China is the world’s largest producer of photovoltaic modules, and so naturally has the largest demand for photovoltaic (PV) module materials. For a long time, China relied on imported key materials, but in recent years, all PV devices have been produced domestically, promoting the development of the upstream materials. Now, the fluoride films used in solar panels are extensively produced in China, and in some cases mass production has been achieved, to the surprise of the international market.
One such producer is Hangzhou Foremost Material Technology Co Ltd (hereafter “Fumotech”), a private company founded by overseas returnees. Our reporters interviewed Wang Peigang, the CTO of this tech-driven enterprise, at the “All Quality Matters” 2018 Solar Congress organised by TÜV Rheinland in Wuxi, Jiangsu. Fumotech broke the monopoly of imported fluoride films and was the main exporter of PVDF film shipment for two consecutive years. Wang Peigang said that Fumotech has focused on producing high-quality PV protective films over the past eight years, and was confident that in the future the brand will grow and flourish.
Disruptor: Cutting 80% off the Cost by Volume Production in China and Securing Domestic and Overseas Markets
A usage cycle of 25 years is currently the standard set by the global market for the lifespan of PV modules. How can we ensure that the PV modules efficiently absorb solar energy, withstand the intense heat of the mid-summer sun and wind and sand erosion in deserts, and prevent erosion caused by water vapour over a quarter of a century? Here the protective function of the film is crucial.
Wang Peigang used a metaphor to illustrate his point. If polycrystalline silicon is the heart of the PV module, then the solar panel is its armour and the protective film the bullet-proof vest. Although the protective film constitutes only a small proportion of PV modules, its functions of anti-ultraviolet aging and chemical-corrosion and abrasion resistance determine the life of the modules. The protection quality of fluoride film, in terms of the combustion index, is several grades higher than that of non-fluoride film. Fluoride film is currently accepted and recognised by the industry as the protective film of choice for solar panels.
The production of this important material for PV modules, however, was until recently monopolised by the US, France, Korea and Japan, while Chinese enterprises mainly relied on imports and their high prices affected the cost of domestic PV products. Wang Peigang said that only the US company Dupont was able to make fluoride film before 2008, and its technology monopoly and power of its brand kept the price of fluoride film high. The French company Arkema later began developing PVDF film, but this only drove down the price of Dupont’s film by a fraction.
In 2010, major changes took place in the fluoride film market. In that year, Dr Gu Fangming, the founder of Fumotech, returned from overseas and for over two years he and his team researched and successfully developed PVDF film specifically for use in solar panels. The establishment of independent intellectual property rights and specific processing techniques resulted in this becoming the first domestic commercial mass production of fluoride films.
After opening the door to the domestic production of fluoride film, Fumotech grew at a remarkable pace. Within three years, they were competing with Dupont and became the world’s main producer in 2016 and 2017. Most notably, its scaled economy has resulted in huge changes in the price of fluoride films. The competition brought by Chinese enterprises has led to a price drop of nearly 80%. A square metre of fluoride film previously sold for RMB50, but now costs less than RMB10.
Domestically produced fluoride film now not only dominates the domestic market but has made inroads into the overseas market. Wang Peigang proudly remarked that “With the passage of time, I believe the market share of domestically produced fluoride film will continue to change; the higher cost efficiency of China-made fluoride film will make the domestic products widely accepted”.
Explorer: Building a Big Brand through Technology Innovation and Striving to be No. 1 in the World
The ever-expanding global PV industry brought marked changes to the upstream demand for fluoride films. The global capacity for newly installed PV is estimated to increase by 15% each year, and the global average annual installation capacity will reach 100 GW by 2030. Based on this, 1.3 billion square metres of PVDF film will be required. At the current price of RMB4-6/m2, fluoride film producers thus have a potential market worth tens of billions of RMB.
Fumotech, as a disrupter of the global fluoride film industry and a pioneer of domestic mass production, has tremendous potential for growth. It is thus more competitive in addition to its below-average prices. Commercially, the brand effect means more added value and bargaining power, and Fumotech’s goal is to build a world-renowned brand in the field of solar panel fluoride film. Wang Peigang feels very strongly that “The only way to build a classic big brand is to improve our technologies, provide more reliable technology solutions and win the trust of clients”.
The prevailing attitude in terms of technological solutions is to provide customised services through a full understanding of the market, thus fulfilling the demands of the ultimate consumers. This applies to the PV industry, as clients in different geological environments have different requirements for fluoride film. In China for example, Tibet, Qinghai, Zhejiang and Jiangsu all have distinct and different requirements for the appropriate materials. To provide an appropriate product, however, does not always mean providing one with high performance, as an over-performing product will add to the cost. Overseas clients may consider the aesthetics in addition to the quality. The individualisation of products thus means different technology solutions may be required.
Wang Peigang said that to follow the trend of the market, Fumotech has been reviewing its products in the past two years. For example, in terms of colour, the milky white domestic PV fluoride film will be fine-tuned, as the markets in Europe, US, Japan, India and Southeast Asia prefer the colours dark grey, black, dark blue and transparent, so these will be changed to suit the individual clients.
We should now be fully aware of the current market conditions and lead the market in the future. Companies involved in technological innovation will be ahead of the curve when faced with new market opportunities, and thus occupy a commanding position, but the exploration of new technologies requires a high level of investment and involves risks in terms of the profit conversion rate.
“There is no need to worry on this issue. The president of Fumotech is a technology expert. He values and encourages technology innovation. The annual R&D investment accounts for no more than 3-4% of sales revenue”. Wang Peigang said that once his company notices a new development trend in the market and after investigation and discussion it decides on future direction for development, and then it will begin “technology reservation”. For some innovative or leading technology projects, the company will begin preparing long in advance. Chance, as the saying goes, favours the prepared mind. This “technology reservation” method will, it is hoped, realise Fumotech’s vision of achieving the global number one position in the field.
“The reason Fumotech has achieved its position in the market has to do with the approval and support of the third-party testing institutions. In 2011, when our products were still in the phase of laboratory research, we began to cooperate with TÜV Rheinland. We produced the first TÜV Rheinland certified 11-millimeter-thick PVDF film. Because of the certification of TÜV Rheinland, our marketing ran smoothly”. Wang Peigang’s view of participating in the “Quality China” Solar Congress was that “The circle of the whole PV industrial chain is here. It’s because everyone approves of its authority and fairness that it has such influence”.
