GCL-SI Changes 2.5 GW Shingled Module Fab Plan To 15 GW

• GCL-SI has changed its plans to develop a 2.5 GW shingled solar module fab in Hefei province
• Instead, it will expand the capacity at this location to 15 GW on annual basis with 30 production lines
• The 15 GW project will roll out large sized solar modules to cater to growing market demand and quickly increase its high efficiency large size module production capacity

Chinese solar module manufacturer GCL System Integration Technology Co., Ltd. has had a change of heart for its 2.5 GW module fab planned to be located in Hefei province of China (see China PV News Snippets: GCL-SI, Zhonghuan, JA Solar, GCL). It has now decided to expand its planned annual production capacity for this fab to 15 GW.

What's the change?

The company wants to change the use of proceeds from the GCL Integrated 2.5 GW shingled module project in Hefei to invest in the 15 GW large-size module project in Hefei, according to a stock exchange announcement. It will be located in Hefei Circular Economy Demonstration Zone in Anhui province and equipped with 30 PV module production lines.

The entire 15 GW project is expected to cost RMB 2.1 billion, and complete within 12 months. GCL-SI sees 30% less labor costs by setting up the fab in Hefei as compared with Jiangsu and Zhejiang, as well as easy supply of PV glass as raw material from Fengyang, Hefei and Bengbu, among other factors bringing down its total investment.

Once the project is completely ramped up, GCL-SI expects the fab to generate RMB 9.026 billion operating income annually, achieving a sales profit rate of 11.3% with a payback period of 6.28 years.

Why the change?

GCL-SI said the expansion is in line with its long-term strategic plans and market demand of the PV industry, and quickly increase its high efficiency large size module production capacity to better meet customer needs while increasing its market share.

Behind its decision to invest in large sized modules, GCL-SI points towards gradual decline in the cost of large size modules and their production processes with which the investment required has also dropped significantly. "Compared with the shingled module, the investment is smaller and the investment cost-effectiveness is higher," it explained. Market acceptability of solar modules has also gone up, and hence the management has decided to focus resources on Hefei to produce large sized modules.

The manufacturer had planned to invest RMB 1.07 billion on constructing the 2.5 GW shingled module project in Hefei with an estimated construction period of 12 months, and before that announced investment in a 2.5 GW shingled module fab at Funing. In Feidong County, Hefei it has been investing in a 60 GW module production fab to roll out 210mm wafer sized modules (see GCL System Announces 60 GW Solar Panel Factory In China).