Rising costs have not stopped solar entrepreneur from sourcing products in Guangdong
Availability of all components and materials in southern Chinese province makes supply chain, logistics and quality control ‘so much easier’, says Patrick Walsh of Greenlight Planet
Southern Guangdong remains a favoured procurement destination for solar products despite soaring wages, according to the chief executive of one of the largest suppliers of solar lanterns to South Asia and Africa.
Technological progress has increased the energy conversion efficiency of solar panels and reduced the costs of panels and batteries, which more than offset higher labour costs in the manufacturing powerhouse, even as they enable marked improvements in product quality.
“Although Shenzhen and Dongguan’s cost of labour is substantially higher than that in India and Africa, it is the supply chain that keeps us sourcing there,” Patrick Walsh, co-founder and chief executive of Greenlight Planet, told the South China Morning Post in an interview on the sidelines of the Global Off-Grid Solar forum last month.
“We mainly source from South China … [where] we can get all the materials – batteries, LED [light emitting diode] components and solar panels – in one [region],” he said. “That makes the supply chain, logistics and quality control so much easier.”
The minimum wage in Shenzhen last year stood at 2,130 yuan (US$336), a 2.5-fold increase over the 850 yuan a decade ago, or an average annual increase of 9.6 per cent.
Meanwhile, the cost of solar panels has fallen by about 90 per cent during the same period, but that of batteries has “not fallen nearly as quickly”, said Walsh.