Canadian Solar for Renewable Energy
Write an essay on Canadian Solar.
Canadian Solar as to expand its operations by getting into a new market where the company can export its solar products. The appropriate market may be chosen on the basis of the demand in each. While countries present in USA and UK already have stated to consumer solar power, some of the developing countries in Asian and African continents, the energy consumption is increasing but the use of renewable resources is very less. When considering the percentage of renewable energy used out of the total energy consumption, it can be seen that, Only American countries are above 25% while other countries in Europe, Eurasia, Asia and Africa. Asian countries like China, India and Malaysia are on the lowest side. India is among the highest consumer of energy that is produced through oil or coal. However, due to increase in oil prices, there are still lot of places in India that are struggling to receive power and thus, an alternative source of energy such as solar power may be an appropriate next step and the same has also been encouraged by the government (Lohani, 2013). Thus, India may be chosen as one of the potential markets for the expansion of Canadian Solar. In a similar manner, Malaysia is another country that consumes most of energy produced using Oil. However, the government of Malaysia has been supportive to new solar power establishments to generate more power. Thus, Malaysia would be another attractive market for the investment in Solar energy production.
To do this, two international markets are considered including East Africa and Malaysia. These markets have to be studied to come up with a choice of one of the two markets by identifying which market more profitable and presents more opportunities for succeed. To do this, a primary research is being proposed for exploring the two markets such that the selection of more appropriate market for expansion of Canadian Solar company (Wingfield & McQuillen, 2012).
Canadian Solar is a manufacturer of solar panels and systems that was established in the year 2001. The company made $1.9 billion in sales in the year 2011 which included shipments of 1323 Mega Watts to different countries of the world. The company is operating in 11 different countries including Canada, Germany, Italy, Japan, South Korea, Spain, Australia, U.S.A., Singapore, Hongkong (PRC) and China (PRC).
Besides manufacturing solar components, the company also provide solar energy solution through its diversified pipeline having 9 GW of capacity. The company has its manufacturing facilities in the Ontario and the company employs over 8,900 employees worldwide. These plants manufactures different solar products like wafers, ingots, solar cells power systems, PV modules and other specialized products (OECD, 2008).
In 2008, the company became the first manufacturer of solar modules to have an online compliant testing laboratory. The company has achieved certain environmental and quality certifications over the years of its operations including ISO 9001, quality management system, ISO 14001, environment management system, ISO/TS 16949, automotive standard for PV quality control, OHSAS 18001, occupational health and safety and PV CYCLE, full member certification.
The Solar Modules produced by the company have not only achieved international standard certifications but also maximum ratings in Ammonia (NH3) and PVUSA tests, and have passed IEC 61701 salt mist resistance testing. These modules also passed IEC 60068-2-68 specified blowing sand test.
The company modules have strong capabilities and the company has achieve significant number of certifications that are not easily to replicate by competition and thus, the company has retained a very strong position for its brands in various countries where the products are exported.
With continuous growth of the company over the years, almost 15% of increase was seen in revenues in the year 2015. Out of these earnings, the amount of $2.93 were allotted to the market per diluted shares.
The new markets that the company is going to explore include Malaysia and India. Malaysia is located in the Association of South-East Asian Nations (ASEAN) having two regions that are separated by South China Sea. It is federation of 13 states with 3 of the Federal territories. Since its independence in 1957, parliamentary democracy has been practiced in the country using a constitutional monarch that keeps rotating its positions after every 5 years (UNFCCC, 2011). The four fifths of the 330,000 sq km territory in Malaysia is covered by Tropical Rainforest. The country does have natural resources for solar energy production but with low level of electricity received by rural and urban areas, production of Solar energy and related products is a big challenge (Ikiara, 2009).
Its rich natural resources provides the region an opportunity for growth and the government has been supporting the solar energy initiatives through offers of incentives and extending support to producing organization (Goodrich, 2012). Malaysian Energy Efficiency Improvement Programme (MIEEIP) and Centre for Education and Training in Renewable Energy and Energy Efficiency (CETREE) are two such efforts taken by government in this space (2 Olz & Beerepoot, 2010). Around RM13.8bil of the Foreign Direct Investments are directed to Malaysian companies setting up Sola Products Manufacturing Facilities. With increased consumption of energy and rising cost of non-renewable energy products has pushed the market towards solar energy and the requirement of the same is growing by 20-25 % every year (Brandt & Wei, 2012).
Malaysia countries have small scale economies with relatively high Gross Domestic Products. These countries largely depend on the imports of oil from different countries. Energy consumption in the Malaysia countries was early solely dependent on the energy produced by this oil but there are many initiatives taken towards production of Solar energy in the country as oil is not a renewable resource and is gradually exhausted and there is a need to use a renewable source of energy for power consumption (CCAP, 2012). Further, with supportive governmental policies for the solar production industry, the market presents a decent opportunity for the sale of solar power modules and thus, Canadian Solar can export solar products to the Malaysia countries (Poullikkas, 2010).
Malaysia region has high solar radiations and thus provides a very favourable environment for solar energy implementations. However, solar generation has not been established yet in these countries because of certain major barriers faced by the regions including lack of adequate strategies or policies, lack of funds required for implementations, lack of capacities of government, and lack of awareness of benefits of solar systems. Photovoltaic technology is used by n the countries for various purposes such as security lightening, water pumping, and various stand-alone systems. This technology is sold by Canadian Solar and thus, this may be one of the major products that stands potential of sales in the Malaysia regions (Schwerin, 2010).
The other country that is being considered for exploration to identify is India and this research would attempt to study if the same would be an ideal destination for development of the market for solar power systems. The country has grown significantly in the economy but there are restrictions in terms of power generation in the Indian countries (Robbins & Burger, 2013).
Energy can be considered as an important factor for growth in India as it plays a crucial part in development of industries and social communities supporting the economy through generation of knowledge, skills and employment as well. The population of Middle class is the country is huge and the demand from this class has led to increase in consumerism (Batra, 2012). Energy demand has increased drastically over the years but the production of the same is not able to match with demand which is why a huge demand supply gap has been generated. It has been found that in India, there are 400 million people who still do not access to electricity in villages (The Worldwatch Institute, 2012).
In India, over 1,800 MW of solar energy is produced by Solar PV installations majorly done in Gujarat and Rajasthan catering to 18% of the solar power market in the country. A major share of the solar energy products come from foreign manufacturers contributing 88% to solar power services. The imports of Solar energy services and products in India has been on rise for long time and the country has seen a major surge of CAGR which was 188% between the years 2010-12 (Subramaniam, 2013).
Solar sector is growing fast in the country yet it is at a very nascent stage. Although, there are Solar Productions by domestic suppliers in the country but many manufacturing companies in the space are being shut over the years and technological initiatives have been suspended because of erosion of the productive assets and capital budgets (Brown, 2015). Remaining companies producing solar equipments are operating at sub-optimum levels. There is a serious gap in demand and supply which can be filled by selling solar products in the Indian market which Canadian Solar can take as an opportunity (J., 2012).
Moreover, in terms of investments in India on Solar Power products, certain benefits can be important to consider as they make the market more attractive than its counterparts in the Asia region. The country has a very low cost of finance and the same is more readily available for technology productions (Shah, 2011). A support for required infrastructure has been provided by the government. Thus, the market not only presents opportunities for Canadian solar in terms of demands for energy from consumers but the country also has some economic and political benefits that would make the business model feasible and sustainable if the company consider its expansion in the country (Singh, et al., 2015).
With the identification of a new market, business opportunity to increase sales and profits of the company after it is launched in the market with an objective of attaining 18% of returns on investments.
1. Identify markets that present opportunity for the company to exports its solar power systems and solutions
2. Identify opportunities in the countries to establish solar power system sales channel.
3. Identify if government of these countries would support the operations of the company and to what extent.
4. Identify potential in the identified countries grouping the customers into low, medium and high sales potential
Secondary Research Proposal
The research would make use of primary and secondary research methods. In the secondary research, various secondary sources such as books, journals, magazines and other types of authentic publications would e used to collect data that can be used for solving the four key objectives of the research. In-text citations would be placed in the data to highlight the sources from where the data has been taken.
Primary research Proposal
Background: Canadian Solar was a manufacturing company that was established in the year 2001 and the company had reaches a sales of $1.9 billion by the year 2011. The company has its operations spread across 20 countries in 6 continents of the world. The company is planning to expand its operations to different countries for which two regions including Malaysia countries and India would be explored and assessed to understand which of the countries would e most appropriate for expansion.
Research Problem: This research would attempt to explore if a profitable growth in sales can be achieved by the Canadian Solar company if it sold its products in the selected countries as an attempt to expand its operations such that appropriate market would be selected.
• TO assess what sales potential each of the countries have for the Canadian Solar products
• To forecast sales figures for each of the products of the company in each of the identified counties including sales figures of wafers, ingots, solar cells power systems, PV modules and other specialized products.
• The sample of the population chosen for this study would include 50 people from the organization.
• Identify unit for sampling from the managers of the company
• Access industrial directory to obtain data on the sizes and sales of goods.
• Survey employees of the organization on the potential of the products in the selected countries through the use of questionnaire which would be sent to all the respondents for data collection.
Data obtained from the primary survey would be statistically analysed using various descriptive measures and tests including cross-tabulations, chi square tests for non-metric data, ANOVA tests for metric data, correlation coefficients to understand strength of relationships between various variables, multiple regression analysis to explore strengths in the relationships between independent and dependent variables.
The analysis of the data obtained would be done using a feasibility study about the business in specific countries so that appropriate country may be chosen. The feasibility study would be conducted by exploring various aspects of the country with respect to the Canadian Solar products including:
• Country Portfolio Overview: A portfolio of different countries in the regions would be explored on the basis of various characteristics of the countries.
o Elements of System Reforms: Government system reforms would be studied to understand to what extent do these systems support the development of the business in the new countries.
o Local research capacity and availability of partners: The country would be explored to understand the potential of conducting a high quality research in the country on its reforms, opportunities and other characteristics that may be important for the company for its expansion
o Political Support: The country would be explored if the political system supported the operations if the company has to expand its operations.
o Partnerships: To conduct the feasibility study, it is important to explore if the research is partnered with right people in the chosen countries to be able to conduct research efficiently for understanding the market (UK AID, 2015).
• Business Case Analysis: The business case of the company expanding into the new market would be explored to understand the viability of the project in the current situation.
• The research on the project potential would be started as soon as Canadian Solar approves the research project.
• The research would take a time duration of 3 months.
• The cost of research would be $20,000 CAD.
The implications of the expansion of the operations in new markets would result into increased sales through exports of solar goods from the manufacturing unit of the organization and this would bring profits to the company in the long run as well as a brand placement in the new country.
This research proposal was prepared in order to come up with a plan to suggest a research on the potential markets that could be used by Canadian Solar which is the company into manufacturing of solar products and components. The chosen countries include those Malaysia and Indian such that the research suggest exploration of each of the countries for studying the feasibility of the launching of products in these countries. With the choice of appropriate country selected for the expansion, the company aims to generate profitable sales for the organization. The research would involve exploration of the sales and growth potential of the company in the chosen states such that decisions could be made on the right choice of the market for immediate expansion.
2 Olz, S. & Beerepoot, M., 2010. Deploying Renewables in Southeast Asia: Trends and Potentials., s.l.: International Energy Agency .
Batra, A., 2012. India Environmental News Compilation, s.l.: Switchboard (Natural Resources Defense Council (NRDC).
Brandt, T. & Wei, C. S., 2012. Electrical & Electronic Industry in Malaysia, s.l.: DE International.
Brown, M., 2015. Status of the EU anti-dumping and anti-subsidy proceedings, Europe: Brussels LLP.
CCAP, 2012. A COMPREHENSIVE APPROACH: Capacity support and incentives grow the photovoltaic market in Malaysia, Washington, DC : Government of Malaysia.
Dickson, C. et al., 2016. 2016 Top Markets Report Renewable Energy: A Market Assessment Tool for U.S. Exporters, s.l.: International Trade Administration.
FAO, 2003. Energy supply and demand: trends and prospects, s.l.: FAO.
Goodrich, P., 2012. Assessing the drivers of regional trends in solar photovoltaic manufacturing. Journal of Energy and Environmental Science, p. 2812.
Ikiara, M., 2009. Trade in Environmental Goods & Trade in Environmental Goods & Services, s.l.: WTO.
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Lohani, B. N., 2013. Energy Outlook for Asia and the Pacific, s.l.: ADB.
OECD, 2008. Promoting Sustainable Consumption: GOOD PRACTICES IN OECD COUNTRIES, s.l.: OECD.
Poullikkas, A., 2010. Technology and market future prospects of photovoltaic systems. INTERNATIONAL JOURNAL OF ENERGY AND ENVIRONMENT, 1(4), pp. 617-634.
Robbins, N. & Burger, M., 2013. Feasibility of Solar Power in South Africa and the existing barriers to its implementation. Advanced Research in Scientific Areas, 2(6), pp. 402-411.
Schwerin, A., 2010. ANALYSIS OF THE POTENTIAL SOLAR ENERGY MARKET IN THE CARIBBEAN , s.l.: GTZ.
Shah, A., 2011. Solar Mission of India Explained – Objectives, Targets, R and D, Manufacturing, Three Phases of JNNSM, Off Grid Solar, s.l.: Green World Investor.
Singh, A. D. et al., 2015. Securing the Supply Chain for Solar in India, s.l.: FICCI Subgroup on Securing Solar Supply Chain.
Subramaniam, K., 2013. Future of Solar Energy in India, s.l.: Moser Baer Solar Ltd .
The Worldwatch Institute, 2012. India’s National Solar Mission: A Market Analysis of Phase 1, s.l.: WorldWatch Institute.
UK AID, 2015. Country Selection Process: Criteria for Feasibility Analysis, s.l.: RISE.
UNFCCC, 2011. Malaysia Second National Communication to the UNFCCC, s.l.: Ministry of Natural Resources and Environment.
Wingfield, B. & McQuillen, W., 2012. “US imposes Anti Dumping Duties on Chinese Solar Imports, s.l.: Bloomberg.com.
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