Mitigating supply chain delays in the solar tracker market
In this special edition of Contractor’s Corner¸ solar tracker supplier Soltec has achieved success in reducing supply chain delays by having a global manufacturing footprint. Colin Caufield, vice president of sales at Soltec, discusses how the company has successfully circumvented trade blockades such as steel tariffs and supply chain delays, and what that means for the US solar market.
Below is a portion of the company’s Solar Spotlight podcast featuring Solar Power World, but be sure to listen to the full episode on your favorite podcast app.
So what challenges arise in the supply chain for solar photovoltaic projects?
- 1 So what challenges arise in the supply chain for solar photovoltaic projects?
- 2 What are the solutions Soltec uses to address supply chain constraints?
- 3 Given the current conditions for building new projects in the United States, what new challenges are you facing?
- 4 What market size do you cover with Soltec operating in the US?
- 5 You’ve already talked a bit about your tracker structures, but what would you say is your flagship product for US projects?
There are many. I’ll try to break it down piece by piece. In recent decades, but certainly in recent history when it comes to PV projects in the United States, there has been a total reliance on just-in-time deliveries, especially those from abroad. Across the value chain – especially when it comes to our product, which are trackers – be it steel beams, posts, mounting rails, other forms of hardware, electronics. These are all part of a complicated supply chain that relies on many different countries of origin to try to get the best and most aggressive price for our customers.
What we’ve seen over the past few years have been countless interruptions in that supply chain. Some of them took place at the production level; many of them, which was news worldwide, happened on sea shipments and congestion in ports or even canals that were famously blocked. They were all kinds of interruptions and challenges when it came to getting things to sites on time. The whole just-in-time delivery wasn’t as reliable as it was in the past, and there have been a lot of adjustments that everyone, including ourselves, has had to make.
What are the solutions Soltec uses to address supply chain constraints?
It’s all about diversifying the supply chain we have. Adding new countries of origin, adding new manufacturers so that we are not tied to one source or another. We do have a number of suppliers in Spain, because that’s where our company is located, and they can provide us with everything from poles to pipes and rails to even the assembly of, for example, the electronics. We control a lot of that supply chain because our team does the production, so we own some of that, which is a great way to mitigate risk and prioritize depending on what the list of projects is in front of us.
A lot of work has also been done to find new sources for gearboxes and engines, which in the past depended heavily on Southeast Asia. We are putting more and more work into finding suppliers that are located in different locations around the world. Perhaps most importantly, we have attracted more suppliers who are local to the United States. We have more and more pole manufacturers. We have steel fabricators who can cut our torsion tubes and cut our purlins from which we hang our modules. We have hardware suppliers and we have the ability to receive material and assemble certain parts in Mexico and the United States, which allows us to bring in material and avoid many of the tariffs that we would have if we just bought something from certain countries of origin. is manufactured and assembled. So there has been some shuffling and some new potential suppliers added.
Given the current conditions for building new projects in the United States, what new challenges are you facing?
Maybe this is a similar answer. We see that there is of course price pressure, because prices have gone up. It’s more difficult for some of the projects to outline that were, say, planned with the state of the world as of 2018 – projects that are now finally being built, because the expectations they had then are simply no longer the current state of Affairs. I’d say these are probably the biggest challenges, just that our customer base sees that they need to completely overhaul their expectations, whether it’s how profitable a project will be or not.
What market size do you cover with Soltec operating in the US?
People here probably know us mainly as a supplier of trackers for large-scale projects. Projects that were 20 MW and above, and coordinated with the EPC of the given project, to provide them with the trackers and maybe engineer the installation to some extent. That was really the scope limitation we had. We have also offered some installation services in the past.
We have really expanded that offer. So now we focus on the delivery of our trackers on a utility scale. We have a single portrait product and the two portrait product we’ve always had. The product with one portrait we call the SF1, the product with two portraits we call the SF7. We still offer a number of installation services depending on the state they are supplied in, even for some of those larger utility scale projects. The newer offerings are more related to the distributed generation markets. Particularly in the Northeast, and there are some in the Midwest where we’ve had some success with new business recently.
You’ve already talked a bit about your tracker structures, but what would you say is your flagship product for US projects?
That’s a great question. So, flagship, I want to lean towards the SF7 as the product with which we have the history. The SF7 is the two-portrait product, and that has over 2 GW of installations here in the United States. However, we see, especially when it comes to really big projects on a utility scale, and especially those in conditions, let’s call them plots, that are very square, very flat, with friendly soil conditions. We provide the SF1 on most of our quotes for those projects. The reason is simply that much less steel is being used, and as steel has increased in price as a raw material, it has had a significant impact on the overall capital expenditure of these projects. So our best bet, and our customers’ best bet for some of those larger utility scale projects where conditions are very favorable, is to look at our SF1 product. It just has a lower price to buy and it’s all in those conditions.
This podcast is sponsored by Soltec