Last week, Silevo, a California start-up solar technology company, announced plans to manufacture their new hybrid solar cell in China. The decision to manufacture abroad coincides with a national debate over whether or not the solar industry should be more or less incentivized.
According to Chris Beitel, vice president of business development for Silevo, developing the manufacturing line in China was not an easy decision.
“We absolutely did an intense assessment of all the various options—we looked at California, Oregon, and Arizona,” he said.
According to Beitel, China’s incentive programs offered Silevo the opportunity to manufacture at a lower cost. Aside from the incentives, Beitel explained that China appealed to the owners of the company because both had business ties in China from previous ventures. Although China will house their manufacturing for now, the company may look to new locations when they outgrow their future site.
“It’s a commitment that we have for phase one,” said Beitel. “When we look to expand to a phase two, we will certainly look into our options.”
Silevo will distribute their new hybrid solar cell technology in three different markets—offering a diversified geographical range for the company’s expansion of sales.
“From a market point of view, we think the U.S. offers the strongest point for us to start,” he said. “We’re focused on the U.S. market, certainly 70 percent of consumption is in the EU, so we will look to that market as well, and finally China offers a good opportunity as well.”
Although the company is based in California and will distribute mainly in the U.S., the choice to manufacture in China takes a primary business component offshore. But, as Beitel points out, the choice is not at all uncommon for U.S. businesses.
“For us, it’s very important to have the right cost ratio,” he said. “We do that two ways—one is through the operation strategy, and the second is through our fundamental product. The manufacturing strategy was a difficult decision, but if you look at other peers, like Intel or Apple, all of their manufacturing has been done offshore in China. We thought this was the appropriate stage for us moving forward.”
For more information about Silevo, visit www.silevosolar.com.