By Wang Weiwei and Lei Hanfa

With the exacerbation of the European debt crisis, demands in the global photovoltaic market have been shrinking precipitately. The price of photovoltaic modules and basic polycrystalline silicon material has been fallen sharply. In a time when the entire industry is in a woeful plight, how does Yingli, a Chinese photovoltaic enterprise that accounts for 10 percent of the global market, cope with this grim situation?

Forward-looking strategy

10 AM, the reporter ran into a briefing meeting of directors from Yingli's subsidiaries in Europe and America. These directors, who have come from the market frontier of U.S.A., Germany, and Greece, brought with them the conditions, and marketing problems and suggestions to the meeting. Miao Liansheng, director of the board of Yingli Green Energy, listened to report and voiced his opinion from time to time.

In Miao Liansheng's view, forward-looking strategy is the soul of an enterprise. When you are in a crisis, you should make preparation in advance for industrial opportunities after the crisis. On September 29, the experiment sample of China's first 20 kilowatt-hour magnetic suspension energy-storage flywheel, developed by Yingli independently, was completed. This revealed some clues about the next strategic goals of Yingli. This kind of energy storage technology is a key for new energies to evolve from substitute energies into mainstream energies. In this respect, Yingli commands preemptive opportunities.

Two years ago, something similar happened. In February 2009, when the photovoltaic industry was pulled into a recession by the international financial crisis, Yingli disclosed its high-purity silicon production project in its annual report. 69 Silicon, which was invested by Yingli, would adopt its proprietary "new silicane method" to produce solar-grade and electronic-grade high-purity silicon, with an annual production volume of 3,000 tons in its first stage. This not only broke the polycrystalline silicon blockade imposed by international tycoons, but also enabled Yingli to establish a vertically integrated operation model that incorporates polycrystalline silicon production, silicon ingots casting, silicon flaking, photovoltaic battery production, photovoltaic modules manufacturing, and application system.

Also, Yingli has started making deployment in the Chinese market long ago. In 2010, Yingli became the supplier of 70 percent of the modules in the country's Golden Sun Demonstration Project. Although its profit was reduced by US$ 90 million in the project, it managed to familiarize more domestic clients in the photovoltaic industry with the Yingli brand.

Thanks to such forward-looking endeavors, Yingli scored sales of 1063 megawatt in 2010, pulling in revenue of RMB 13.7 billion Yuan and its photovoltaic modules commanding 10 percent share of the global market. In the second quarter of this year when the market was slowing down, Yingli achieved a net income of US$ 680.6 million. Domestically, Yingli has completed supply of 110 MW of modules to Wulan and Golmud in Qinghai and 35 MW to Xitieshan this year.

Cost and innovations

Hu Zhiyan, who joined Yingli in 2007, was appointed Technical Director of the company on November 1. Having been following the Panda series projects for a long time, she told us an interesting story. Panda is the name of the N-type high-efficiency solar battery developed independently by Yingli. The first Panda projected was completed really fast, taking only 19 months from R&D to production. The maximum conversion efficiency of this type of batter is as high as 19.89 percent. It is one of the three most efficient solar batteries in the world.

However, the subsequent Panda project signed in July 2010 slowed down unexpectedly. When that battery project was about to be put into bulk production, it was found that the cost of the material of a certain module so high as to make the overall cost of the battery undesirable. Production of the project was postponed, and researchers have been looking for different ways to reduce cost.

These two high-efficiency battery projects, one being fast and the other slow, reflects the importance of cost in Yingli. Hu Zhiyan said that cost is an important factor in the feasibility analysis reports of Yingli's R&D projects.

Priority in cost control has somewhat spurred Yingli to innovate. Not long ago, some minor alterations were made on the 11 used silicon flakes washing machines in the workshops of one of Yingli's subsidiaries. The alteration may save Yingli up to RMB 2.4 million Yuan of water cost per annum.

Facing the crisis in the industry, Miao Liansheng said: "Reduction in cost will not reduce the standard and quality of our products in any way. Yingli will kick off a new round of cost and technology remodeling in the near future".

Deployment beforehand and competition of soft strength

Miao Liansheng said frankly that one of the purposes was to build employee loyalty, but a more important object was to improve employee qualification and strengthen the company's soft strength.

"As a matter of fact, the present recession of the photovoltaic industry is nothing but a normal periodical adjustment of the industry". In Miao Liansheng's view, after this round of industrial adjustment, the competitiveness of a photovoltaic enterprise will lie in its soft strength, including scaled economic efficiency, innovation ability, brand, and team support capacity.

Therefore, Chinese leading photovoltaic enterprises, including Yingli, should take this downturn as an opportunity to switch from scale expansion to brand building. Chinese Leading photovoltaic enterprises, having seized major development opportunities in the market and taking scale and cost advantages, have become leaders in the global photovoltaic industry. Can they maintain their leadership after this recession? According to Miao Liansheng, the answer is to transform and upgrade.

Another endeavor of Yingli to improve its soft power is brand building. After sponsoring the FIFA World Cup South Africa, Yingli became an official sponsor of the 2014 World Cup Brazil in June this year; in September, the slogan of "producing solar power that ordinary people can afford" appeared in Yingli's TV commercials. Brand building effort of Yingli has just started. This is a preparation for the imminent era of mass consumption of the photovoltaic industry.