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  Business Times 28 Apr 07
S'pore may host solar module plant
 By Matthew Phan

SOLARWORLD, the world's third largest solar cell manufacturer, could invest 100 million euros in a solar module plant in Singapore within two years, founder and chief executive Frank Asbeck said yesterday.

The Economic Development Board (EDB) has aggressively courted investment from SolarWorld, awarding the firm an International Headquarters award yesterday for basing its Asia- Pacific sales office here. It also led a high-level government delegation to visit the firm's solar plants in Germany last week.

Mr Asbeck, who is on his first visit to Singapore, complimented EDB officers on being 'bloody quick' and appearing in his office soon after his firm bought over Shell Solar in June last year, an acquisition that catapulted the firm into the industry's leading ranks.

His strategy for Singapore is similar to that which SolarWorld used to rapidly build itself into a leading player, said Mr Asbeck. This is to backward integrate from sales and distribution to making solar modules, then to making solar cells, and finally to fabricating the silicon wafers used in such cells. In the long run, Asian-based production would cut transport costs for the firm.

Mr Asbeck aims for a quarter of SolarWorld's production to be exported to Asia next year. This is largely going to China and Taiwan for now, but he also hopes to double exports to South-east Asia to a tenth of output.

In the short term, however, there is little need to locate production overseas, said Mr Asbeck, whose firm recently announced a doubling of capacity in Germany to 500 megawatts by 2009.

At present, transport accounts for only 4 per cent of manufacturing cost, and labour, 10 -12 per cent, he said. However, the cost of solar cell manufacture will fall by 5-8 per cent every year; when the cost price has fallen significantly and the product is more commoditised, then transport will constitute a large part of costs.

SolarWorld will locate a plant either in Singapore or South Korea within two years, Mr Asbeck said. Korea has a domestic market, but a plant there could face 'a lot of interference' when selling to China or Japan, while 'everyone will buy a Singapore-made product'.

Mr Asbeck suggested that Singapore initiate a policy that compensates users of solar energy for feeding their surplus power to the grid - a plan the government is considering. He said that compensation could initially be higher than the market price for grid electricity, but decline to market rates within five years.

Similar feed-in compensation in Germany pays more than market rates, with the subsidy scheduled to fall by 5 per cent a year, Mr Asbeck said. He recalled recommending a faster rate of decline - 7 per cent - to a German politician, who was surprised, given SolarWorld's position in the solar market.

But according to Mr Asbeck: 'We are quick, we want it to be such that the fittest survive.'

Moving on to manpower, Mr Asbeck said that SolarWorld works closely with universities and research institutes in Germany, and similar institutes and relationships have to be established in Singapore.

For example, students could complete their PhDs while working with the company on the production process. 'This is not something you can buy and will take some years.'
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