Tongwei Solar: The Biggest Solar Company You’ve Never Heard Of

Who The Hell Are Tongwei Solar?  The Good, The Bad, And The Weird.

Tongwei Solar is not well known in Australia.  While it’s possible goldfish fans are aware Tongwei Group is the world’s largest producer of fish food, their solar subsidiary is very low key.  This is despite it being one of the world’s largest producers of solar cells (if not the largest) with a production capacity of 12 gigawatts.  To put that in context, they produced more solar cells last year than have ever been installed in Australia¹.

There are two main reasons why nearly no-one here has heard of Tongwei Solar.

1. While they produce around 350 megawatts of solar panels a year, they are not sold in Australia and aren’t on the CEC’s approved list.²
2. Apart from making a quantity of solar panels that’s small compared to the giants of the industry, they don’t appear to do anything other than purchase silicon ingots from other companies, slice them like salami, turn them into solar cells, and then sell them to panel manufacturers.

While some companies are vertically integrated and produce their own silicon ingots, cut them into solar cells, and then make solar panels, Tongwei Solar’s focus is mostly on producing solar cells.  They clearly believe solar power will continue to grow as they claim in 3-5 years they will have 30 gigawatts of cell production capacity and supply over 10% of the world demand.  If they’re correct and supply 11% of demand, that would mean in 3-5 years world solar panel production would be 270 gigawatts compared to the estimated 104 gigawatts installed last year.

According to their website, Tongwei Solar has the most streamlined organizational structure of any company in the world.

Company Locations

Tongwei Solar has cell production capacity in two locations:

•  The Western China megacity of Chengdu, which is a massive city of 14.4 million people.  That’s greater than half Australia’s population.
• The puny megacity of Hefei in East China with only 7.9 million people.  That’s not even one-third of Australia’s population.³

While China makes the best Westerns, in a pinch Korean ones will do.

Both these facilities are in coal producing regions — or at least they are if my knowledge of Chinese geography is correct.  Unfortunately, my ability to locate things in China is a bit messed up.  Firstly, because China scrambles locations in Google Maps to reduce the accuracy of my missiles, and secondly, because my geography lessons went like this:

“And here is the small Swedish village of Pippilangstrumpia where I was born.  There’s also another country over here called China, but it’s a long way from Europe and won’t be on the exam.”

Tongwei Solar’s factories are located in coal producing regions because that’s where energy is cheap⁴ and it takes a lot of energy to make the silicon ingots that are cut into solar cells, so that’s where they’re made.  This makes transporting the silicon ingots from the producers to Tongwei Solar and hauling the silicon waste back for recycling a lot easier.

Company History

Tongwei Solar was apparently created in 2009 and began producing solar cells on a large scale in 2013, but the company got its start back in 1983.  This snippet from their website describes their early days:

While having a “metal cage culture” may sound bizarre, what they are actually talking about is farming fish in cages.  They have continued to expand in aquaculture and are now the world’s largest producer of fish food.  They also produce other animal feed products, so if you  wanted to be paid in chicken feed they can arrange that.  They also produce pet food, which is an expanding market as around 7% of Chinese households now own dogs.

It may seem strange that fish people become one of the world’s largest producers of solar cells, but when a country is rapidly industrialising things like this happen a lot.  Toyota started off making automatic looms until they figured out they could put wheels on them.

Tongwei Solar has won many awards from many sources, but I’m pretty certain the one in the middle is not from the SS.

Company Video

Tongwei Solar has a 7 minute video that tells you very little about them.  If you want to you can watch it below. (UPDATE: the video is no longer available).

In the video we learn important things such as:

“As mankind strives jointly for sustainable development we see the change of the world and hear the call of human being.  We look forward to the wonderful life in the future.”

I know I see the change of the world whenever I look through my coin collection and I often also hear the call of the human being.  Sometimes the call of the human being keeps me up all damn night.

See the change of the world.

But one thing I found disappointing about the Tongwei Solar video and website was the lack of a company song.  Chinese company songs are amazing works of art.  They’re right up there with Meatloaf and Beethoven⁵  They’re so good they could be Meatloaf and Beethoven’s mutant love children.

To remedy this lack I’ve written a company song for them.  I put a lot of work into it and I think it really gets to the heart of their dedication to cutting silicon ingots into solar cells.  It goes well with a number of tunes and maybe you can pick one from this collection of melodies.  I look forward to one day hearing all 6,000 of Tongwei Solar’s employees singing it in unison.

Potential Company Song — Silicon Cutter

Cut your silicon ingot, silicon cutter,

You’re a solar cell making master, silicon cutter,

You’re a silicon cutter, yes, it’s true.

Nobody cuts silicon quite like you.

 

Cut your solar cells, silicon cutter.

You’re the one who cuts so well, silicon cutter,

You don’t eat or sleep or mow the lawn,

You just cut your silicon all day long.

 

Cut your silicon ingot, silicon cutter,

You’re a solar cell making master, silicon cutter,

You’re a silicon cutter, I must say,

You cut your silicon yesterday,

Silicon cutter, Tongwei!

Ideally they would get Terrance and Phillip to perform the song.

Future Plans

At their Hefei plant Tongwei Solar is currently constructing 10 additional gigawatts of monosilicon solar cell production capacity that’s due for completion in 2020.  Currently, half the world’s silicon solar cell production is lower cost polysilicon.  The new capacity is part of the worldwide shift towards more efficient monosilicon and will bring Tongwei’s solar cell production capacity up to 22 gigawatts.

Tongwei Solar says in 3-5 years they will have 30 gigawatts of capacity and their revenue will be 30-50 billion yuan.  At current exchange rates that’s $6.3-10.5 billion.  While I have no problem believing they will produce that many solar cells, as far as I can see the revenue from even the middle of that range — which would be $8.4 billion is way too optimistic.

At the moment monosilicon solar cells sell for around 25 cents a watt, so even if prices stop falling and all their production is monosilicon, the maximum amount of revenue they could get from 30 gigawatts of cells is $7.5 billion.  They make around 350 megawatts of solar panels but their additional sales value is only around $50 million so we can round that up to $7.6 billion.  Tongwei may have good reasons for believing the price of solar cells won’t fall over the next 3-5 years, but I don’t see how it is possible for them to get the $10 billion or more in revenue they say is possible.  Chinese inflation is subdued at the moment, so accounting for that can’t make the higher end of Tongwei Solar’s revenue estimate realistic.

If I could read Chinese perhaps I’d find information that would make their overly optimistic prediction seem reasonable.  But I doubt it, because that rarely happens with companies that write everything in English.  While Tongwei Solar’s claim is far from the most ridiculous I’ve heard from a large company, it does rub in the importance of doing exhaustive research if you plan to do business on a large scale with a Chinese company.  This research should include hiring a Chinese Private Dick to check out their bona fides.  It also includes hiring an additional Dick to check out your original Dick to ensure you haven’t been exposed to a compromised Dick.

While their revenue estimates may be off, Tongwei Solar’s expanding capacity suggests I am correct in my firm belief the world is going solar in a big way.  Their silicon cutting is likely to contribute to the production of many different brands of solar panels without the people buying them ever realising it…

…unless they care to study this picture from the ‘partners’ section of the Tongwei Solar website: