In the second episode of the Your Energy Answers podcast, Rami Fedda discusses his journey in the solar industry and the sector's evolution, particularly the increasing influence of China.
Starting his career at SolarX, he saw the transformation of the factory into the largest solar cell factory worldwide at Olympic Park. Fedda capitalised on the surging raw material prices in 2007, becoming a prominent supplier to Longi, a major Chinese solar company.
The podcast also discusses the robust growth of the Australian solar industry due to subsidies and the emphasis on quality. Fedda also shares insights into solar panel manufacturing, the significance of quality over price for consumers, and challenges of supply chain issues, market demand, and exchange rates.
Future prospects in the industry, potential for panel recycling, and safeguards for warranty claims are also discussed. A great insight into the solar coaster years of Australia's renewable energy industry.
Rami Fedda at YEA Podcast EP2
This 2nd Your Energy Answers podcast episode revolves around Rami Fedda’s experiences in the solar industry, highlighting his journey and his take on the industry’s evolution, particularly in relation to China’s influence.
In the early ’90s, Rami began his career at SolarX, a solar plant in Villawood, Sydney, after finishing high school. Balancing night shifts at the plant with his daytime accountancy course, he was a part of the factory that merged with BP Solar and became the largest solar cell factory in the world at the Olympic Park. Rami’s role in the new setup involved controlling the shipping of cells from Sydney to various global locations and sourcing key raw materials.
Around 2003, with the burgeoning demand for solar that outpaced BP Solar’s production capacity, the company began outsourcing its raw materials and some cell supplies. Around the same time, Australia was exporting solar panel manufacturing material including raw material to China, in stark contrast to the current situation where China is the primary manufacturer and supplier to Australia.
Opportunities in Polysilicon exports
In 2007, Rami left BP Solar to seize the opportunity created by the skyrocketing raw material prices. He became a supplier to solar manufacturers in China, sourcing polysilicon materials from Europe and the U.S., and repackaging and re-exporting them from Australia to China. This venture earned him the position at one point of being the largest supplier to Longi, a major Chinese solar company.
The podcast conversation highlights the tremendous growth of China’s solar industry and how government support and a large local market have significantly contributed to its success. The shift from manual production processes to automated and high-tech processes has also contributed to the increased efficiency and quality of Chinese-made solar panels.
Fedda recounts his interactions with Andrew Burgess, leading to the establishment of their solar venture. Rami Fedda, together with Andrew Burgess, capitalised on the growing residential solar market in Australia, which was buoyed by attractive rebates and feed-in tariffs. Their partnership led to the establishment of their own solar business, Solar Juice, navigating the dynamic industry landscape.
He also shares his experience navigating the fluctuating prices of raw materials for solar panels. His strategy to source these materials from Europe and the U.S. to supply to manufacturers in China led to substantial profits.
The Australian solar industry emerges
Fedda recalls the significant boost the Australian solar industry received from an $8,000 rebate for a 1 kW system and a 60-cent feeding tariff in New South Wales. These subsidies transformed the industry, reducing system payback time from 12 years to around 4-6 years, depending on the system size.
Rami’s initial team included an old school friend, Harry Chami who he coincidentally ran into at a local shop. The first two containers they received were Hyundai panels, and the subsequent batch was from SolarX, the only Australian manufacturer at the time. Fedda attributed the success of his company’s first full year, during which they turned over $60 million, to sourcing hard-to-get inverters globally, particularly from SMA in Germany.
Despite the high carbon footprint of air freighting these inverters, customer demand left them with little choice. The emphasis on quality in these early stages set them apart in the market, although they had to compete with Chinese imports. Fedda noted that early industry-wide failures with lesser-known Chinese and Taiwanese inverter brands resulted in a focus on more reliable, high-end brands.
The podcast then delves into the challenges of warranty, quality issues, and the need for local after-service support in the solar industry. Fedda emphasises the lessons learned from these early failures, contributing to a shift towards high-end quality products. He elaborates on the fluctuating brand loyalties in the solar panel market, attributing these changes to price competitiveness and similar product aesthetics among the major brands.
OEM – not all is what it seems
Fedda mentions the potential for manufacturers to produce panels for popular rival brands when demand exceeds their production capacity, raising concerns over warranty obligations and certification requirements. Despite these challenges, Fedda remains optimistic about the industry’s future.
In the podcast, Markus Lambert asks questions about Rami’s journey in the solar power industry, focusing on the challenges and the evolution of the sector over the past 15 years. Fedda shares how his company has stood behind products even when they have not delivered as promised, demonstrating a commitment to their customers.
Fedda discusses his regular travels to China to build relationships and purchase products, noting the significant transformation in the country’s production capabilities and technologies over the years. He is particularly impressed with the sophistication of new facilities and the innovative tech used there. However, he also points out the high staff turnover in China, with middle management often hopping to different companies. This necessitates maintaining a good relationship at the brand level.
The discussion then moves to the dependency of the global renewable energy sector on China. If China were to halt supply, it could lead to a significant problem due to the lengthy process and high costs associated with building panel factories in other parts of the world. Despite this, Fedda mentions efforts to build wafer plants in the U.S. and India could expand the industry.
Want solar – go for quality
Fedda also provides advice for customers looking to buy solar, emphasising the importance of quality over price. He suggests looking at after-service support, the company’s track record, and their presence in the local market. However, the solar industry and distribution especially is not without its challenges, with variables like supply chain issues, fluctuating market demand, and changing exchange rates affecting the business.
Fedda also talks about how his company picks the right products for each season. He gives an example of introducing a new Chinese panel brand, Tong Wei (TW Solar), which produces its own poly silicon, ensuring quality control. He notes that customers are increasingly concerned about the source of raw materials due to issues of forced labor.
Fedda shares his experience of visiting factories and how that helps in judging the quality of the products. He narrates an instance where he had to terminate a contract with a well-known brand due to subpar quality control in their factory. He emphasises the importance of maintaining strict quality standards to ensure the delivery of superior products to customers.
Markus Lambert and Rami Fedda delve into the complexities and considerations within the solar industry, particularly regarding manufacturing and recycling processes, the potential for a panel recycling program, and the need for strong meaningful warranties and accountability.
Fedda asserts that the solar manufacturers they partner with are above board, considering many of them are publicly listed companies with an image to protect. He highlights a case from 2012 where a manufacturer was penalised for environmental malpractices, suggesting this has likely deterred others from similar conduct.
How long do solar panels last?
They discuss the lifecycle of solar panels, suggesting that properly produced panels should last 20+ years. With regards to recycling, Fedda believes there’s an emerging business opportunity for recovering valuable materials from panels but sees this as a future consideration rather than an immediate necessity.
The conversation transitions to discussing potential safeguards for warranty claims, such as the idea of a $3 levy per panel or escrow accounts to handle potential warranty issues if a company exits the market. Both express concern over a chain of responsibility that eventually falls on installers or distributors if manufacturers disappear.
Lambert and Fedda note the contradiction in consumer law – designed to protect consumers but potentially leading to the collapse of innocent companies should manufacturers fail to honour warranties. They suggest there’s a marked difference between a warranty from a reputable manufacturer and one from a less reliable company.
The conversation segues into the impact of EVs on energy consumption and the role of solar in mitigating that impact. Fedda shares his personal experience of using solar energy to power his EVs and suggests dealerships may start offering solar systems with EVs. They discuss the bidirectional energy sharing between EVs and homes, though Fedda suggests practical issues may hinder its widespread adoption.
What the future will hold
Fedda foresees growth in the industry, especially as production and affordability of stationary storage increase. He suggests larger solar systems will naturally follow as homeowners install batteries. He anticipates some homeowners may need to upgrade their systems to meet these requirements, a move that could potentially detract from the aesthetic appeal of their homes.