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

tongwei solar cell factory

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.

Tongwei Solar organization chart

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 awards

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:

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:

tongwei solar partners

Footnotes

  1. Roughly 10.5 gigawatts of solar panels have been installed in Australia so far, but I don’t think that figure includes losses such as crap panels dying after just a few years.
  2. This doesn’t necessarily mean there is anything wrong with Tongwei Solar panels.  It may just mean they haven’t been submitted for the basic safety testing that is required for sale in Australia because they’re not interested in selling them here.
  3. It’s as if they’re not even trying.
  4. Some people assume because the residential price of electricity in China is so much lower than in Australia the price of industrial electricity is also lower, but that’s not the way it works.  Generally speaking, large users of electricity pay more in China than Australia, although what large users pay here has increased considerably over the past couple of years.
  5. The literal translation of Beethoven is “Man who hoes beets” or possibly “beef oven”.
About Ronald Brakels

Many years ago now, Ronald Brakels was born in Toowoomba. He first rose to international prominence when his township took up a collection to send him to Japan, which was the furthest they could manage with the money they raised. He became passionately interested in environmental matters upon his return to Australia when the local Mayor met him at the airport and explained it was far too dangerous for him to return to Toowoomba on account of climate change and mutant attack goats. Ronald then moved to a property in the Adelaide Hills where he now lives with his horse, Tonto 23.

Comments

  1. Slow news day boys ?

    Nice to get some of the backstory on solar …….. and chinese company songs

    Recycleing of silicon from the slicing process – whats the turn around efficiency on that – not like dough – cant squidge it up an make a new ingot ???

    Theres a story 😂👌

    • Ronald Brakels says

      The waste has to be remelted and a new ingot cast. Cast probably isn’t the right term, but the right term is soooooo hard to spell — Czochralski process. There! I did it!

  2. Dave Roberts says

    Longi as a partner? I thought they produced their own mono silicon or their panels.

    • Ronald Brakels says

      Well, Longi produced a massive 7.2 gigawatts of panels last year so it’s possible their own monosilicon production wasn’t high enough. Longi could also be under contract to supply monosilicon to other producers. These kinds of odd seeming arrangements aren’t that unusual and can make things pretty confusing.

  3. Ian Thompson says

    Hi Ronald

    I was surprised to read your comment that Tongwei locates their factories in Coal producing areas “because that’s where energy is cheap”! What, from coal-fired stations? You’d have to wonder why they didn’t strike a deal, to have their own cells used in panels, then build a farm to supply their plant’s energy requirements “free from the sun”? Chicken & Egg?
    You did imply they pay more for industrial energy than we do.
    So what is going on – why has our own industrial energy recently increased, whereas what we need to become world-competitive is cheaper energy?
    What is the driver? Is our industry underwriting the cost of introducing renewables, so that domestic power prices don’t need to be increased so much? (it does seem that this is what is happening in China).

    • Ronald Brakels says

      Electricity is cheaper in the coal mining regions of China because China still generates the majority of its electricity from coal (not as large a portion as Australia though) and since the coal doesn’t have to be transported long distances or the electricity transmitted long distances it is cheaper there. Of course it’s only cheap in terms of what industry has to pay for it, not in terms of its health, environmental, or agricultural costs.

      New solar capacity is now cheaper than new coal capacity, but I don’t know if new solar currently beats the cost of electricity from existing coal power stations in Chengdu and Hefei. If it does then they will build solar farms to take advantage of that.

      Large users of electricity in Australia pay rates based on the wholesale price of electricity and they are high at the moment. Two main reasons for this are Australia no longer has an over supply of generating capacity thanks to the closure of 13 coal power stations over the past 7 years which was over 20% of Australia’s coal generating capacity and because of the more than doubling of gas prices in the eastern states as they rose towards international parity with the opening of LNG export facilities at Gladstone. Extra renewable capacity which could have eased the increase wasn’t built due to the Coalition removing the carbon price, cutting the Renewable Energy Target by a third, and discouraging renewable investment by making it appear they were to end the Renewable Energy Target at any time.

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