solar energy industry might become more prosperous. JA Solar and Jinko both agreed that the Korea market demand will stay stable, at least.
Price preference wise, in the Korea market, spot price of a KS-certified product is closely correlated to its demand. This opens a new opportunity for Chinese manufacturers. If successfully receiving Korean customers' favor, Chinese manufacturers' advantage in prices exactly matches the sweet point of the Korea market. In addition, technical difference offered by Chinese manufacturers is also a key to win orders.
From Korean manufacturers' perspective, at the price war against the Chinese, in order to maintain Korean domestic market share, the Korean must improve its cost/performance ratio. The same rules apply to the rest of international rivals.
However, it is realistic that the Korea market demand roughly remains stable on a small scale. How much effort to put into this market and how effective the result will yield will need careful evaluation.
(Reported by Rhea Tsao, chief editor of EnergyTrend. Translated by Janet Chen, a translator at TrendForce Corp.)