Solar energy industry growth may offset others’ slump

Total installed U.S. PV capacity is expected to more than double over the next five years, according to the Solar Energy Industry Association.

As some industry segments experience contraction in 2019, astute stamping manufacturers look to other segments to supply to. A segment that requires parts that can be stamped with equipment currently in their plants, therefore requiring the least upheaval in changeover, is the most attractive. One such segment comes from overhead: the solar energy industry.

The solar energy industry is growing, providing a new business opportunity for stampers/fabricators such as General Stamping & Metalworks (GSM), according to President John Axelberg. The data backs up his view.

Solar Growth

Total installed U.S. PV capacity is expected to more than double over the next five years, according to the Solar Energy Industry Association. The U.S. installed 1.7 gigawatts (GW) of solar PV capacity in Q3 2018 to reach 60 GW of total installed capacity, equivalent to powering 11.3 million homes. The cost of installing solar dropped by more than 70 percent since 2010, according to the association.

The Tariffs Effect

Axelberg said that most of the manufacturer’s customers are global, sourcing from a global supply chain. Its major solar customer is one of the leading single-axis tracking systems manufacturers for utility-scale projects.

“So it’s pretty high volume.” GSM’s parts go into utility-grade solar energy projects in Australia and South America, as well as the U.S. “Those are the two biggest non-U.S. destinations for our parts.”

The parts are made of 5⁄16-inch-thick grade 80, G-90 galvanized steel, so GSM consumes a lot of steel. The Section 201 solar tariffs and Section 232 steel and aluminum tariffs have changed supply dynamics with the manufacturer’s largest solar customer. “For several years we were the only supplier for all the North American projects. The delta has changed with the steel tariffs. The tariffs really blew it up,” he said.

The solar OEM now sourcing from GSM for North America is looking at manufacturers from other countries to avoid the tariffs—at least for the time being.

“The delta has changed as steel pricing between the U.S. and the rest of the world started widening,” Axelberg said. “We became less competitive, and now we’re actually facing competition for North American projects from companies in Portugal, Spain, India, Turkey, and China.”

Parts Are Laser-Cut, Then Stamped

Because the material is heavy-gauge steel, material utilization is a major determiner of which processes are used in making the part.

For one solar part, the customer needed 120,000 of them. It would not have been cost-effective to stamp the blank because the material yield was so poor, Axelberg relayed. Stamping it using hard tooling would have meant a 21⁄2-year return on investment.

Alternatively, the company was able to get excellent material utilization by nesting the blank for laser cutting, and its 8,000-watt fiber laser is “screaming” through the material. “So it just didn’t make sense to stamp it.” Even as quantities have increased, they’re blanking it on the laser and forming it on a two-stage forming die on a stamping press.

Timetable: Slow Then Fast

One challenge is in the complexity and scheduling, Axelberg said. “Solar is really an unpredictable industry. Projects are huge, and often because of the complexity of financing, they’re complicated deals. Often they don’t get finalized until right before the project has to go in service.”

Fortunately for GSM, that sudden urgency—and its ability to meet the urgency—has ushered in more business because overseas suppliers cannot meet those demands.

“We’re seeing quite a bit of growth in 2019 that we did not expect,” Axelberg said. “There are also cash flow factors because when they [OEMs] buy something from China, they have to pay for it when it goes into the container, and then it’s on the water for a month and in the port for a while.

Meanwhile, American suppliers are giving them terms.

“All in all, solar has been a good industry for us,” Axelberg concluded.

General Stamping & Metalworks, www.gsmwinc.com