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25 May 2022

LONGi brewing new solar cell technology for Q3

LONGi’s 2021 annual report announced that the company – the world’s largest wafer, cell and module manufacturer – had “independently developed new high-efficiency cell technology, formed an independent cell technology route and made breakthroughs in key technical processes”, which is to begin production in Q3.

Since that announcement, the technology involved still has yet to be named or described. LONGi is large enough to have a finger in every pie – before setting certain heterojunction records throughout 2021 it was doing similar for TOPcon – so it is not possible to guess at what the new technology is.

Before its annual report, LONGi revealed a $1.55 billion, 20 GW monocrystalline wafer, 30 GW cell, and 5 GW module factory which some implied would feature the novel technology, but it is rather large for that. LONGi is also working on a 2 GW new cell technology line in Taizhou, but that has already been specified as a P-type IBC (positively charged interdigitated back contact). The 1200 MW “LONGi Central Research Institute” announced in mid-April in Yongle Town, Shaanxi Province seemed a likely candidate, and its equipment – “laser cutting machines, texturing cleaning machines, PECVD, PVD, and screen printing machines” is for heterojunction. However, Securities Times e Company claims to have been informed by a LONGi representative that the “new cell technology” will not be heterojunction.

Perhaps then it is perovskite, or perovskite-Si tandem. There is no reason in principle that the world’s biggest manufacturer, which spent $660 million on R&D in 2021, shouldn’t be able to finally crack perovskite’s technical hurdles, but it would be surprising for it to happen so suddenly. LONGi’s declared perovskite involvement does include things like a perovskite tandem patent from February 2021, and statements to investors that “the company has technical reserves in various battery routes such as perovskite batteries.” But similar things are true of many companies, mainstream like Hanwha Q Cells and GCL, and start-ups like Oxford PV and Microquanta, while they remain an unknown distance from delivery.

LONGi’s new product could be a different tandem – First Solar plans to sell Si-CdTe tandems from 2024. For First Solar CdTe is a fully figured-out technology, but there are very few other companies which can make it – in China its presence consists of very small-scale production for BIPV installations.

Or it could come with a new acronym of its very own.

One thing LONGi has told us is that the new product should have 2 GW output in 2022, which would fit with the aforementioned 5 GW module capacity, but not so much with 30 GW of cells. LONGi has also said the new offering will be geared towards “the mid-to-high-end distributed market” which implies high-cost and high-efficiency, as to be expected from a new technology. It may not be thin-film, because if it was then perhaps it would be destined for BIPV in Shanghai and Beijing. The company also states it will launch a new ground-mounted product this year.

On the 18th of May DR Laser, a Wuhan-based manufacturing equipment provider, announced a deal with LONGi concerning DR Laser’s solar cell laser equipment, spare parts, maintenance, and production line upgrades. The deal was worth $10 million, small for LONGi but more than half of DR Laser’s 2021 income, and was taken as further evidence of LONGi’s ambitions regarding novel production.

Despite LONGi’s strengths, it has ironically suffered a one-third drop in its share price in the past six months, a reflection of low profits, but this is only because its manufacturing is skewed towards wafers – in 2021 it produced 70 GW of wafers, 36 GW of cells, and 39 GW of modules. When the polysilicon makers take advantage of the shortage to triple the price, as they have, it is the next supply chain link – wafers – which is hit hardest. But these prices will pass, and LONGi plans to expand wafer production capacity from 105 GW to 150 GW this year. That’s along with 60 GW cell capacity and 85 GW modules, with expected revenue being $15 billion for 2022, up from $12.3 billion. This week a company representative stated optimism about polysilicon prices in the latter half of this year, while we at Rethink Energy expect the major price decline to arrive only in H2 2023.

LONGi initiated a $1.05 billion convertible bond fundraiser last week, after a partial recovery of its share price, with market cap reaching $62 billion. This fundraiser is larger than its previous two such fundraisers of $450 million in 2017 and $800 million in 2020, but of this $1.05 billion $880 million will go to monocrystalline factory expansions which we expect to have nothing surprising about them.

LONGi changed its full name this month to “LONGi Green Energy,” which can be taken to indicate a pending expansion into a field adjacent to solar, such as batteries or green hydrogen.

The solar industry is transitioning from P-type to N-type in search of higher efficiency, and within N-type there’s IBC, TOPCon, and heterojunction, of which the latter two are set to be the most prevalent. TOPCon cells are expected to reach 60 GW of production capacity and 10 GW of shipments by the end of 2022. It is compatible with existing Mono PERC production lines and its adoption is more imminent than heterojunction, which promises higher efficiency and lower cost, but for now remains higher cost. Heterojunction is to reach 80 GW production capacity by the end of 2023.

One of the most advanced heterojunction companies is Risen Energies, which boasts that its product is “low-carbon” because its 120-micron wafer thickness requires a quarter less coal-powered electricity being put into polysilicon manufacturing.

When asked about the time point of the company’s new battery technology, LONGi said that the company’s new battery production capacity is expected to be put into operation in the third quarter, and about 2GW is expected to be shipped this year. The new technology products are mainly aimed at the mid-to-high-end distributed market. For the ground power station market, we will launch another new battery technology product, which is expected to be deployed in Ordos’ battery capacity region.