R&D, Varied Portfolio Make Solar Inverters a Success

Q: What is GoodWe’s position in the Mexican market?

A: After Brazil, The Mexican market is GoodWe’s second-largest market in the Americas. We have been selling our inverters in the Mexican market for about four years, focusing on the residential segment. The company has a service center in Monterrey. Last year, we sold around 100MW in the country. Our plan is to expand in Mexico, however. While we are not planning to invest in factories, we are considering an expansion of our service center and starting to see Mexico as a platform for the North American region. An important development was that we started doing business in the US, hiring a country manager and having our R&D team design products for that market. We will target the Mexican market as part of the North American market, due to the many similarities. GoodWe also has a strong presence in South Africa and Europe.

Q: What is the main reason that GoodWe has a stronger presence in Brazil compared to Mexico?

A: Both Mexico and Brazil have vibrant and resilient markets. Mexico is facing some clear challenges in terms of government policies. Brazil had similar discussions half a year ago, but the government turned out to be more supportive. The quality and reliability of our residential products is recognized in the Mexican market. On the C&I space, there is still plenty of room for growth. We have been successful in the residential sphere, but we want to have a greater presence in the C&I area. Brazil has easier regulations because it essentially copied the European framework, which we already comply with. Furthermore, Brazil has a larger economy and population.

Q: What shifts has the company noticed in energy demand, translating to changes in demand for its products?

A: It has been a tough year. At the beginning of the year, the main concern for the solar sector worldwide was its supply chain in China. Chinese industrial capacity is back at over 80 percent, solving the issue. Our own factory has been working at 90 percent since April. However, demand has definitely been affected by COVID-19, although recovery has accelerated across the solar markets, especially after the summer.

We are seeing some strong markets, with Australia and Europe rapidly bouncing back. Latin America slowed down perhaps reaching the bottom in Q2 but since August we are seeing a rapid recovery across strategic markets such as Chile, Colombia and remarkably as well Central America and the Caribbean.

Q: How is the company assessing the government policy for distributed generation in general and the company’s business in Mexico specifically?

A: Last year, I was somewhat wary about the Mexican market. After attending exhibitions and seeing our volume of sales here, I concluded that the Mexican distributed generation market is resilient. Despite the somewhat hostile attitude of the government toward renewables in general and solar in particular, the fundamentals of the market are strong. These are related to the relatively high electricity tariffs for the commercial and industrial segment. Many offtakers in this segment are quite desperate to find more sustainable and cost-effective sources of energy. Regardless of the government’s position, I think that natural demand ultimately drives the market, which remains large. Of course, the utility-scale segment has been impacted significantly, but this has had no notable effect on our business, the distributed generation market is still very strong. Exhibitions are packed and appetite is large. The government would need to implement a heavy subsidy for electricity to halt this trend, which is unlikely.

Q: What are the added values of GoodWe’s storage solutions, integrated with its inverters?

A: Last year, Wood Mackenzie figures showed that we were one of the largest global suppliers of energy storage inverters, making us a leader in the segment. Starting in 2021, we will be introducing these energy storage inverters to the C&I sector as well.

There are two key factors driving the energy storage trend worldwide. One is security. Some countries have unstable grids, so homeowners want to improve their energy security independently. The second factor comes from people facing varying energy tariffs. For example, at 7 p.m., tariffs can go up, so the energy storage inverter helps to achieve “peak-shaving.” This is done by using power stored within the battery at these times. GoodWe has years of expertise in using inverters to solving these issues, with solid results across different markets. For the C&I sector, GoodWe will have inverters with a power range from 50KW to 100KW ready by Q4 this year, expanding the benefits to larger-scale energy users.

Q: How is the company investing into R&D to stay on top of developments for distributed generation?

A: R&D is an essential part of the business. Out of our roughly 1,000 employees, around 15 percent are R&D engineers. We have a team at our headquarters in Suzhou that is completely devoted to the topic. We have a similar team in Australia as well, who are helping us by developing software and power electronics. GoodWe spends a good amount of its revenue on R&D as well, amounting to around 10 percent in China. Energy storage is one of the priorities, but we are moving in very different directions as well. This includes software development, improving our monitoring system called Smart Energy Monitoring System (SEMS) and outfitting it with new functionalities developed for the industrial segment. We are also developing software to monitor home load consumption. New protections are incorporated into the inverters to meet new regulatory standards such as UL.

An example of a new development would be the company’s HT Series String Inverter. This incorporates Remote Monitoring, one of the strengths of this series. It has many other advantages, however. Firstly, we incorporated more sensors, including for weather, current connections and humidity, because the conditions in which the inverter operates are more challenging.

Q: How is GoodWe working to become the top global inverter company?

A: Other than fostering strategic partnerships and investing in R&D, we are working to develop new products for different segments of the market. The strength of GoodWe is that it develops solutions for different scenarios. We have a vast portfolio of inverters. Together, they cover a significant range up to 80KW. With the HT Series, we are expanding to the utility scale as well. We provide inverters for the energy storage segment as well, and are launching our own battery line in the near future. This will happen by the end of 3Q20. Software is another priority for the company to add further value. All in all, our approach is a combination of factors. GoodWe is already recognized as a leader, boasting very reliable quality among Chinese suppliers, even though competition is fierce. We are a trusted partner for the long term, which is why our buyers and associates trust us.

Q: What are the company’s goals for the 2020-2021 period?

A: Our goal is to continue the strong trends of the business. I trust GoodWe will close the year in good shape. The main goal for 2020 will be to maintain the relationship we have with our strongest counterparties and to expand upon them. We have been successful in this regard, fostering partnerships with big players in the industry, such as Krannich Solar and General Electric. This is significant in a year full of challenges.

Thinking about 2021, we want to see how the pandemic evolves. Many thought it would blow over by summertime, but it is now clear we will face it for a much longer period. The target, therefore, will be to keep our strong relationships and grow at a moderate pace, while reaching new promising markets such as in Africa or the Middle East. Our development here has been positive, and we want to consolidate our growth there.

GoodWe focuses on research and manufacturing of PV inverters and energy storage solutions. Its solar inverters, incorporating storage options, are largely used in residential rooftops, but cover commercial industrial and utility-scale projects as well.