Editor’s note: On Wednesday, SunPower dropped the unexpected news that it will acquire SolarWorld Americas, which it clashed with in the Section 201 trade conflict, as well as the company’s factory in Oregon.
pv magazine: Analysts at IHS and GTM Research have repeatedly told me that given the limited duration of the tariffs, it still does not make sense to manufacture in the United States. Why is SunPower making this move at this time?
Tom Werner: Their comments I think are true for a greenfield facility. In this case we can take an existing facility and we can invest in it, in a couple of ways. One is to improve the efficiency of one part of their production by making a P-Series panel, or a shingled panel, and it actually works ideally with PERC technology, which is what they make.
Point 2 is that they can take their best practices and combine them with our best practices. We do run approximately 1.2 GW of our own capacity, and we have experience partnering with other companies. We can bring that efficiency to bear with improvement of the operation at Hillsboro.
Then we can shorten the payback period in a way that was acceptable to my leadership – Sunpower’s leadership team – and SunPower’s board.
pv magazine: What is the 1.2 GW in reference to?
Werner: That’s what we produce of interdigitated back contact (IBC), our traditional SunPower technology, which we produce elsewhere.
The capacity of Hillsboro is approximately 500 MW. And they are running at approximately 50% capacity.
pv magazine: Will Flex have a role in the running of the new facility, or will this only be SunPower?
Werner: This will be only SunPower.
pv magazine: Can you go into detail what are the specific advantages are of buying an existing factory instead of building a new one, and how that works?
Werner: That has got a few points to it, so let me start with number one. This is catalyzed by the tariffs, and by the desire of the current administration for American solar manufacturing. And nothing could be more credible and unambiguous than buying existing capacity that is running.
Number one it is very credible and unambiguous. It is a completely clear commitment by SunPower to American manufacturing.
Point two is that it is already running, so there isn’t any ramp time. So the cost of ramping a new facility mostly doesn’t exist, because you have already got a running facility, that we can further optimize or improve.
And then thirdly we have a skilled workforce that we are quite impressed in – the leadership team and the workers. So our experience of training and retaining skilled solar workforce can be challenging, and that has already been solved at this facility.
pv magazine: Should we expect rehiring back of some of the workers that SolarWorld laid off?
Werner: I would say that our plan it to expand over time. However, we will have an integration team that is being put together over the next two weeks. And the integration team will lead discussions about how much, how fast, and how to do that.
As well as channel strategy, mix of products – a number of other things. It is going to be up to the integration team. I would say that over time the answer is yes.
pv magazine: SunPower has a request for product exclusion before the U.S. Trade Representative. Why are you making this purchase now, and not after you have heard back regarding that exclusion?
Werner: The answer to your question is that there is no deal-making here. It is not as if we will do this if you do that. The administration and USTR will make its own decisions, and we think IBC will win on its own merit. It is super clear and unambiguous.
The point is that we have spent a lot of time in Washington DC. And their desire for American solar manufacturing is very clear from those meetings. So we wanted to swim with the current and not against the current.
pv magazine: What do you expect in terms of the future product mix between P-Series and SolarWorld’s legacy products at the Hillsboro site? And is there any possibility of IBC products there as well?
Werner: I would estimate that between one-third and one-half would be P-Series. That is still being determined so that is something that we could update you on as the integration team works.
There is almost zero possibility that we would make IBC product in Hillsboro. That is why we still have an active exclusion request for IBC modules.
pv magazine: Will SolarWorld’s cell lines be able to produce cells for the P-Series, and what work will it take to upgrade them?
Werner: We will need to add some equipment in the module operations. We will need to add some equipment to laser-cut the solar cells and then epoxy them into a string. We call that a hyper-cell. I don’t know if that is common language in the industry, but they become one long solar cell.
The equipment that accomplishes that came from the American company Cogenra that we purchased a little less than two years ago.
That is primarily the changes. We may do some upgrading of the cell fab. That is something that the integration team will be evaluating.
pv magazine: How much of the SolarWorld staff and leadership do you expect to retain?
Werner: We haven’t made those decisions. The integration team will guide those decisions. They are pretty lean in terms of overhead and leadership, so we started at a good place. I think we started with a capable, lean team.
pv magazine: With SunPower buying SolarWorld Americas and SolarWorld’s German operations entering insolvency a second time, do you think this resolve the trade conflicts within the solar industry?
Werner: I think it is a clear step in the right direction. I think there is more work to be done. There is still polysilicon that is unresolved, and a couple of other areas. I think it is clear that SunPower, by virtue of this proposed acquisition, will be part of that extra work to be done, but yes it’s a clear step in the right direction.
pv magazine: Speaking of polysilicon, do you have any plans to restart production at the monocrystalline silicon ingot pullers at the SolarWorld site?
Werner: Probably not. We see that area as potential expansion of the PERC capacity down the road.
pv magazine: Is there anything that we haven’t talked about that you think is important to know about the acquisition today?
Werner: We see their existing products as complementary, so we see this as an opportunity to broaden our reach with our residential and commercial customers to increase share. So this is a good-better-best strategy, or maybe better-best. So that is a super important part of what our goal is and how we drive this.
Interview conducted by Americas Editor Christian Roselund