Velichko Dinov, Regional Manager Eastern Europe at Winaico
During his recent visit to Romania, we had the opportunity to discuss with Velichko Dinov, Regional Manager Eastern Europe at Winaico ̶ one of the best PV producers worldwide ̶ about European photovoltaic industry, the challenges in this sector, and some precious tips for us, the ones who wants to switch to clean energy.
What is like working and putting together solar panels for people who are starting to go green and looking to save some money?
The green energy started with people that are pioneers, and they like to do it. But, as we normally do, from a very nice idea to produce your own electricity and save the planet, we have made something that now in Europe, more or less, photovoltaic is a bad word because there is too much politics into it and a bad way to do it. Instead of having PV panels on roofs of commercial houses and then the residential, where you can actually produce and consume electricity, the boom started with the big installations that were used as financial instruments which created some kind of turmoil that actually people were going into it for quick money.
So, the renewable idea was just left back. But there are some people working in this renewable field that do believe in what they do, and I know that these days things are going to happen. After these 5-6 years of booming and financial instruments and so on, photovoltaic energy will be part of everybody’s life. I think like within the next several years, especially because of the drop of the prices and the installation costs – in the last five years dropt like probably in half. So, now, even if you have an installation that cost something, with the electricity prices of the moment, your return of investment will be something like 10 years. And of course we know that electricity price will be heading up.
It’s a matter of changing people minds, especially the government’s mind, because this big producers of electricity that were until now, are threatened by it, and of course they will do anything not to let anybody in their business. This leads to a lot of tension everywhere because they have the money, they have the opportunity to change the law and to make pressure. Step by step, this is something that cannot be stopped. If the politicians won’t make the laws in a way they are supposed to, people will start to improvise their own installations.
And the other thing, especially for this field, we are a very young industry. We are an industry with a track record of 10 years. This means that we are very young and, unfortunately, because of the easy money and because of the financial instruments, when you have a PV plan there is the professionalism and the quality in all across the equipment that corresponds to the maturity of our industry. So there are not so many people that actually know about what they are selling, know about what they are doing, or about technology. Just an example: everybody is talking about the efficiency of the modules, but efficiency of the modules tells you nothing. Efficiency of a PV module is the installed power compared to square meter. So, 100% efficiency would be if you have one kilowatt on one square meter. That’s all!
People have the strange feeling that if your panel has a 30% efficiency it will be better and it will produce more than a panel that is 17% efficient. It doesn’t have to be true. It means that I will use a bigger space to install this power, but if the module has a higher quality, the module with less efficiency will produce with the modules with higher efficiency when it corresponds to installed power. This means kilowatt-hour per kilowatt peak. Until now, I would say things are changing, but when you see a seals person or a technician or whatever, everybody cares about price per watt peak. That’s all they know. They don’t know anything else, which is very sad at the end of the day.
What should we do about it? What’s the solution?
At the moment, there is nothing much you can do, I mean it’s like being a baby, you wear diapers, you don’t know anything about the world. Then you learn how to walk, you become a teenager…So this is just a normal thing, I would say. But the main problem of the industry that industry itself has to solve is the threshold of entering the production, especially for PV modules, which is very, very low.
The IEC standard that gets your modules tested, according to certain standards so you can sell it on the market, are made so low that actually we can sit here, we can buy some PV cells and with a chewing gum or whatever we can make a module and send it for certification. And yeah, 50% it will pass!
Who makes the standard?
The IEC standard was made by people from industry, and some technical guys, I think 8 years ago. And the threshold is so low that it has to be changed. But, because the PV industry, until now, was donated, you know, “you get money for free, why should I care? I just want the cheapest thing, the government or others will pay for it and I am fine with it”.
But, when it comes to putting panels on my own roof, thinking about quality, if the panels will not burn or somebody will be walking on my roof, there is something different. The problem is that the industry has to solve this issue with the standard, because when you talk with other certification companies that actually make tests so panels producers can get the certifications, they say “of course it’s low, but we are not the only ones that make the certifications”. This has to come from people from the industry, politicians. Now, there’s a group working on a new standard, but the new standard will come in 4 years. So, until then, we have a standard that is quite low and they say “even if we put a stress test with 10% more stress on the modules, more than half of the modules will not pass.”
If you put just the UV test for getting the certification is something like 15 kilowatts, which even where the polar bears live we have something like 20-30 kilowatts. So, actually the UV test is like you put on the module, you turn on the light then you turn off the light. “Oh, look, UV test passed”.
Unfortunately, it is harder for costumers and for investors to get orientated. In the next year they will face quality issues coming from bad products.
I understood that your company has different testing standards…
This has to be done by every producer in order to know where his quality is. Actually, in house, we triple the test that we supposed to do. We make the test three times harder so we now that our modules will not only comply to the IEC standard, but they, in the real world, will have a chance of surviving.
It’s very important what materials you are using, who is your supplier, how you handle it, how your operators do it and so on. They say for people all the modules are the same, they have the same standards, so what’s the difference? If, for example, Trabant and Mercedes both have the same security standards, it would mean that you can burn or crash your car, nobody cares. But this industry has been there for about 100 years and they are more mature, and we, unfortunately, even the end customers, are not aware of this.
It’s just the same as the IT industry has started. There were times that in every garage everybody was putting together computers. If the computer broke in three or six months, nobody cared. At the moment, you don’t go to a garage, you go for a brand, and you always know what you’re buying. You know your hardware, you know your software, you know everything about it.
I’ve been telling this so many times, especially for big investors, even for small installations. Example: I want to buy a car so I go to the first auto salon, and the second auto salon, I read some articles on the internet, I ask my neighbor, I go for a test drive then I say “ok, I want diesel, I want gasoline, I what this security, that security”, and so on. This is a process that last between three to six months, probably a year, and it’s a thing that you are buying for 15-20.000 euros.
But when it comes to this big PV installations, where you put millions of euros, your decision comes from a data sheet from the producer and an excel sheet from your CFO. I don’t understand it. I put one million euros and I say “ok, this is the cheapest, fine, oh very nice excel table, oh and my return will be in four years”. But then things happen, the modules brake, inverter brakes, mounting structures are barely done, and then you have all kind of things and you start sponsoring your PV plant.
The IEC requirements; for example the IEC 61215 requires 200 circles, and you pass. We do 600 circles, we make electroluminescence inspection to see the micro-cracks. The tamp-heat, to pass the IEC, means they put it in a chamber at 85 degrees and 85% humidity for 1.000 hours. And then they measure your Pmax declaration and it’s fine. I mean, at the moment, 100% of the modules pass. We do it three times. We have a chamber and we do it for 3.000 hours. We talk to the certification companies and say yes, if we do it three times, it will probably be ,let’s say, ok, and the threshold for quality will be higher. And yes, 50-60% of the panels will not pass.
The problem is that until now, especially the Chinese producers, have some kind of Chinese policy of the government, and they support the production of PV modules. And the PV producers receive very cheap financing. More or less, “we give you money if you make a lot or you don’t, who cares?” It’s important that China will export a lot of PV modules and so on. So, at the end of the day, somebody gives me money and I don’t care if I make profit or not, and I sell it for a lower price so probably it’s a good business case for me but not for the end customer.
Everybody is looking at the money behind it, and nobody is looking for a solution for the future. Those installations have to be there not just for 20-25 years. If the installation works for another 25 years, I get 85% of power I was getting at the beginning, why should I destroy the power plant? You can go on for another 10-20 years. Who cares?
So, we are talking about generation decision and all of a sudden we make this generation solution made on Google and a data sheet. This is just ridiculous. But that’s the thing and that’s why a lot of big investors rent third party companies that make factory checks and make their own test installations and so on. I always say to my customers — the only thing that really matters is the real life data. Nothing else. All the certification are all fine, but it’s just papers. And, also, there is one important thing — if something happens to my modules, like after five years from installation I go to the certification company and I say “ok, my friends, this is what happened, you certified the modules and I bought them because I trusted you, are you going to pay my money?” They say no, we are not liable. Ok, and in this case, what’s the idea of having a certification? That’s how things work.
Do you think that most of Europe will switch from grid-tied energy to solar energy in the next 10 years?
Making forecasts is quite hard. The problem is very complex because the energy is a key for our lives. So, switching to solar would be a dream for me, but on the other hand we need to think about the social impact of switching directly to solar instead of having this big coal mines. For example, let’s take Poland. Until now, they depend more or less on coal. A lot of people are working in coal mines and if you switch to renewables, what do you do with this people? They lose their jobs and then you have pressure and it’s not easy. So, things have to go step by step.
Of course, photovoltaic is not just something out of this whole industry, so if we go together with the battery systems, with electromobility, those things all have to be combined together. And also, can you imagine the impact for the Arabian countries or for Russia if in Europe we decrease our dependency on diesel or petrol with 15%, for example? This will have huge impact on them. So, this is also something you have to consider and you will have to know that we are living on one planet, it would be very nice if everybody produces electricity for itself but, on the other hand, we all know we have no chance.
I think we’ve already destroyed the planet, so we can only lower the impact of what we have done. People, as societies, don’t change until they reach the breakpoint of extinction. When it’s going to be a huge problem, we will change. Until then, we say it’s ok, it’s fine. After something bad happens everybody will run for it, but I’m afraid we are already late, so, we will see.
How can a solar panel producer survive on the market?
It’s very challenging. Especially at the moment, I read an article that only in Europe, in the last two-three years, 20.000 companies connected with PV have closed down. 20.000! Installers, project companies, producers of whatever. We are facing a huge overcapacity of PV panels, probably let’s say 60 GW in manufacturing capacities worldwide, but the demand is for 20 GW. It’s a big difference and actually, as I said, in every beginning of every company, let’s say within five years, from ten companies only one survives in any other industry.
Already so many are closing down, especially European producers, because they are exposed on a big pressure from China, so many of them close down, and now it’ the Chinese turn, we know some companies that have big problems and probably they will restart, or probably not. We will see. Expectation is from the companies that are now in the market after five years.
For us, surviving on the market is quite challenging, so you have to keep a low profile, you have to be careful about your margins, you have to be careful about your costs and your profit, be very careful with the bank and so on. For us, the main thing is our belief that quality is the only thing that can survive, so people who work with us and have installed our panels, know very well how things work. And we survive together. Of course, I’m not a dreamer, I don’t think about one day everybody thinking about quality, because somebody will always sell you something bad.
Can you tell us a little bit more about Winaico and your capacities?
Let’s go a little bit backwards. Win Win Precision Technology, which is our sister company, started in 2003 in the field of semiconductors, because Taiwan — probably you know — produce like 80 to 90% of the worldwide semiconductors. Three out of four chips for computers, mobile phones and so on are produced in Taiwan. So it’s somehow the semiconductor biggest market in the world.
In 2003, Win Win Precision Technology started in this field, and in 2008 we started our first production line, so our first modules were produced in 2008.
Recently, we installed two more stringers and at the moment we reached a capacity of 250 MW per year. We will see, we want to have like 330-350 MW by 2016, but everything depends of how the market works.
We have global companies but, of course, the PV market is uncertain so we need to leverage our production. Our big market, at the moment, is Japan (I think it’s everybody’s market) and Australia. US, at the moment, is challenging because they made antidumping policies to all Taiwanese and Chinese producers.
Normally, our modules are not so known because we don’t work with global distributors, we work directly with installers, so this means we go directly to the companies that install the modules, and we have a better understanding of what they do, we have very quick feedback from the market and 1.000-1.500 companies that are buying on a regular basis from us and this give us a nice base of surviving, because we are not dependent on a couple of big projects which if they happen you are fine, but if they don’t, you have big problems.
Also, we won PV Taiwan Excellence Award, the standards are quite high so this is actually very important for us, and I think even with the older tests we were leaders. We try to be as open as possible, and it’s up to our way to persuade people to go for quality, but it’s not easy.
What’s your main advantage against the other companies? Is it quality?
I would say quality, first of all. Second of all, we sell directly to the installers, so they have direct contact with the producer, there is nobody in between; and thirdly, all of our panels come with a two years insurance of the system, which comes for free, and it’s from one of the biggest insurance companies in Europe, the German Ergo.
The important thing is that this insurance is between the end customer, the investor, and Ergo. Winaico has nothing in between, this insurance can be made for 10 years and this means that everything that happens in 10 years, even if Winaico change his name or gets bankrupted, the customer is covered.
Also, this insurance covers 90% of his yield, so if his installation produces less, then the insurance company pays him his loses. This is very important because there are others companies that come with the same type of insurances but the problem is that the insurance is between them and the insurance company. So, if one day they go bankrupt and if I go to the insurance company they will tell me “ok, you have no contract with us.”
There are so many things to say about quality, but the easiest way is to look at the test in Australia, on the ratings, and you can see that we are always on the top.
What are your latest developments and expansion plans?
When it comes to technology, we created our own patent, it’s called HeatCap, it’s a special print we do on the back of the products cells at the moment, which is a monocell, and the monocells are very fragile, and they are very exposed to risk of micro-craks. This print that we do lowers the possibility of having this micro-craks with 18-20%, and also it’s called HeatCap because it dissipates the heat from the module, so the operation temperature of the cell is around 7% lower than a module without this. So, if you have a rate of 0.4% per Celsius grade, then you have 3-4% higher yield every year.
For expansion, we recently opened an office in Mexico, we have our agent in South Africa, and yes, the world is so big…
Talking about technology, which development surprised you the most in the last years?
Actually, nothing surprises me that much. I mean there are so many talks about higher efficiency cells and so on, but when you see the world map, the efficiency of the modules goes up like let’s say 5-10 watts per year, not more. So there are no big jumps like “ok, we had 130 but now we have 500″, because technologies settled down and we know what to expect from it.
I’m a little bit let’s say disappointed with the technology progress of the batteries, because they are still very expensive, and they are still inefficient. One of my friends said it’s better to you put your energy in chocolate, it has the same efficiency as putting it in a battery. This is another reason why PV hasn’t become a major producer of electricity, because you cannot predict when the sun will shine. When you have a reasonable solution for batteries, the PV industry can be better. We are still waiting for a big boom, but nothing happens.
What’s your opinion about grid parity?
In Europe, especially, we already have grid parity. But, as we mentioned at the beginning, it’s a political decision that has to say “ok guys, you can install your panels, you can install your wind turbines on this and this conditions, but whatever you produce over you will not receive money.”
And then people will think about self-consumption. If this happens, I mean our world is so dynamic that if you look at the mobiles, Nokia disappeared. It was one of the biggest companies ever and now Nokia does not exist because it was bought by Microsoft. The same thing can happen to CEZ. If this is allowed, and the grid parity exists at the moment, they can be lower than half that they are now within a couple of years.
They don’t want this and they have the power to postpone it. It’s a kind of social contract we have to do so everybody gets a piece of the action, but in countries that don’t have another option it’s hard. For example, Egypt. They must put PV because they are almost bankrupted, they don’t have credit to buy petrol and their grid is in terrible condition. So, if you have a factory, you need electricity to run and your only option is to put PV.
In Romania, in the Czech Republic, in Bulgaria, everywhere it’s just the same. There are factories that would like to have predictions for the next 10 years, but they cannot predict the price of electricity. If you look only on the price of electricity and the inflation for the last 10 years, you can see that the price of electricity rises between 10 and 15% every year. How can you make your cash roll for the future if you cannot predict the price of electricity?
There are factories that say “ok, if I put on my roof this and this, I want to know, for the next 10 years, the price of electricity.” So, we have grid parity now, but we have to wait for the political solution.
How did you started to work with Romanian installer company solar-service?
I met Robert Szabo in Bucharest, three years ago, and then, step by step, he ordered something, then another something, and so on. Solar-service is like a rare breath, the guys just want to do their job properly. I don’t know why, but it’s like that, so this is the only way actually any company can survive.
We need to understand that our name is the only thing we have in our lives, and once you do a bad thing, then everybody knows about it, especially with Facebook and all the social media. You have to be very careful what you do, especially in small markets like Romania, with 20 million, but at the end of the day it’s not a very big country.
I like it, because Robert asks questions all the time, he wants to know, he wants to learn, and this is the only way you can go forward.
Which other small countries are you focusing on, beside Romania?
This year, we sold panels for 10 different countries. I have very good partners in Cyprus, Hungary, Lithuania, Estonia and Czech Republic, Poland is coming — I think this will be a very interesting market—, some things come from Croatia, and Bosnia will be opening up. Eastern Europe is a big place, but when it comes to PV market there are not so many countries you can work with, so, at the moment, I’m focusing mainly on Poland, because it’s starting there and we shall see.
In your view, what’s the biggest challenge for a person who wants to install a solar system?
Because I work only with installers and I know very well their pain every day, their biggest challenge, as the end customers — and the most of the end customers are very uneducated — all the time they have to challenge the same thing: the price. “Why are you two times more expensive than my friend who lives two streets away and makes everything in the garage?”
It’s a big effort, it’s an everyday fight, but the biggest challenge for me is to sell a product, to sell yourself and to sell the quality that comes with you.
Installers know how to do their job, but when it comes to sales, and selling themselves and challenging the customer on quality and materials they use, they are very passive, and because they are hungry to get the job, they don’t do a step or two steps to explain to the customer how things work, and make him buy a better solution. They just say “ok, if you want it fine, I will do it for you.”
Especially in the PV, for a professional company it’s very challenging to fight the companies that come in and go out after the boom is gone. In the booming countries, there are companies that are doing roofs, plumbers, bakers, I don’t know. Everybody was a PV installer, because they thought that it is very easy, you know, it’s not nuclear science, so there are so many companies that were installing this PV because the demand was bigger, and now the companies are out, they just go back on their pluming or baking or whatever, and the customer who had the installation have to go again to a professional company to repair de damage that was done.
When the installation was done, they said that professional companies are too expensive, and the things were like “I know a guy, he will do it.” And after just one year, the installation is not working and you go back to solar-service or to another company that is professional and you say “please, now do something.”
And they have to start from scratch because you know, he bought the inverter somewhere, the modules from another place and then everything is twice as expensive.
It’s just like I’m taking my car to an unprofessional guy, he changes something, my motor breaks and I will have to go to another shop to repair it.
So, what’s your advice for people who want to go solar?
For the people that want to go solar, it’s like with everything — don’t go with the cheapest price! Listen to your technical adviser, what he is telling you, and make your own search. You don’t have to believe the data sheet, because the data sheet is a piece of paper. You know, ask around. There are so many PV forums on the internet, so many measurements that can be done, but mostly do believe the professionals. This is their job.
If I go to a doctor, I don’t tell my doctor how to treat me, because he has studied years and years. So, be very careful at the person you give your installation to be done. Check the company.
In your opinion, what’s the most important improvement governments can make for solar customers?
The best thing is they stop intervening all the time. Just leave the people and the installers to their job, and don’t put so many administrations because there were times and I think there’s still times when you make 5 kilowatt installation or 500 kilowatt installation and the paperwork is the same. They want the construction permit, they want your neighbor, they want your grandmother, everybody to say something about something that I put on my roof.
Administration has to be lowered to a level that it has to be controlled somehow, but doesn’t have to be over administrated, and when the law comes just please take into consideration that we need to do something that will lower our footprints for this planet.
We don’t need to destroy the network, it has to be there, somebody has to take care of it, but it doesn’t have to be in favor only of the big players. So, when the law comes, I don’t know how they are going to do it, I have never seen it, I think the best thing is just to make a grid parity and keep a normal business case.
I want electricity, either I buy it or I produce it. And that’s my decision. From the very beginning of the business, free competition is the best thing that can happen to all. So, minimum interference from the government and the local governments would be the answer. Try letting the market decide.
Roxana Muntean
