In this special edition of Contractor’s Corner¸ solar tracker supplier Soltec has found success in cutting supply chain delays by having a global manufacturing footprint. Colin Caufield, sales vice president at Soltec, discusses how the company has successfully navigated trade roadblocks like steel tariffs and supply chain delays, and what that means for the U.S. utility-scale solar market.
Below is a portion of the company’s Solar Spotlight podcast with Solar Power World, but be sure to listen to the full episode on your favorite podcast app.
So what challenges are arising in the supply chain for photovoltaic solar projects?
There are many. I’ll try and break it down piece by piece. For the past several decades, but certainly in recent history as it relates to PV projects in the United States, there’s been a total dependence on “just-in-time” deliveries, especially those that are coming from overseas. Across the entire value chain — especially as it relates to our product, which is trackers — whether it be steel beams, piles, mounting rails, other forms of hardware, electronics. These are all part of a complicated supply chain that depends on many different countries of origin to try to get to the best and most aggressive price for our customers.
What we saw over the past couple of years were tons of interruptions to that supply chain. Some of them were happening at the manufacturing level; a lot of them, which was global news, were happening on maritime shipments, and congestions at ports or even canals that were famously being blocked. They were all types of interruptions and challenges when it came to getting things on time to sites. The whole just-in-time delivery thing wasn’t as dependable as it had been in the past, and there’s been a lot of adjustments that everybody, ourselves included, has needed to make.
What are the solutions that Soltec is adopting to deal with supply chain constraints?
It’s been all about diversifying the supply chain that we have. Adding new countries of origin, adding new manufacturers, so that we’re not beholden to one source or another. We do have a bunch of suppliers that are in Spain, because that is where our company is headquartered, and that can give us anything from piles to tubes to rails to even the assembly of the electronics, for example. We control a lot of that supply chain because our team does the manufacturing, so we own some of that, which is a great way to mitigate risks and prioritize depending on what the list of projects is in front of us.
There’s also been a lot of work to find new sources for gearboxes and motors, which in the past had been really dependent on Southeast Asia as a source for that. We’re putting more and more work into finding suppliers that are in different locations throughout the world. Maybe most importantly, we’ve been bringing more suppliers on that are local to the United States. We have more and more pile manufacturers. We have steel manufacturers that can cut our torque tubes and cut our purlins that we hang our modules on. We have hardware providers, and we have the ability to receive material and do certain assembly of components in Mexico and the United States that is allowing us to bring material in and avoid a lot of the tariffs that we would have if we were to just have something manufactured and assembled in certain countries of origin. So there’s been some shuffling of that and some adding of new potential suppliers.
What new challenges do you face given the current circumstances for constructing new projects in the United States?
Maybe this will be a similar answer. We’re seeing that there’s been price pressure, of course, because prices have been going up. It’s harder for some of the projects to pencil that were let’s say planned back with the state of the world starting in 2018 — projects that are finally starting to be built now, because the expectations that they had at those times are just no longer the current state of affairs. I’d say those are probably the biggest challenges, just that our customer base is seeing that they have to totally readjust their expectations, either on how profitable a project will be, whether or not it will pencil at all.
At Soltec, which market scope are you actively covering in the U.S.?
Folks here probably know us mostly for being a tracker supplier for utility-scale projects. Projects that were 20 MW and greater, and coordinating with the EPC of the given project, to supply them with the trackers and maybe engineer the plant to some extent. That was really the limitation of the scope that we had. We did offer some installation services in the past as well.
We’ve really widened those offerings. So, now, we’re focusing on utility-scale supply of our trackers. We have a one-portrait product and the two-portrait product that we’ve always had. The one-portrait product we call the SF1, the two-portrait product we call the SF7. We still offer some installation services depending on the states where they’re being delivered, even for some of those larger utility-scale projects. The newer offerings are related more to the distributed generation markets. Specifically in the Northeast, and there’s been some in the Midwest where we’ve had some success recently bringing on new customers.
You already talked a little bit about your tracker structures, but what would you say is your flagship product for projects in the U.S.?
That’s a great question. So, flagship, I want to lean toward the SF7 as being the product with which we have the history. The SF7 is the two-portrait product, and that has more than 2 GW of installations here in the United States. However, we’re seeing, especially as it relates to really large utility-scale projects, and especially those that are in conditions, let’s call them parcels, that are very square, very flat, that have friendly soil conditions. We are providing the SF1 on most of our quotations for those projects. The reason is simply that is uses far less steel, and as steel has gone up in price as a commodity, that has significantly impacted the overall capex of these projects. So our best bet, and our customers’ best bet for some of those larger utility-scale projects where the conditions are very favorable, is to look at our SF1 product. It just has a cheaper price to buy and it’s all in those conditions.
This podcast is sponsored by Soltec