Solar industry “desperate for panels,” says Tindo, as summer supply drought looms

Australian solar panel manufacturer Tindo Solar says the global panel supply crunch has led to an “overwhelming number of inquiries” from increasingly desperate local installers, amid warnings imports could completely dry up over the Australian summer, causing projects to get cancelled.

The Adelaide-based company has started releasing 1,000 extra solar panels into Australia’s wholesale networks to help companies facing the prospect of cancelling their pre-Christmas installs because they couldn’t access China-sourced panels.

“I’ve had installers almost in tears saying ‘mate, I just can’t get any panels’,” Tindo Solar CEO Shayne Jaenisch told RenewEconomy on Wednesday. “Others have said I’ve had switch from this brand of panel to another [lower quality] brand.”

Australia’s solar industry is being buffeted by a string of different PV panel price and supply problems, stemming from global shortages of raw materials such as polysilicon, glass and silver, and exacerbated by soaring shipping costs and, most recently, a power crisis in China.

As RenewEconomy has reported, this has caused manufacturing costs of solar PV modules to surge from $US0.20 per watt peak (Wp) in 2020 to between $US0.26 and $US0.28 per Wp in the second half of 2021 – the highest levels since 2017.

And that puts many solar industry players in the unenviable position of deciding whether to reduce their margins, delay projects or increase prices.

It is having a big impact on large scale solar projects, with the industry rife with rumours of major delays because of the delays in module delivers.

The impact has even started to show on the rate of rooftop solar installs in the country, with recent SunWiz data showing an 11.1 per cent drop in installations between September and October marking the lowest volume since mid-way through last year.

Jaenisch, whose company has held a niche position in Australia’s market as the only local panel manufacturer, said that since the beginning of the Covid-19 pandemic, he has gone from having five new inquiries from retailers a month, to five a week.

And since wholesalers flagged stock supply issues just over a month ago, it’s now jumped to 10 a week.

“We’ve been fielding calls for more than a month, with solar installation companies desperate for panels,” said Jaenisch on Wednesday.

“Not only are they faced with not enough panels to fulfil their installations, but the panels they can buy are 30 to 50 per cent more expensive than they were mid-year.

“Because we’re Australia’s only manufacturer, the industry is turning to us for stock,” Jaenisch added. “To assist with the overwhelming number of inquiries we have decided to release small amounts of stock to help alleviate the current market short fall.”

Janisch is well aware that the small amount of stock that Tindo is able to add to the mix won’t make a material difference to what is a “very volatile market,” but he hopes it will relieve “a little bit of the anxiety around us,” while also managing the company’s own supply-chain balance.

While not an importer of panels, shortages and price rises in raw materials is starting to bite for Tindo, with what Jaenisch says has been a 3-400% increase in its logistics bill just to get raw materials to Australia. The price of silicon cells, he says, has jumped by 130%.

“We’ve avoided any of the initial prices increases, we don’t have to put up our prices right now, but inevitably we will,” Jaenisch said. “Right now, we’re trying not to take advantage of the desperate market.”

Tindo, which in September this year began decommissioning its original South Australian manufacturing facility, is in the final stages of launching a larger factory that will allow the company to significantly increase its output, with a capacity to produce up to 150MW of solar panels each year.

Interestingly, however, Jaenisch says there is “no way” Tindo would be investing in another manufacturing facility in Australia in the current environment.

“We need local production, we need local competition, [but]… there’s no point in another panel manufacturer joining the Australian market when we can’t get hold of raw materials,” he said.

Jaenisch is also a bit irritated by the sudden focus by media and analysts on Australia’s supply chain difficulties, when that has been the industry’s Achilles heel since its inception.

“This focus on ‘supply chain’ as the new buzz-word, it’s dumb. It’s always been a challenge, always been an issue,” he told RE.

“We are going to continue to be at the mercy of China and that’s for finished materials, number one, and also for raw materials.

“We’ve got all the tech and all the raw materials in the ground to export silicon and glass to the world,” Jaenisch said. “All it needs is a motivated government, worried less about being re-elected and more about creating jobs.”

In the meantime, Australia’s solar industry will have to buckle in for one of the bumpiest stretches of the solar-coaster yet.

“There’s going to be companies that go into receivership because of a lack of ability to keep up cash flow in an industry that’s renowned for low margins and high turnover,” Jaenisch said. “It will be the small mums and dads, the heart an soul of the industry [who suffer most].

“Projects are already being talked about being cancelled, especially on a utility scale. The returns are just not there on those projects any more. And that will affect the Tier 1 [companies] – we’ve seen that happen in the past, even without the price crunch.”

Ironically, all this is happening at a time when Jaenisch is seeing more demand for Australian made panels from corporations and governments keen to be seen doing the right thing in terms of ethical and responsible sourcing of materials.

On the up-side, he says the solar supply crisis has closed the price “delta” between Australian made PV panels and good quality imported panels.

“The difference between [ours] and some of the really good Korean and Chinese modules is now cents, rather than tens of cents.”