KYOCERA Breaks Ground on New Solar Module Plant in China

Kyocera Corporation (NYSE:KYO)(TOKYO:6971) today announced the construction of a new solar module manufacturing plant in Tianjin City, China in order to expand production capacity at KYOCERA (Tianjin) Solar Energy Co., Ltd. (herein Kyocera Tianjin Solar).

Construction of the new plant is timed to align the production capacity of solar modules with the increase in production of solar cells which Kyocera is set to expand to 650MW by March, 2012. Manufacturing modules mainly for the Asian market, the target production capacity of Kyocera Tianjin Solar will be bolstered to the eventual goal of 240MW from 2011, an increase to four times the current capacity of 60MW.

Construction of the new manufacturing plant will begin in April, with completion scheduled for spring of 2010. Upon completion of the new plant, all Kyocera Tianjin Solar manufacturing operations will subsequently be transferred to the new facility.

On February 18, the groundbreaking ceremony for the scheduled construction of the new plant was held on the site adjacent to the current facility.

Presently, the solar energy industry is garnering global attention. In 2003, anticipating future growth in the Asian market starting with China and Japan, Kyocera was the first Japanese company to establish a solar module manufacturing plant in China. With the Kyocera Group operating manufacturing facilities for solar modules in Japan, Mexico, the Czech Republic and the Tianjin facilities in China, Kyocera Tianjin Solar supplies solar modules to the leading Asian markets of Japan, South Korea and China as one of the group’s four global manufacturing centers.

Kyocera will continue to increase production capacity from here on to correspond with market demand, aiming for the further expansion of its solar energy business.

Details of the New KYOCERA (Tianjin) Solar Energy Co., Ltd. Plant

Start of Construction: April 2009 (scheduled)
Completion: Spring 2010 (scheduled)
Start of Operation: Gradual start of operations from spring 2010 (scheduled)
Building Area: 9,600m2
Floor Area: 28,800m2 (3 floors)


About KYOCERA

Kyocera Corporation (NYSE:KYO)(TOKYO:6971) (http://global.kyocera.com/), the parent and global headquarters of the Kyocera Group, was founded in 1959 as a producer of fine ceramics (also known as “advanced ceramics”). By combining these engineered materials with metals and plastics, and integrating them with other technologies, Kyocera has become a leading supplier of solar power generating systems, telecommunications equipment, laser printers, copiers, electronic components, semiconductor packages, cutting tools and industrial ceramics. During the year ended March 31, 2008, the company’s net sales totaled 1.29 trillion yen (approximately US$12.9 billion).

inese Academy of Sciences launches Action Plan for Solar Energy

January 14, 2009

The Chinese Academy of Sciences (CAS) announced the official launching of the Action Plan for Solar Energy on January 12.

The plan is divided into three phases: distributed utilization of solar energy by 2015, substitution utilization by 2025 and extensive utilization by 2035, aiming to make solar energy one of China's important energy sources around 2050.

Reporters learned that CAS will devote all its efforts and collaborate with China's relevant scientific and technological resources to establish a number of public platforms for solar energy technologies as well as research centers.

The focus will be on the key scientific issues concerning the transformation and utilization of solar energy such as photovoltaic, photothermal, photochemical and photobiological techniques.

CAS will strive to make breakthroughs in the areas of theory, methodology, materials and techniques. At the same time, through the integration of production, study and research, the plan will promote the research and development of core techniques, application models and transfer transformations, and eventually the formation of a scientific and innovative value chain for the utilization of solar energy from basic research and application to marketing.

All these will be done in an effort to turn solar energy into a new source of energy that can soon be utilized on a large scale.

By People's Daily Online

Shanghai Electric sells stake in Topsolar for RMB 138.6 mln

Jan. 4, 2009 (China Knowledge) - Shanghai Electric Group Co Ltd (SEG), China's largest producer of power equipments, has sold the 36% stake it holds in Shanghai Topsolar Green Energy Co to Yancheng Dongtou New Energy Equipment Co for RMB 138.6 million, according to a SEG's statement filed with the Shanghai Stock Exchange.

The transaction is estimated to bring SEG a net gain of RMB 3.38 million.

The Shanghai-based company will sell the remaining 25.35% in Topsolar soon and expected to gradually exit the field of solar energy business and focus on its core business such as wind power.

SEG's gross profit rate of electrical equipments in the first half of last year rose to 19.5%, while that of its solar energy-related business stood at 7.1%, according to a company source.

Suntech Opens Sales and Customer Service Office in Italy

SAN FRANCISCO and WUXI, China, Dec. 16 /PRNewswire-Asia/ -- Suntech Power Holdings Co., Ltd. (NYSE: STP), the world's largest photovoltaic (PV) module manufacturer, today announced the opening of a sales office in Milan, Italy to provide enhanced sales and service support to Suntech's Italian customer base.

Jerry Stokes, Suntech's President of Europe, said, "Our new office in Milan is another step towards the increasing globalization of Suntech's sales and service capabilities. To complement our core sales competency, we are building a multi-faceted team across Europe that is in tune with local market conditions and can respond to customer needs promptly. We believe our customers appreciate this commitment and see Suntech as a reliable, long term solar partner."

Mauro Sgherri, Suntech's Director of Sales, Italy, said, "Suntech's involvement in many of the highest profile solar projects in Europe combined with a deep dedication to quality and continuous technology improvement distinguishes Suntech's solar offering in the Italian market. Moreover, Suntech's industry leading scale, broad product portfolio and timely product delivery highlight our market leadership. We have established a top tier customer base of companies that have long term solar plans and have already built an order book in Italy of over 130 megawatts for 2009. We look forward to supporting the growth plans of our Italian customers through the stablesupply of high quality solar modules and responsive customer service."

The Italian market is set to grow rapidly in 2009 due to strong support from the Italian government in the form of solar subsidies that range from EUR0.36/kWh for large ground-mounted PV systems and up to EUR0.49/kWh for building integrated PV systems. The high solar irradiation provides excellent conditions for generating solar energy.

About Suntech

Suntech Power Holdings Co., Ltd. (NYSE: STP) is a world-leading solar energy company as measured by both production output and capacity of solar cells and modules. Suntech is passionate about improving the environment we live in and dedicated to developing advanced solar solutions that enable sustainable development. Suntech designs, develops, manufactures, and markets a variety of high-quality, cost-effective and environmentally friendly solar products for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech offers one of the broadest ranges of BIPV products under the MSK Solar Design Line(TM). Suntech hassales offices worldwide and is a market share leader in key global solar markets. For more information, please visit http://www.suntech-power.com .

Suntech Power and Open Energy Sign Solar Roof Tile Licensing Deal

License Agreement Combines Open Energy's Award-Winning Design and Innovation with Suntech's Manufacturing and Marketing Expertise

[09-December-2008]

SAN DIEGO and SAN FRANCISCO, Dec. 9 /PRNewswire-Asia/ -- Suntech Power Holdings Co., Ltd. (NYSE: STP), a leading manufacturer of photovoltaic (PV) modules, and Open Energy Corporation (OTC Bulletin Board: OEGY), a developer of innovative and elegant BIPV products, energy management applications and solar energy solutions announced that they have entered into an exclusive agreement licensing the worldwide manufacture, distribution and marketing of Open Energy's building integrated solar roof tile product to Suntech. Open Energy granted Suntech an exclusive license of the intellectual property incorporated into its solar roof tile product and any similar or new generation tile roof products. The solar roof tiles are 50 watt four foot BIPV tiles and are available in different color panels.

"The relationship with Suntech gives Open Energy access to unmatched manufacturing capabilities and a worldwide distribution network, with particular strength in Europe and Asia," said David Field, president & chief executive officer of Open Energy. "This allows us to reach even more international customers and gives us the opportunity to concentrate on our award-winning and innovative product design for next generation products. As the solar industry continues to grow in 2009 particularly in Europe, where BIPV solar systems enjoy substantial market premiums, it will be critical to have the reach and scale that the relationship with Suntech brings to our company. We chose to work with Suntech because they have world class manufacturing, an incredible sales force and a solid foundation of resources and customers."

"Open Energy is widely recognized for designing innovative, award-winning solar solutions, while Suntech is a world leader in manufacturing, marketing and sales of solar products," said Leonard May, Suntech Managing Director of BIPV Products. "By combining these core strengths, we are confident that we will consistently deliver innovative products, the highest quality and outstanding value to our customers capitalizing on the strengths of both companies."
Eagle Roofing Products is expected to continue as master distributor of the tile product in the U.S.

About Open Energy

Open Energy Corporation is a next-generation solar energy company that develops clean energy solutions, innovative solar products and energy management applications. Open Energy's award-winning products include proprietary, cost-competitive and attractive BIPV solar tiles, membranes and asphalt/composition products. In addition, the EcoTouch Energy Management System gives consumers control over their energy usage while saving money. Open Energy's portfolio of products and services are coupled with innovative financing to enable green Solar Communities to provide low-cost power with little to no upfront cost to the consumer. Open Energy is headquartered in Solana Beach, California. For more information, visit http://www.openenergycorp.com .

About Suntech

Suntech Power Holdings Co., Ltd. is a world leading solar energy company as measured by both production output and capacity of solar cells and modules. Suntech is passionate about improving the environment we live in and dedicated to developing advanced solar solutions that enable sustainable development. Suntech designs, develops, manufactures, and markets a variety of high quality, cost effective and environmentally friendly solar products for electric power applications in the residential, commercial, industrial, and public utility sectors. Suntech offers one of the broadest ranges of building integrated photovoltaic (BIPV) products under the MSK brand. Suntech has sales offices worldwide and is a market share leader in key global solar markets. For more information, please visit http://www.suntech-power.com .

Chinese PV pioneer helps build Israel's biggest solar power station

www.chinaview.cn 2008-12-09 06:27:49

KATSRIN, Israel, Dec. 8 (Xinhua) -- Israel's biggest solar power station was inaugurated on Monday in this Israeli northern town, setting up a landmark in the Chinese-Israeli cooperation in the field of clean energy.

The 50 KW rooftop project, estimated to generate 85,000 KWH a year, was co-built by China's Suntech Power Holdings Co., Ltd., a world-leading solar energy company, mainly specialized in photovoltaic (PV) power generation technologies, and Solarit Doral, a major local player in Israel's renewable energy market.

Dubbed the biggest and most efficient of its kind so far in Israel, the solar power station is integrated into Israel's national grid, as the Jewish state has been carrying out incentive measures to prod the development of alternative energy, including purchasing cleanly generated electricity at a relatively higher price.

Highlighting the urgent need to find alternative resources to power the world and protect the environment, Zhao Jun, Chinese ambassador to Israel, said at the ceremony that China has been investing heavily in alternative energy, and shares great cooperation potentials with Israel in relevant respects.

"It is very appropriate and natural for Chinese and Israeli companies to work together on this," he told Israeli National Infrastructures Minister Binyamin Ben-Eliezer and local officials.

Ben-Eliezer, whose ministry has unveiled an ambitious plan to produce 20 percent of its electricity through renewable resources by 2020, stressed that Israeli government pays high attention to the development of clean energy, and noted that Israel and China should deepen cooperation in commonly-interested fields, particularly water resources and renewable energy.

Meanwhile, representatives from Suntech, a listed company in New York Stock Exchange, said that the company is planning with its Israeli counterpart to construct a larger solar power plant in southern Israel.

Editor: Sun

China's solar PV sector faces uncertainty

BEIJING, Dec 08, 2008 (Xinhua via COMTEX) -- The growth pace of China's new energy industry is seriously dented by oil price slump and demand shrinkage due to the global financial crisis, according to analysts.

Zhou Tao, analyst with Greatwall Securities, said that solar photovoltaic industry suffers adverse impact on demand shrinkage of solar cells from Western countries and losses from Euro depreciation.

Xiong Lin, analyst with China Jianyin Investment Securities, said that a number of small-sized module producers have gone bankruptcy in East China's Jiangsu Province as a result of lacking capital and order cut.

Xiong said that solar energy industry would demonstrate an obvious trend of integration and increased market concentration in addition to uncertain market situation and order amount in 2009 for SunTech Power Holdings Limited (STP.NYSE).

Xiong predicted that China's solar cell module producers would see a five-percent drop of gross profit margin, taking in consideration of order, exchange rate and other factors.

It's widely accepted that investment in new energy sector will get restrained due to oil price drop, and substitution value of new energy will get slashed resulting from coal price slides.

In the long run, new energy will continue to have bright prospectus in term of its value in environmental protection, according to Xiong.

The power generating cost of solar photovoltaic electricity will be in line with the power generating cost of traditional energy in 2030, according to a report in early 2008 by China Jianyin Investment Securities.

Xiong said that it's hard to judge when solar electricity power cost comes in line with the cost of traditional power generation in the near term, with expectation-beating technological improvement in polycrystalline silicon as well as oil price tumble.

Earlier, Chang Xiaofeng, chairman and CEO of LDK Solar Co., Ltd. (LDK.NYSE), predicted that solar power cost probably would drop to one yuan per kilowatt within two to three year thanks to raw material price decreases.

Yu Yingyi, analyst with Pacific Securities, said that governments at various levels would support the development of solar PV industry in the long term in consideration of energy security and environmental protection.

Yu is optimistic about the long-term demand of solar energy products.

Suntech's Seven Employee Injured in Production Facilities Accident

On November 28, 2008, seven Suntech employees were injured as a result of an accident that occurred due to the malfunction of a piece of module lamination equipment at Suntech Power's PV module facilities in Wuxi, China. The seven injured employees are receiving further medical treatment and are recovering in hospital.

China's solar energy industry was suffering the cold winter, and this further lowered the temperature.

To be frank, the working condition at many Chinese PV manufacturers are not good at all, and the employees working at the production lines are poorly paid.

CTDC, CMZD and TSG Sign Agreement to Co-develop the Xiamen Bay Solar City

HONG KONG, Dec 2, 2008 (GlobeNewswire via COMTEX) -- China Technology Development Group Corporation ("CTDC" or "the Company"), a provider of solar energy products and solutions in China focusing on a-Si thin film technology, today announced that the Company signed the Framework Agreement on Co-operation with China Merchants Zhangzhou Development Zone ("CMZD") and Terra Solar Global Inc. ("TSG"), to co-develop the Xiamen Bay Solar City ("the Solar City), about 115 acres located in CMZD, on November 21, 2008. It is aimed at jump starting the green economy in CMZD.

The Agreement was signed by Mr. Li Alan, Chairman and CEO of CTDC, Mr. Wu Bin, Executive Vice Chairman of management council of CMZD and Mr. Jack C. Chu, CEO of TSG. The Agreement clearly states the strategic targets, cooperative ways, duties and coordination mechanism of the three parties. The three parties will work closely to make the Solar City a leading thin film PV industrial park with the SnO2 TCO base plate as the pioneering sector, which is to encompass the thin film technology R&D center, thin film modules or other PV products manufacturing plants, PV applications deployed buildings as well as PV products logistics center. The Solar City will absolutely help diminish CMZD's carbon emissions and enable the Xiamen Bay to be green. Meanwhile, the leading clean and renewable energy technology is another engine to fuel its future growth and development.

Under the terms of the Agreement, the management council of CMZD will sort out the location of the Solar City and offer very favorable government policies and supporting facilities to CTDC, including land, tax, factory building, logistic service and R&D cooperation, etc. CTDC is committed to positively expanding the production capacity by adding minimum six SnO2 TCO production lines by the end of 2009. TSG also committed that they would provide cutting-edge thin film technologies and equipments to help CTDC optimize the SnO2 technology and explore more overseas market opportunities. In order to enhance the efficiency, the three parties will establish a working group to oversee and manage all day-to-day operations as to the Solar City project from signing, construction, operation to full production.

Commenting the cooperation, Li Alan, CEO of the Company, said: "We signed a MOU with TSG in October 2007 as well as a Letter of Intent with CMZD in June 2008. The signing of the Agreement marks our cooperation has entered into a new stage. We believe the strategic partnership will enable us to provide low-cost thin film PV products to the market and facilitate the widespread application of solar based technology in CMZD."

"Going solar will not only help clean up our environment, it will create job opportunities and help grow this sector of our local economy," commented by Mr. Wu Bin, Executive Vice Chairman of CMZD, "We think the Solar City project is of great importance to the development of CMZD. We will try our best to provide at large the necessary support to the project as well as help us become a national high-tech industrial park."

"We are honored to co-develop the Solar City with CTDC and CMZD," added Jack C. Chu, CEO of TSG. "With the extensive BIPV system delivery experience coupled with advanced thin-film technology over the last three decades, we are confident that our expertise will enable our strategic partners to grow in PV industry. With CTDC's extensive operation experience and NASDAQ capital platform and CMZD's strong local government support, we are all very well placed to be right partners to each other to co-develop the Solar City, which will ultimately benefit the Chinese people and Chinese economy."

About CTDC:

CTDC is a provider of solar energy products and solutions in China focusing on a-Si thin-film technology. CTDC's ultimate principal shareholder is China Merchants Group ( http://www.cmhk.com), one of the biggest state-owned conglomerates in China.
For more information, please visit our website at http://www.chinactdc.com.

Many China firms gearing up for poly-Si production, but few will enter into volume production 2009, say Taiwan makers

Staff reporter, Taipei; Adam Hwang, DIGITIMES [Tuesday 2 December 2008]

Due to fast growing demand for solar cells, there have been many newly established producers of polycrystalline silicon material (poly-Si) in China and the total number has reached about 50 currently, but no more than five of them will be capable of undertaking volume production in 2009, according to industry sources in Taiwan.

This is because poly-Si makers in China have been faced with a challenging situation, the sources indicated. It is increasingly difficult for them to raise funds for capacity expansion due to the global financial crisis, the sources pointed out. In addition, fast decreasing global demand for solar cells has caused continued drops in spot market pricing of poly-Si, which has led to high inventory levels, the sources noted.

China's solar energy industry has downwardly adjusted China's 2008 target output of poly-Si from 11,000 tons originally to 3,000 tons, the sources indicated.

China Sunergy Announces Financial Results for the Third Quarter 2008

Reports Third Quarter Revenues of US$119.0 million, an Increase of 142.9% Year-Over-Year; Solar Cell Production and Gross Margin are both within Guidance at 35.7.MW and 9.3% respectively

NANJING, China, Nov 25, 2008 /PRNewswire-Asia via COMTEX/ -- China Sunergy Co., Ltd. , ("China Sunergy" or the "Company") a specialized solar cell manufacturer based in Nanjing, China, announced today its financial results for the third quarter of 2008.

Third Quarter Financial Results
-- Revenues were US$119.0 million, representing a 142.9% and 6.6% increase compared to the third quarter of 2007 and the second quarter of 2008, respectively; revenues generated from solar cell sales were US$113.4 million, representing a 144.9% and 8.6% increase compared to the third quarter of 2007 and the second quarter of 2008, respectively.
-- Gross profit was US$11.1 million compared to US$1.0 million and US$11.6 million during the third quarter of 2007 and the second quarter of 2008, respectively. Gross margin was 9.3%, which was within the Company's guidance range, compared to 2.1% and 10.4% during the third quarter of 2007 and the second quarter of 2008, respectively. Blended gross margin was impacted mainly by the reduced OEM volume, compared to previous quarter.
-- GAAP net income was US$0.2 million, compared to net loss of US$4.4 million and net income of US$3.1 million in the third quarter of 2007 and the second quarter of 2008, respectively. Lower GAAP net income was largely due to non-operational accounting measures.
-- Non-GAAP net income, which excludes share-based compensation and change in fair value of non-cash derivative loss, was US$2.0 million, compared to non-GAAP net loss of US$4.3 million and non-GAAP net income of US$4.0 million in the third quarter of 2007 and the second quarter of 2008, respectively. The non-GAAP measures are described below and reconciled to the corresponding GAAP measure in the section below titled "Use of Non-GAAP Financial Measures."
-- GAAP net income per ADS was US$0.01 both on basic and diluted basis, compared to a net loss of US$0.11 and a net income of US$0.08 per ADS in the third quarter of 2007 and the second quarter of 2008, respectively.
-- Non-GAAP net income per ADS, which excludes share-based compensation and change in fair value of non-cash derivative loss, was US$0.05 both on basic and diluted basis, compared to a non-GAAP net loss of US$0.10 and a non-GAAP net income of US$0.10 per ADS in the third quarter of 2007 and the second quarter of 2008, respectively.
-- Operating cash flow in this quarter was positive US$1.8 million.

Commenting on the financial results, Dr. Allen Wang, CEO of China Sunergy, said: "Despite experiencing a deteriorating market environment towards the end of the quarter, which resulted in some canceled orders, I am pleased that we were able to achieve our guidance for the quarter regarding margins and production volume. We have maintained our focus on execution through the signing of an important sales agreement and procuring high-quality silicon supplies at flexible and favorable prices, which will benefit the long term health of our Company despite the short-term impact of operating within an extremely challenging and uncertain solar sector."

Third Quarter and Recent Operational Highlights
-- Quarterly production of 35.7 megawatts ("MW") of solar cells represented a 100.6% increase on a year-over-year basis and an 8.8% increase sequentially.
-- Shipments of solar power products amounted to approximately 34.1 MW, representing a 105.4% increase on a year-over-year basis and a 2.6% decrease sequentially. Shipments were impacted by several orders which were canceled in late September due to market conditions, which would have amounted to 4.3 MW.
-- Shipments of high efficiency cells (defined as any cells with a conversion efficiency rate of over 17%) during the third quarter of 2008 amounted to 11.1MW, or 34.0% of total solar cell shipments, slightly less than the 11.4 MW, or 36.8% of total solar cell shipments, during the second quarter of 2008.
-- Average selective emitter (SE) cell conversion efficiency was 17.2% in the third quarter of 2008. Cells produced on the HP lines achieved an average conversion efficiency rate of approximately 16.7%.
-- The Company entered into a seven year sales agreement with Wuxi Guofei Green Energy Source Co., Ltd. ("Wuxi Guofei"), a leading Chinese solar energy company. Under the greement, China Sunergy will supply Wuxi Guofei with 10 MW of monocrystalline cells each year, beginning in 2009 and concluding in 2015.

"Although we were only moderately affected by the market situation towards the end of the third quarter, we have experienced much more severe pressure on our operations in recent months particularly in October as ASP erosion has been rapid," continued Dr. Wang. "While this will significantly impact our results in the coming quarter and hence the full year, we have already implemented critical adjustments to minimize the long-term effect of the current environment and ensure that as the solar sector regains equilibrium we will be poised to regain the momentum that we demonstrated over the past quarters."

Technological Developments

During the quarter China Sunergy continued to make progress with the production and development of its high-efficiency cells. China Sunergy currently has one SE line and four HP lines available for operation, and has maintained one multi-crystalline P type line to cater to current client requirements.

The installation of the four new selective emitter ("SE") cell production lines is scheduled to be completed by the end of November, which will bring the total number of SE lines in production to five from the beginning of 2009. It should be noted that given any specific quality of wafer the SE cells not only generally achieve higher conversion efficiencies than our P and HP-type cells, but they also display greater wafer quality tolerance and are therefore able to achieve this even when poorer quality wafers are used during production.

China Sunergy's investment in more advanced cells has again resulted in impressive returns with regards to the development of new forms of high efficiency cells. In particular, significant breakthrough has been achieved in the advancement of the N-type cells. At the laboratory level, an average efficiency of over 19% was consistently achieved, and the Company has put up a plan to start commercial shipments late in the fourth quarter of 2009. Additionally, the planned R&D center in Shanghai remains scheduled to be completed during the first half of 2009.

Third Quarter 2008 Financial and Business Review

Revenues, Shipment and Production

During the third quarter of 2008, revenues increased 142.9% on a year- over-year basis, and 6.6% sequentially to US$119.0 million.

Sales from solar cells, modules and processed cells under OEM arrangements and other sales accounted for 95.3%, 4.2%, 0.2% and 0.3% of total revenues, respectively. Shipments, including 1.2MW for module sales and 0.3MW of solar cells processed under OEM arrangements, amounted to approximately 34.1 MW, compared to 16.6 MW during the third quarter of 2007 and 35.0 MW during the second quarter of 2008.

Revenues and Shipment Comparison between Q3 2008 and Q2 2008
Q3 2008 Q2 2008
Volume* Value (US$mm) Volume* Value (US$mm)
Solar cell sales 32.6 113.4 31.0 104.4
Module sales 1.2 5.0 1.0 4.2
OEM 0.3 0.2 3.0 2.2
Other sales 0.4 0.8
* All volumes are expressed in MW.

During the third quarter of 2008, the Company increased its quarter-on- quarter sales of solar cell products by 8.6% as compared to the previous quarter. The percentage of solar cell sales in overseas markets of total solar cell sales was 45.1% in the third quarter of 2008 compared to 48.3% and 39.5% in the third quarter of 2007 and the second quarter of 2008, respectively.

Of the 32.6 MW of solar cells shipped during the third quarter, 11.1 MW were in the form of high efficiency cells (defined as any cells with a conversion efficiency rate of 17% and above.)

Gross Profit, Gross Margins and Average Selling Price ("ASP")

Gross profit for the quarter was US$11.1 million, which led to a blended gross margin of 9.3%, down from 10.4% in the previous quarter, mainly as a result of less OEM volume. The gross margin of solar cells was largely the same as the previous quarter.

Margin Breakdown
Gross margin
Q3 2008 Q2 2008
Solar cell sales 9.1% 9.2%
Module sales 6.8% 12.4%
OEM 68.8% 63.2%
Other sales 68.1% 19.9%
Blended 9.3% 10.4%

Blended ASP for the third quarter of 2008 rose from US$3.37 per watt in the previous quarter to US$3.48 per watt due in part to the strengthening of the Renminbi against U.S. dollar. The blended ASP for the third quarter of 2007 was US$2.85.

Wafer Costs

Wafer costs continued to account for a large proportion of overall manufacturing costs. In the third quarter of 2008, wafer costs rose to US$2.87 per watt compared to US$2.45 and US$2.79 per watt in the third quarter of 2007 and the second quarter of 2008, mainly due to the strengthening of the Renminbi against U.S. dollar and the price increase of wafer.

Wafer costs per watt as a percentage of total production costs per watt declined slightly from 91.2% in the second quarter of 2008 to 91.1% in the third quarter of 2008, mainly due to the increased production volume. Other production costs, which mainly consisted of other raw materials, labor, depreciation and utilities, were US$0.28 per watt compared to US$0.27 in the second quarter of 2008.

SG&A, Operating Profit and Net Income

Our SG&A expenses in the third quarter of 2008 were US$4.9 million, compared to US$4.2 million in the third quarter of 2007 and US$5.1 million sequentially, which included share based compensation charge US$0.9 million, US$0.1 million, and US$0.9 million, respectively.

Profit from operations was US$5.7 million, compared to an operating loss of US$3.6 million and an operating profit of US$6.0 million for the third quarter of 2007 and the second quarter of 2008, respectively.

Interest expense for the third quarter 2008 was US$2.1 million, compared to US$2.0 million for the third quarter of 2007 and US$1.7 million for the second quarter of 2008, respectively. The increase was attributable to amortization of expenses and interest charges related to the senior convertible bonds closed on July 1, 2008.

In the third quarter we had other expenses amounting to US$3.7 million, mainly from unrealized foreign currency exchange loss due to devaluation of the Euro against Renminbi.

The Company reported a decline in net income to US$0.2 million this quarter, largely due to exchange and foreign currency derivative loss. This compares to a net income of US$3.1 million in the previous quarter and a net loss of US$4.4 million in the third quarter of 2007.

Non-GAAP net income, which excludes share-based compensation and change in fair value of non-cash derivative loss, was US$2.0 million in the third quarter of 2008, compared to net loss of US$4.3 million and net income of US$4.0 million in the third quarter of 2007 and the second quarter of 2008, respectively (please refer to note 1 of reconciliation).

The non-GAAP measures are described below and reconciled to the corresponding GAAP measures in the section below titled "Use of Non-GAAP Financial Measures."

Balance Sheet and Cash Flow

As of September 30, 2008, the Company had cash and cash equivalents of US$122.1 million. Net operating cash inflow for the third quarter was US$1.8 million. The Company also has access to an untapped bank credit facility of US$70M as at the end of September, and at this point sees no issues in its ability to renew existing bank loans or to obtain new lines of credit, should they be necessary.

Inventory was at a similar level compared to the second quarter, and the Company's working capital ratio improved from 178% in the second quarter to 212% in the third quarter. Depreciation and amortization were US$1.4 million and capital expenditures were US$8.7 million.

Capital expenditures in Q3 were payments made for equipment relating to the expansion of the Company's selective emitter cell lines. The outstanding payment for the 4 SE lines is US$12M and the budget for the R&D Center in Shanghai is US$8M. These two items have been accounted for. The only new capex requirement is approximately US$8M for the conversion of one SE line to N-type. The Company sees no issues in generating this funding internally out of its 2009 profits.

On July 1, 2008, the Company issued US$54.5 million 4.75% senior convertible notes (including US$4,500,000 pursuant to the exercise of the over-allotment option in full) due June 15, 2013 ("the Notes"). The terms of the Notes include certain conversion, repurchase and conversion rate adjustment features. The Notes are convertible into shares of the Company's stock. Total issuance costs of the senior convertible notes were approximately US$3.9 million.

Concurrent with this offering, 4,431,000 ADSs were borrowed by an affiliate of the initial purchaser of the notes pursuant to an ADS lending agreement, and offered in a transaction registered under the Securities Act. A nominal lending fee of US$0.0006 per ADS was received from the ADS borrower for the use of the borrowed ADSs.

Commenting on the financial results, Kenneth Luk, CFO of China Sunergy, said: "Despite the financial pressure caused by the depreciation of the Euro, we achieved the lower end of our margin guidance and generated cash during the third quarter. We have sufficient capital to fund our operations during this uncertain time and throughout 2009. While the outlook for the fourth quarter is certainly not ideal and we will face challenging results, China Sunergy will take the necessary steps to limit the financial impact and ensure we have the resources necessary to benefit from the anticipated long-term demand for our advanced solar products."

Outlook

The recent global economic environment will have a much more significant impact on the Company's fourth quarter and full year results than was experienced during the third quarter. The rapid decline in the ASP for solar cells during October was not immediately matched with a reduction in the upstream costs, largely polysilicon, resulting in negative gross margins and a conscious reduction in production of solar cells. Despite the recent cost corrections, the short term lack of demand for solar products has led to reduced shipments and revenues and therefore a reduced opportunity to compensate for the weak beginning to the quarter.

Taking into account the reduced ASP and relatively higher cost of polysilicon, the Company believes it will report a negative gross margin for the fourth quarter. The Company actively reduced production during the beginning of the quarter, leading to production volume in the range of 15-20MW. This results in the Company reducing its full year 2008 production target to 107-112MW, out of which around 44MW are expected to be high efficiency products.

China Sunergy observed that starting in early November the price of polysilicon began to erode, and at this time has now fallen by an even greater extent than the recent ASP decline. Given the current opportunity for flexible procurement of polysilicon and recently observed pricing trends, the Company has seen gross margins return to a level similar to the second quarter of 2008. In addition, going forward there will be incidental margin improvement due to a more favorable production mix and higher wafer quality from overseas suppliers.

By the first quarter of 2009, all 4 new selective emitter production lines will be operating, bringing the total number of selective emitter lines to 5. While production may not run at the full capacity in Q1, the Company will focus production on those lines until their production capacity is fulfilled, thus targeting to generate a higher average gross margin.

For 2009, the Company, although prudently optimistic, would like to be conservative at this point of time and revise down the production target to 180-210MW including 20% from OEM business. It is important to note that this target is based on the Company's existing commitments and ongoing negotiations with customers while the market is more volatile than usual. Our gross margin should be positively, instead of negatively, impacted based on the recent trend of declining ASP and wafer costs. Taking into consideration the effect of a better production mix of 50% SE cells as well as better wafer quality, China Sunergy expects a gross margin of 15-19% for 2009.

Additional Company Updates

During the annual general meeting of shareholders held in Nanjing on August 15, 2008, the Company adopted several shareholder resolutions, including the re-elections of Mr. Tingxiu Lu, Mr. Ruennsheng Allen Wang and Ms. Jian Li as directors of the Company, the ratification of the appointment of the Independent Auditor Deloitte Touche Tohmatsu for the fiscal year 2007 and appointment of the Independent Auditor Deloitte Touche Tohmatsu for the fiscal year 2008.

China subsidizes renewable energy power generation

Xinhua Economic News (2008/11/24)

BEIJING, Nov 24, 2008 (Xinhua via COMTEX) -- China will provide 2.023 billion yuan of subsidies to 148 renewable energy power generation projects from October 2007 to June 2008, according to a notice issued by the National Development and Reform Commission and the State Electricity Regulatory Commission.

Included are 102 wind power programs, 43 biomass power programs, three solar energy power projects with overall installed capacity and on-grid electricity of 5.6972 million kilowatt and 7.721 billion kilowatt hours.

The subsidy policy is designed to compensate the partial on-grid renewable energy electricity price, operating and maintenance fees of independent public renewable energy power system, power grid connection fee as well as losses of straw-fired power generating programs.

In addition, 12 provincial power grid enterprises are allowed to introduce the additional electricity fee from other their counterparts of other provinces through quota trading to make up their fund shortage. The transaction volume will amount to 873 million yuan.

Electricity grid enterprises are required to honor the subsidies and quota transactions within ten working days.

China has subsidized 38 renewable energy power generation projects with total installed capacity of 1.414 million kilowatt hours in 2006 with 260 million yuan.

China introduced Renewable Energy Law starting from January 1, 2006 and issued pricing mechanism and amortization measures on renewable energy power generation later to prompt the development of renewable energy sector.

Chinese producer expects solar energy market to rebound in early 2009

BEIJING, Nov 21, 2008 (Xinhua via COMTEX) -- Solar energy industry will receive moderate and no long-lasting impacts from global financial market, said Wang Runsheng, chief executive officer of China's major solar cell producer China Sunergy Co., Ltd. (CSUN.Nasdaq).

As the main driving force of solar photovoltaic (PV) industry, governmental subsidy policies haven't been removed or delayed due to the financial turmoil, said Wang, citing recent solar-favoring legislative adjustment in France.

Wang forecast that solar PV market would witness up-turn in the first or second quarter of 2009 since many solar module developers holds on to money anticipating price declines in year end 2008.

Plus, the price drop of solar module and systems will trigger additional demands because solar PV products carry high price elasticity.

The industry chain of solar PV business is capable to bear and absorb price decreases in downstream solar system products.

In 2008, the sales price of polycrystalline silicon reached as high as 450-500 U.S. dollars per kg with production cost ranging from 20-30 U.S. dollars.

Chinese first desert solar power station to be in place

BEIJING, Nov 20, 2008 (Xinhua via COMTEX) -- China's first desert solar power generation station will come into operation and get connected to grid in this December at Tengger Desert of Northwest China's Gansu Province, said Li Shimin, vice president of Gansu Natural Energy Research Institute.

This solar power generation program covers more than 20,000 square meters with an annual capacity of 0.5 MW.

Gansu has rich solar energy resources with annual solar radiation of 4,800-6,400 MJ/m2 and 1,700-3,300 of sunshine hours each year.

In addition, Gansu will invite biding for the construction of a 10-MW solar photovoltaic program in the desert area of Dunhuang.

China, U.S. to collaborate on solar energy technology

www.chinaview.cn 2008-11-17

BEIJING, Nov. 17 (Xinhua) -- China and the United States have agreed to work together on research into advanced solar energy technologies.

The Institute of Electrical Engineering (IEE) under the Chinese Academy of Sciences (CAS) and the U.S. National Renewable Energy Laboratory (NREL), which is affiliated with the Department of Energy, signed a memorandum of understanding over the weekend.

Under the pact, they'll share research on photovoltaic (PV) power generation technologies.

One facet of collaboration, IEE director Xiao Liye said, will be a sophisticated PV cell and module test center, probably in Beijing. The program also includes research data sharing, personnel exchanges and battery-related efforts, Xiao said.

Dan Arvizu, head of the NREL, said he hoped to extend cooperation in line with the common interests of both countries.

IEE is a national facility that carries out high-technology research and development.

NREL focuses on solar, wind, biomass, geothermal, hydrogen energy and fuel cell research.

Editor: Sally Zhang

Dunhuang 10MW solar power project starts bidding

2008-11-9

Dunhuang 10MW solar power on-grid project bidding issue was launched recently, and this project will be one of the biggest solar power on-grid projects in the world.

Gansu is rich in solar energy, over 60 solar power stations have been installed in Gansu by the end of 2007, and the total installed capacity is over 1,000 KW.

Dunhuang 10MW solar power on-grid demonstration project will be one Franchise project, and the Franchise period is 25 years. The bid will be open in March 2009, and the bidder with the lowest on-grid price will win the bid. And the bidding price should be not greater than 4 RMB per KWH and over 80% of the adopted equipments for the solar power station in value should be made in China.

Advance In Flexible Thin Plastic Solar Cells

Swiss and Chinese researchers lifted the conversion efficiency of a bendable and thin type of solar cell.

Researchers in China and Switzerland are reporting the highest efficiency ever for a promising new genre of solar cells, which many scientists think offer the best hope for making the sun a mainstay source of energy in the future. The photovoltaic cells, called dye-sensitized solar cells or Grätzel cells, could expand the use of solar energy for homes, businesses, and other practical applications, the scientists say. Their study is scheduled for the November 13 issue of ACS' The Journal of Physical Chemistry C, a weekly publication.

The research, conducted by Peng Wang and colleagues - who include Michael Grätzel, inventor of the first dye-sensitized solar cell - involves photovoltaic cells composed of titanium dioxide and powerful light-harvesting dyes. Grätzel cells are less expensive than standard silicon-based solar cells and can be made into flexible sheets or coatings. Although promising, Grätzel cells until now have had serious drawbacks. They have not been efficient enough at converting light into electricity. And their performance dropped after relatively short exposures to sunlight.
In the new study, researchers describe lab tests of solar cells made with a new type of ruthenium-based dye that helps boost the light-harvesting ability. The new cells showed efficiencies as high as 10 percent, a record for this type of solar cell. The new cells also showed greater stability at high temperatures than previous formulas, retaining more than 90 percent of their initial output after 1,000 hours in full sunlight.

These cells offer two potential advantages: First off, they should be lower cost due to expected ease in manufacturing. Second, both their flexibility and their light weight will allow installation in places which otherwise would not support the presence of solar cells. For example, cars could have them on their roofs without a big weight penalty. Also, side walls and other vertical surfaces could be covered with lightweight solar cells whereas much heavier weight silicon photovoltaics would weigh too much for easy installation. Skyscrapers might some day get covered with Grätzel solar cell sheeting.

While they achieved 10% efficiency they only achieved 9.1% efficiency using materials that can be incorporated into a plastic.

The new dye absorbs light far better than the conventional dye. Because the dye absorbs light so well, it's possible to cut the thickness of the active material in the solar cell in half, which makes it easier for electrons to escape the solar cell and reach an external circuit. That, in turn, increases efficiency, in this case to 9.1 percent.

The researchers also paired the new dye with a nonvolatile solvent-based electrolyte. It's not quite as stable as an ionic liquid, and it can't be used with plastic. But it allowed slightly higher efficiencies--up to 10 percent.

With advances happening that cut costs for such a large variety of solar photovoltaic materials I am optimistic about the future of solar energy. PV electric power will come down in cost so far that it will compete with grid power during the day first in high sunlight areas such as the US southwest and gradually in lower and lower light areas. This will slow and eventually stop and reverse the growth of coal burning for electric power. It will also cut natural gas consumption and save it for more valuable space heating and fertilizer production.

Our biggest future energy problem continues to be for transportation. While the world recession has cut oil demand and oil prices the eventual resumption of economic growth will push oil prices back up again and the peak in world oil production is not many years away. I'm still not clear on whether advances in battery technology will happen soon enough to make the transition away from liquid fuels.By Randall Parker at 2008 November 09

Polysilicon shifting form semiconductor to solar use, say Taiwan makers

Nuying Huang, Taipei; Adam Hwang, DIGITIMES [Tuesday 4 November 2008]

Leading suppliers of polycrystalline silicon material (poly-Si) around the world, viewing that demand from the solar energy industry will keep growing in 2009 while that from semiconductor industry will decrease, may allocate increased portions of their output for solar players in 2009, according to makers of solar-grade polycrystalline silicon wafers in Taiwan.

The global consumption of solar-grade poly-Si amounted to 27,673 metric tons in 2007, surpassing that of 23,570 metric tons of semiconductor-grade poly-Si for the first time, the sources pointed out. Since solar energy production is estimated to grow on year by 50% in 2008 and by 30% in 2009 while semiconductor production may drop by 10% in 2009 from 2008, the gap in global demand for poly-Si between solar grade and semiconductor grade will be widening in 2008 and 2009, the sources indicated.

Despite the projected increase in demand, existing leading suppliers of solar-grade poly-Si based on Siemens manufacturing process will be faced with increasing competition from new fellow makers, of which many are based in China, as well as suppliers adopting upgraded metallurgical grade (UMG) or other processes, the sources pointed out.

Second wave of major new Chinese module manufacturers coming in 2009

Current financial crisis could speed up consolidation in PV industry

By: Edwin Koot (CEO solarplaza)

31 October 2008 - The global solar energy market in 2008 is expected to grow by 50% compared to 2007. The Chinese solar PV industry is growing rapidly and will soon be the biggest producer of solar cells and modules in the world. There are now over 100 Chinese solar module manufacturers, and even more new market players are expected in the short term. The question is: what might the current credit crisis and pessimistic economic forecasts mean for the PV market and industry in 2009? With solar modules becoming a commodity product, China will definitely be playing a key role as a major producer of solar cells and modules. However, if we look at the maturity of the PV industry right now, and what has happened in other industries, an imminent consolidation phase seems likely. That could mean that fewer producers, and only the bigger ones among them, will survive. So which companies are likely to be the winners, and be reliable business partners for the long term?

Global PV market developments
The PV market is likely to grow less rapidly in 2009. First of all, the world's biggest market in 2008 - Spain - has reduced its support for solar energy. Feed-in tariffs will be cut by 30% in 2009 and, even more significantly, only 500 MWp of new installed PV power will be eligible for this feed-in tariff. This could lead to a decrease in volume for the Spanish market of more than 60%. With feed-in tariffs going down by around 10% in the German PV market, which was the world's biggest PV market for many years, it is likely to grow, but at a moderate rate. Growth in other markets is also dependent on government support programs. And although the US government recently agreed on an eight-year extension of the federal tax credit scheme for solar energy, the US market is not likely to grow very rapidly. The current credit crisis, and the economic recession forecasted for 2009, will limit the available finance from banks, and therefore also limit the development of new PV projects.

On the supply side, along with the global PV industry as a whole, supply will grow even faster than market demand in 2009. A conservative forecast by the Prometheus Institute suggests that solar module production volume will grow by a massive 80% in 2009. Most of the investments in new production capacity were planned between late 2007 and 2008, under the highly profitable market conditions.

Consolidation phase
Last September, SolarPlaza held the second Global PV Demand Conference in Valencia, Spain. The conclusion was that the huge growth in solar module production over the next two years, compared with the ?modest? growth in demand, would lead to an oversupply situation commencing in 2009. The experts in attendance predicted that this would create a consolidation phase in the PV industry. This conclusion was drawn even before the international credit crisis began. The difficulty in obtaining finance for new solar energy systems is now visible in the European PV markets. Even worse is the situation in the USA. Not only is the credit market frozen, the country is also facing economic recession in 2009 and possibly even 2010. Under these conditions, with the oil price falling and with no bank to finance PV system investments, customers might think twice about spending their savings on solar energy. Therefore, the credit and economic crisis may prevent rapid growth in both the US and the global PV markets. Together with the inevitable oversupply situation already predicted for 2009, the solar PV industry could be facing very hard times over the next two years. For the longer term, market forecasts are extremely positive. Industry consolidation will bring module prices down further. And, within a few years, one solar kilowatt hour will equal the price of electricity from the grid (?grid parity?) in the world's sunny regions. This will unleash unlimited market potential.

As a result, for the short term, financially weaker solar cell and module manufacturers, and those without a foothold in the world's key PV markets, will be put out of business or driven into the hands of some larger partner. In other words, the global economic crisis will speed up the consolidation phase in the PV industry.

Who will be the winners?
The world's leading manufacturers in the solar industry are well placed for continued growth in 2009. The top 10 of the world's biggest solar module manufacturers includes several Chinese companies, like Suntech Power, Yingli Solar and Trina Solar. These companies started up during the first wave of new Chinese PV industries a few years ago, and all three of them are listed on the New York Stock Exchange. They have grown rapidly and made healthy profits in 2007 and 2008. Their track record will help them to remain on the shortlist of banks financing PV projects. Their full order books will help them through a more difficult market phase in 2009. However, there are dozens of other manufacturers out there on the market. Many of them are relatively small, or just started trading in 2007, following the hype to produce solar modules. Back in 2007, the market became very hungry for modules. The availability of modules counted for more than the brand name. Now European and US banks are hesitant to provide PV project finance. A manufacturer needs to be highly bankable, or at least will need to offer sufficient financial guarantees, before any shipments can take place. If a company fails, all its modules will need to be returned, or the investor repaid. Only the bigger, financially sound companies will be able to fulfill these requirements. The first signs from China are that several smaller manufacturers are stopping production or actively looking for a takeover.

Companies and (big) manufacturers with healthy balance sheets and full order books will be in a good position to survive a difficult 2009.

The second wave
Nevertheless, it could turn out that the future winners among the manufacturers will be relatively unknown players: companies that have just started producing solar wafers, cells and modules, that have a strong vision, a conviction that the solar energy market will continue to grow in the long term, and deep pockets to see them through a difficult start-up phase under the current economic conditions.

Some major production initiatives by industrial companies or conglomerates with a variety of backgrounds have been announced or are underway ? from a glass manufacturer (CSG), to an industrial glove manufacturer (QS solar), to an energy utility (ENN), to a manufacturer of electronic devices (Chint). Their balance sheets will easily be more robust than those of the better-known existing European module manufacturers.

The benefit for European and US companies is that the Chinese companies will still need to develop their sales and distribution network structures in key markets. They are keen to do business directly with bigger end customers like PV project developers. And they are willing to offer financial security packages to overcome the doubts of banks and customers. Developers in Europe might ask themselves why they should pay ?0.30/Wp more for a well-known European module brand if the Chinese manufacturer is offering a full financial security package and is backed by a hundredmillion or more dollar parent company with thousands of employees.

It is difficult to give prices for their modules, since currencies are so volatile, but recently prices have been offered of between $3.60 and $3.75/Wp for deliveries of crystalline modules up to the end of 2008.

Several of these major new Chinese players have moved into thin film. In 2009 alone, total installed capacity could exceed 1.5 GW, then rapidly expand to double that figure one year later. This new wave of solar modules will start coming onto the market in early 2009, when the products will have their full IEC/UL certification. Prices will depend on the state of the dollar, but offers have been seen of $2.50/Wp.

These major new players may very well be among the manufacturers that survive the imminent consolidation phase. They can take a little head wind and prepare themselves for rapid market growth in the long term, when it will be full steam ahead once more.

Taiwan-based Green Energy Technology invests in China maker of solar silicon wafers

Nuying Huang, Taipei; Adam Hwang, DIGITIMES [Tuesday 21 October 2008]

Green Energy Technology (GET), a Taiwan-based producer of solar-grade polycrystalline silicon wafers, on October 20 announced its investment of US$5.05 million for a 40% stake in a new joint-venture provider of slicing solar-grade polycrystalline silicon ingots into wafers in northern China, according to GET.

The new provider, with does not yet have an English corporate name, begun factory construction earlier in October 2008 and is expected to start operation in the second half of 2009 with an initial annual production capacity equivalent to 60MWp, GET indicated. While the joint venture is to supply makers of solar cells in China, its establishment is in line with Tatung Group's business strategies of solar energy in the China market, GET pointed out. GET is a member of Tatung Group.

GET will expand its production capacity of polycrystalline silicon wafers in Taiwan through setting up additional lines of slicing ingots into wafers, the company indicated. The additional lines will be completed in the third quarter of 2009, with their aggregate capacity to account for 80% of EGT's total domestic capacity, the company noted.