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Auditing suppliers: PV European firms foster their quality through their providers

polycrystalline modulepicture

ISOFOTON new polycrystalline module

Photovoltaic industry is increasingly raising its quality standards and demanding a higher product`s quality level. In order to improve quality processes and products, leading European manufacturers have started auditing their suppliers during the last years. In order to produce a top of the end quality module, they want to control the quality of raw materials used by their suppliers, and the manufacturing process and product design.

To audit their suppliers, European manufacturers check the module encapsulant, backsheet, cells, junction box and connectors, among others. These indicators will confirm the module`s performance, efficiency or degradation level.

A partnership to reach excellence

Auditing is a key tool in addition to international quality certifications and manufacturer/supplier agreements to ensure minimum product quality standards. It is a step further to ensure, “first-hand”, the quality of raw materials used in the manufacturing process and the methodology and controls within it. Through this process, all criteria involved in manufacturing process can be verified and controlled.

Moreover, the auditing process creates a “true” partnership between the European manufacturing firm and its supplier: all players in the value chain work together to develop the best-in-class product to the final client. Both manufacturer and supplier assess de process and can raise product and process suggestions and improvements in both directions. They share their expertise and work together on a more reliable and efficient final product.

This win-win relationship also contributes to the improvement of the client needs understanding: through this auditing process, the manufacturer assesses if it’s appropriate to develop a new product to satisfy new needs.

In Europe, German firms, followed closely by Spanish, are the leading companies to implement auditing process with their suppliers, mainly because of their industrial tradition and expertise on PV industry. For instance, ISOFOTON develops regular audit to its suppliers, an activity that the company launched more than 3 years ago.


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Isofoton contribution to Latin America Bloomberg Paper

DSC07171-2By Ángel Luis Serrano, President of Isofotón, and speaker at the Bloomberg Conference in Brazil

The renewable energy industry is currently dealing with major changes, including the emergence of Latin America as a key market. To respond to this, Bloomberg New Energy Finance created a new forum based in this region that gathered leading representatives from the public and private sector in Rio de Janeiro, Brazil. As a result, the White Paper “Wind&Solar. Latin America: the new frontier for competitive and plentiful renewable energy” was published in June 2013.

Ángel Luis Serrano, President of ISOFOTON, actively contributed to this paper, after leading the discussion at the forum solar panel as a speaker together with Tim Rebhor, Vice President of the North American First Solar. Among the paper conclusions:

LATAM: A great market for PV to explode

Solar industry is booming in emerging markets, which are experiencing strong economic growth and therefore expanding their energy needs. However, obstacles still remain, according to the Bloomberg White Paper.

First of all, Brazil still applies high import tariffs. These tariffs could serve as a driving force to promote local/international partnerships with manufacturing firms being run by international companies with R&D capacity and proved PV expertise. This would create win-win synergies between international firms, which would bring solar technology to Latina America, and local businesses, which would promote local/regional economic development.

From the investor`s side, the financing model of national development banks has to be reviewed in order to attract international investors and minimize political risks. As an example, multilateral development banks and private banks have already financed merchant solar projects in Mexico and Chile. According to the white paper conclusions, refinancing via stock markets is an efficient solution to be considered if it is related to a performing asset with a track record.

By markets, the document states the great potential of Mexico, Chile, Ecuador and the Dominican Republic. All have high electricity prices meaning little or no government support is necessary. In Mexico, particularly within the industrial sector, there is a need to reduce electricity costs. The situation in Chile is similar, but competition there among project developers is intense.

Diversity and dialogue: a step forward from subsidy- dependant policies

The solar industry has to find new solutions to overcome the great impact of the global financial turmoil, which has affected government subsidy policies. These new solutions have to improve efficiency and cost reduction through innovation, and a new business model that creates synergies with parts of the value chain that were previously untouched or under- exploited.

As well, considering general perception from the audience that attended the Bloomberg Forum in Rio, PV industry must continue its path of expansion, going beyond frontiers and policy constrains. This implies to look for international agreements.

There has to be taken into account that the way we use energy has essentially changed to a new decentralized energy model. In this sense, new solutions such as energy storage, smart grids, or energy efficient programs will be key to impulse renewables – particulary PV industry – in emerging markets.

Given this, the future of renewable energies will be built through financial soundness, diversity, international scope of work and consensus amongst both policy-makers and companies, beyond any frontiers.