SOFIA (Bulgaria), June 28 (SeeNews) – Bulgarian provider of products and services for the solar industry Solarpro Holding is eyeing a region-wide footprint in a bid to temper the business risk associated with government support for renewables, a member of the company’s board said.
“Our business is highly dependent on the regulatory framework. That is why having a strong foothold on several markets, especially in close geographic proximity, would work as a good hedge against the potential business risk from changes in the level of government support for renewables,” Mitko Mitev told SeeNews The Corporate Wire in an interview at the company’s office in Sofia.
“After becoming the biggest vertically-integrated provider of engineering, procurement and construction [EPC] services for the solar energy industry on its home market, the next logical step in the development of Solarpro Holding was to expand its footprint in the region.”
Solarpro Holding (www.solarpro.bg) has a portfolio on its home market comprising a total of 32 solar parks in various stages of completion with total nominal capacity of almost 100 megawatts-peak.
BUSINESS OPPORTUNITIES ACROSS THE BORDER
The company already has several projects at different stages of development in neighbouring Macedonia, Serbia and Romania. It registered a subsidiary in Macedonia earlier this year and is in the process of setting up a unit in Serbia.
The contract signed recently for a 1.0 megawatt (MW) solar park in Macedonia was Solarpro Holding’s first EPC deal won abroad, formally marking the start of its regional expansion.
“We started activities in Macedonia, Serbia and Romania simultaneously, attracted by the potential of their solar markets and their accessibility in terms of logistics. However, the regulatory frameworks in place in those countries differ significantly and require tailored approaches,” Mitev said.
Romania’s incentive scheme for solar power is based on a green certificates model. Green certificates are traded on a regulated market at a defined price range with market forces allowing for huge variations in remuneration.
This makes shopping Romanian solar projects to potential financiers a tall order as it is impossible to demonstrate potential for a steady revenue stream, Mitev said, adding that Solarpro will most likely make its first steps on that market with a company-owned project.
The company has already bought land in the Calarasi area, on the Danube, where it plans to develop its own solar park and, in the process, learn the ropes of doing business on that market and announce its presence to potential business partners. “We are currently studying the local procedures for the repurposing of the land and for the granting of the relevant construction and otherwise permits.”
In Serbia, which has a feed-in tariff system, Solarpro Holding plans to seek permits for company-owned solar parks that will be developed on reclaimed industrial land. The company is planning a combined capacity of 6.0 MW in two locations.
The Macedonian market was approached from a different angle, Mitev said. “The authorities had already handed out licences to around ten companies for projects of 1.0 MW each. There the company entered the market as an EPC contractor.”
The official added that Macedonia also affords very high preferential tariffs for projects of up to 50 kilowatts and the company expects to be hired soon to carry out such a project.
Solarpro Holding, alongside a Bulgarian-based partner, is currently involved in a government tender for an EPC contractor for a 10 MW project in Cyprus. “We filed our offer three months ago and now we are waiting for an outcome from the tender procedure.”
Turkey, Greece and Croatia are also on Solarpro Holding’s radar. “In Greece we are trying to enter the market through the segment for building integrated PV systems since it is very difficult to find financial backers for large-scale developments. Turkey also has spectacular potential. We are keeping an eye on Croatia as well.”
TECHNOLOGICAL SHIFT AT HOME
At the time of the 2009 launch of the Solarpro photovoltaic panels factory in Silistra, on the Danube, thin-film photovoltaic modules were all the rage. “However, now they are being overtaken in the technological race by monocrystalline and polycrystalline modules and we have started to restructure our production to reflect that shift,” Mitev said.
On top of that, Bulgaria’s energy regulator is poised to slash the feed-in tariffs for electricity produced from renewable energy sources, making solar parks with installed capacity exceeding 1.0 MW – best suited for the use of thin-film modules, less attractive for investors.
The factory in Silistra will now focus on the testing and quality control of monocrystalline and polycrystalline modules and the final assembly of PV installations. The Bulgarian company also has a co-licensing agreement with China’s BYD, allowing it to market monocrystalline and polycrystalline modules manufactured in China under the Solarpro brand.
The company is also eyeing a significant share of the local market for building integrated PV systems whose overall size is seen at over 20 MW per year. “Solarpro has the expertise to guide our clients along the entire project development process from the installation design and the permitting procedures through to the financing options,” Mitev said.
In the process of building up a project portfolio, the management of the company discovered that a critical issue for the long-term operation of a solar park – regardless of whether it is company-owned or not, is the availability of comprehensive management and maintenance services.
That is why the holding company recently founded Solarpro OM, a unit that will provide operation and maintenance services at solar parks that have been brought on stream. The new unit plans to have 55-60 MW under management by the end of 2012.