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How Does Yingli Solar Make Money?

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Jul. 12 2016, Updated 4:50 p.m. ET

Yingli Solar’s revenue segments

Yingli Solar (YGE) currently derives revenue from the following five sources:

  • sales of PV (or photovoltaic) modules
  • sales of PV cells, wafers, and raw materials
  • PV cells and PV modules processing fees
  • sales of PV systems
  • other revenues

These five segments combined span the complete value chain of the vertically integrated solar (TAN) power solutions business model.

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Sales of PV modules

Currently, Yingli Solar (YGE) derives the majority of its revenue from global sales of PV modules. The revenue from this segment is primarily driven by market demand as well as the company’s manufacturing capacity.

Sales of PV cells, wafers, and raw materials

According to company filings, sales of PV cells, wafers, and raw materials include the sale of low-efficiency PV cells, wafers, and raw materials. Revenue from this segment is the second major contributor to the company’s overall revenue.

PV cells and PV module processing fees

Unlike its peers Canadian Solar (CSIQ), First Solar (FSLR), SunPower (SPWR), and SunEdison (SUNEQ), Yingli Solar derives a minor portion of its consolidated revenue by providing PV cells and PV module processing services to third parties.

In contrast, revenue from the sale of PV systems consists of sales of PV systems and related installation services. According to company filings, for the year ended December 31, 2015, Yingli Solar classified its net revenue generated from sales of electricity under its other revenues segment.

Next, we’ll examine Yingli Solar’s major revenue-generating geographical regions.

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