Clean Power ReneSola Logo

Published on August 18th, 2014 | by Smiti Mittal


Wary Of Low Profit Margins, ReneSola Refuses Orders From China, India

August 18th, 2014 by  

ReneSola Logo

Falling preferential tariffs in India and rising competition in China has finally led to solar photovoltaic manufacturers rethinking their strategies in these two major markets.

Chinese module manufacturer ReneSola refused some orders from China and India due to low profit margins, the company revealed during its Q2 2014 results conference call. The results posted by the company are certainly an interesting read.

Module shipments in Q2 2014 were just under 500 MW, a decline of 4.3% compared to the previous quarter but 15% higher than the shipments during the same period in 2013. Wafer shipments, at 200 MW, were 5.6% higher than those in Q1 2014 but 52% lower year-on-year. Cumulative shipment of modules and wafers declined by 1.7% and 17.8% compared to Q1 2014 and Q2 2013 respectively.

While the net revenues were down 6.7% quarter-on-quarter basis it was marginally up year-on-year basis. Gross profit, on the other hand, witnessed a significant jump. Company posted a gross profit of $56.9 million, up 29.3% compared to Q1 2014 and up 87% compared to Q2 2013. Gross margin, at 14.7%, was the highest in last three quarters.

The huge spike in gross margin and profits is an indication of the fact that the company is cherry picking its orders and not relying on the quantity of shipments, something echoed by the management in the recent press conference as well.

Rapidly falling costs in India have resulted in a substantial decline in preferential tariffs of the last few years. From a per MW cost of $2.77 million in 2011 the capital cost has fallen to $1.13 million this year. The preferential tariffs available to the project developers has fallen from $0.24 per kWh to $0.11 per kWh. Project developers in India have offered to set up projects at tariffs even lower than $0.11 per kWh, thus raising questions about the profitability of such projects. To add to this, the Indian government is contemplating levying anti-dumping duties on solar PV modules imported from countries such as the US and China.

In China the company has to compete with larger companies including Yingli Solar, which recently achieved a major milestone of shipping a cumulative 10 GW of solar PV modules worldwide. Yingli Solar was the most preferred solar PV module brand in 2013. The company was also the third-biggest Chinese brand in Germany (one of the largest solar power markets) behind Lenovo and Huawei.

ReneSola hopes to ship 530 MW to 550 MW solar PV modules during Q3 2014 and increase its gross margin to 15-17%. 
Get CleanTechnica’s 1st (completely free) electric car report → “Electric Cars: What Early Adopters & First Followers Want.”
Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.


Tags: , , , , , , , ,

About the Author

works as a senior solar engineer at a reputed engineering and management consultancy. She has conducted due diligence of several solar PV projects in India and Southeast Asia. She has keen interest in renewable energy, green buildings, environmental sustainability, and biofuels. She currently resides in New Delhi, India.

Back to Top ↑
  • Advertisements

  • Top Posts & Pages

  • Cool Cleantech Events

    Low Voltage Electrification Event, April 25-27. Detroit, Michigan (US)
    Delve deep into the benefits and challenges associated with EV power supply.

    Offshore Wind Market Development USA, May 11-12, Boston, Massachusetts (US)
    Network and establish your business in one of North America’s largest energy industries.

    Energy Storage USA, June 15-16, San Diego, California (US)
    Only event in the United States focused exclusively on the commercialization of storage.

    More details are on: Cleantech Events.

  • Advertisement

  • CleanTechnica Electric Car Report

    Electric Cars Early Adopters First Followers
  • Tesla Model 3 Review by EVANNEX

    Tesla Model 3 Review from EVANNEX
  • Tesla Model 3 Exclusive Video

    Tesla Model 3 Video
  • Tesla Model 3 Exclusive Pictures

    Tesla Model 3 Video
  • Tesla Model X Review #1 (Video)

    Tesla Model X Review from new owners Zach Shahan
  • Tesla Model X Review #2 (Pictures)

    Tesla Model X Review from Kyle Field
  • Tesla Model S Long-Term Review

    Tesla Model S Long Term Review from Kyle Field
  • Nissan LEAF Long-Term Review

    Nissan LEAF Long Term Review from Cynthia Shahan
  • Interview with Michael Liebreich

    Interview with Michael Liebreich
  • Interview with Akon (Teslas & Solar)

    Interview with Akon Tesla Model S Tesla Model X Solar Power Africa
  • Interview with Dr Nawal Al-Hosany

    Interview with Dr Nawal Al-Hosany
  • Interview with Gro Brundtland

    Gro Brundtland
  • Interview with President of Iceland

    President of Iceland Ólafur Ragnar Grímsson
  • Interview with Nick Sampson

    Faraday Future VP Nick Sampson
  • Interview with Dipal Barua

    Dipal Barua 1st ZFEP WInner
  • Interview with Jonathon Porritt

    Jonathon Porritt
  • Interview with Clint Wilder

    Interview with Clint Wilder
  • Interviews with Solar Impulse Pilots

    Bertrand Piccard Andre Borschberg
  • Check out more CleanTechnica Videos.

  • Join The Solar Revolution!

    Edison-solar-energy solar-energy-spill-nice-day
  • Cost of Solar Panels

  • Search the IM Network