- JV Enhances Presence and Solar Opportunities in U.S. Market -
MENLO PARK, Calif., April 28 /PRNewswire-Asia-FirstCall/ -- Solar EnerTech Corp. (OTC Bulletin Board: SOEN) (the "Company") today announced the establishment of a joint venture with Jiangsu Shunda Semiconductor Development Co. Ltd. ("Jiangsu Shunda"), a leading PV raw material manufacturer, to pursue solar expansion opportunities in the U.S. region.
Jiangsu Shunda is one of the largest polysilicon and wafer manufacturers in China, with an annual production output of approximately 1,500 metric tons of polysilicon.
The U.S. JV company, which will be called Shunda-SolarE Technologies, Inc., is expected to begin operating in early May of 2009. The joint venture is expected to utilize Jiangsu Shunda's strength in polysilicon and wafer supply and Solar EnerTech's advanced solar cell technologies as well as its resources in the U.S. market. Overall, both parties believe the joint venture establishes a vertically integrated operation in the U.S. market with services ranging from the production of polysilicon to ingots and wafers, to solar cells, panels and solar system installation.
Jiangsu Shunda and Solar EnerTech contributed $1.0 million and $0.7 million in cash respectively to the initial setup cost of the JV. Jiangsu Shunda will own 55% of the JV company, Solar EnerTech will own 35% and the management of the JV will own the remaining 10%. Mr. Yunda Ni, President of Jiangsu Shunda will serve as the JV Chairman of the Board, Mr. Leo Young, CEO of Solar EnerTech will serve as the Board's Vice Chairman. The Board of Directors will be comprised of five seats, three of which will be reserved for Jiangsu Shunda and two for Solar EnerTech. A Chief Executive Officer of Shunda-SolarE Technologies is expected to be identified in the near future.
Mr. Leo Young, CEO of Solar EnerTech, commented, "We are extremely pleased to establish this joint venture with Jiangsu Shunda, a highly successful polysilicon manufacturer in China. We have a compelling opportunity to penetrate the U.S. market with the establishment of this JV. Solar EnerTech has strong R&D capabilities supported by an outstanding technical team, and a fully operational U.S. office governed by experienced management whereas Jiangsu Shunda maintains a UL listing, which is instrumental in conducting large scale operations in the U.S. market, and controls the upstream supply which can provide large volumes of silicon feedstock to the JV in order to secure sizeable contract orders in the growing U.S. market. Together, we can more easily penetrate U.S. solar opportunities and establish Shunda-SolarE as a leading brand recognized for high quality solar products and service. We plan on providing investors with additional information on this JV in the coming weeks and months ahead."
Mr. Ni, President of Jiangsu Shunda commented, "The goal of this joint venture is to build market share in the U.S. and maximize profitability. There is great synergy between both companies as well as with myself and Leo. Together, we believe we have an excellent opportunity to expand our market presence in the U.S. We look forward to a successful venture together."
Additional information on this joint venture can be found in the Company's filing with the SEC.
About Jiangsu Shunda
Based in Yangzhou, China, JiangSu Shunda Group focuses on the photovoltaic market and produces polysilicon, monocrystalline ingots, and wafers. With an annual production output of approximately 1,500 metric tons of polysilicon, Jiangsu Shunda Semiconductor is one of the largest polysilicon and wafer manufacturers in China.
About Solar EnerTech Corp.
Solar EnerTech is a photovoltaic ("PV") solar energy cell manufacturing enterprise incorporated in the United States with its corporate office in Menlo Park, California. The Company has established a sophisticated 63,000 square foot manufacturing plant located in China, in Shanghai's Jinqiao Modern Technology Park. Currently, the Company is capable of producing 50MW of solar cells from its existing production line.
Solar EnerTech has also established a Joint R&D Lab at Shanghai University to develop higher efficiency cells and to put the results of that research to use in its manufacturing processes. Led by one of the industry's top scientists, the Company expects its R&D program to help bring Solar EnerTech to the forefront of advanced solar technology research and production.
Showing posts with label wafer. Show all posts
Showing posts with label wafer. Show all posts
Tuesday, April 28, 2009
Thursday, December 20, 2007
LDK Solar's 3rd-Qtr Profit Skyrockets
2007 The Associated Press
NEW YORK — Chinese solar wafer maker LDK Solar Co. Ltd., which went public in the U.S. in June, said Wednesday its third-quarter profit leaped 40 percent on strong demand for its wafers and the expansion of its customer base.
But investors weren't impressed and the company's American Depository Shares tumbled $2.11, or 3.2 percent, to $64 in aftermarket trading, after falling $3.89, or 5.6 percent, to $66.11 in the regular session.
For the three months ended Sept. 30, LDK earned $41.6 million, or 37 cents per American Depository Share, compared with $5 million, or 4 cents per American Depository Share, for the same quarter in 2006.
Revenue soared more than five-fold to $158.7 million from $31.5 million in the year-ago period.
Analysts polled by Thomson Financial expected a profit of 37 cents per share on $143.2 million in revenue.
LDK officials said wafer demand remained strong throughout the quarter and the company signed four long-term wafer supply contracts during the period.
NEW YORK — Chinese solar wafer maker LDK Solar Co. Ltd., which went public in the U.S. in June, said Wednesday its third-quarter profit leaped 40 percent on strong demand for its wafers and the expansion of its customer base.
But investors weren't impressed and the company's American Depository Shares tumbled $2.11, or 3.2 percent, to $64 in aftermarket trading, after falling $3.89, or 5.6 percent, to $66.11 in the regular session.
For the three months ended Sept. 30, LDK earned $41.6 million, or 37 cents per American Depository Share, compared with $5 million, or 4 cents per American Depository Share, for the same quarter in 2006.
Revenue soared more than five-fold to $158.7 million from $31.5 million in the year-ago period.
Analysts polled by Thomson Financial expected a profit of 37 cents per share on $143.2 million in revenue.
LDK officials said wafer demand remained strong throughout the quarter and the company signed four long-term wafer supply contracts during the period.
Thursday, September 20, 2007
Solar polysilicon project breaks ground in Baotou
On September 8th 2007 Zhongjing Huaye polysilicon project broke ground in Baotou city.
The total investment is 1.23 billion RMB, the first phase project will be completed in early 2008, and then Zhongjing Huaye will be able to produce 32.4 million pieces of monosilicon wafers per year. The whole project will be completed by the end of 2010, Zhongjing Huaye then will have the polysilicon annual production capacity of 1200 tons.
Zhongjing Huaye is one state owned import and export company, and it is the subsidiary of China National Arts & Grafts (Group) Cooperation.
The total investment is 1.23 billion RMB, the first phase project will be completed in early 2008, and then Zhongjing Huaye will be able to produce 32.4 million pieces of monosilicon wafers per year. The whole project will be completed by the end of 2010, Zhongjing Huaye then will have the polysilicon annual production capacity of 1200 tons.
Zhongjing Huaye is one state owned import and export company, and it is the subsidiary of China National Arts & Grafts (Group) Cooperation.
China Sunergy was sued in U.S.A by stock investor.
China Sunergy, certain of its officers and directors, and the Company's underwriters are charged with including, or allowing the inclusion of, materially false and misleading statements in the Registration Statement and Prospectus issued in connection with the IPO, in violation of the Securities Act of 1933 by one stock investor, Thomas Brown, at New York South District court on September 7th.
Particularly, the Complaint charges that China Sunergy raised over $107.52 million through the issuance of 9.775 million shares, despite the Registration Statement's false and misleading statements that the Company: (1) was a "leading manufacturer of solar cell products, as measured by production capacity" that was experiencing remarkable revenue growth; and (2) had secured a sufficient supply of polysilicon, a raw material necessary to the continued production of its solar cell products. Yet at the time of the IPO and unbeknownst to shareholders, the Registration Statement failed to disclose that China Sunergy was already having difficulty obtaining a sufficient supply of polysilicon, which foreseeably would have a near-term adverse impact on earnings.
On July 3, 2007, only weeks after the IPO, China Sunergy issued a press release announcing preliminary results for 2Q:07 well below guidance, and claimed that it could suddenly not obtain critical raw materials necessary for production and its revenue goals. The Company's press release stated that "the relatively tight supply of polysilicon affected the quality, quantity and delivery of wafers and drove up overall wafer prices in the spot market, resulting in increased pressure on China Sunergy's margins."
The complaint further alleges that on this news, shares of China Sunergy fell nearly 25% in a single trading day, from a high of $14.90 on July 2, 2007, to a close of $11.28 the following day, on exceedingly high volume of 3.659 million shares. As the impact of China Sunergy's belated disclosures resonated in the market, shares of the Company continued to decline, to about $7.50 per share by August 23, 2007. Shares fell significantly lower days later, to below $5.00 per share -- on news that the Company's CFO was resigning – after China Sunergy revealed a loss of at least $.14 per share for 2Q:07. In all, China Sunergy shares fell from $16.70 per share from the highs following the IPO, to a low of below $5.00 per share -- all within approximately 10 weeks.
Particularly, the Complaint charges that China Sunergy raised over $107.52 million through the issuance of 9.775 million shares, despite the Registration Statement's false and misleading statements that the Company: (1) was a "leading manufacturer of solar cell products, as measured by production capacity" that was experiencing remarkable revenue growth; and (2) had secured a sufficient supply of polysilicon, a raw material necessary to the continued production of its solar cell products. Yet at the time of the IPO and unbeknownst to shareholders, the Registration Statement failed to disclose that China Sunergy was already having difficulty obtaining a sufficient supply of polysilicon, which foreseeably would have a near-term adverse impact on earnings.
On July 3, 2007, only weeks after the IPO, China Sunergy issued a press release announcing preliminary results for 2Q:07 well below guidance, and claimed that it could suddenly not obtain critical raw materials necessary for production and its revenue goals. The Company's press release stated that "the relatively tight supply of polysilicon affected the quality, quantity and delivery of wafers and drove up overall wafer prices in the spot market, resulting in increased pressure on China Sunergy's margins."
The complaint further alleges that on this news, shares of China Sunergy fell nearly 25% in a single trading day, from a high of $14.90 on July 2, 2007, to a close of $11.28 the following day, on exceedingly high volume of 3.659 million shares. As the impact of China Sunergy's belated disclosures resonated in the market, shares of the Company continued to decline, to about $7.50 per share by August 23, 2007. Shares fell significantly lower days later, to below $5.00 per share -- on news that the Company's CFO was resigning – after China Sunergy revealed a loss of at least $.14 per share for 2Q:07. In all, China Sunergy shares fell from $16.70 per share from the highs following the IPO, to a low of below $5.00 per share -- all within approximately 10 weeks.
Wednesday, May 9, 2007
Solar power pays off for Chinese entrepreneur
By Joe McDonald The Associated Press Published: April 23, 2007
SHANGHAI: Shi Zhengrong, a physicist, spent the 1990s in an Australian lab studying solar power, a field he picked by chance. He expected to devote his life to science.
Still, Shi saw signs of a blossoming industry as Germany, Japan and other countries invested in cleaner power. Excited by a trip home that showed him China's rapid development, he startled friends by abruptly moving his wife and two Australian-born sons to his homeland in 2001 to launch a solar equipment company.
Four years later, Shi's confidence paid off when his Suntech Power Holdings went public on the New York Stock Exchange and investors snapped up shares, turning him into a billionaire. Last year, Shi ranked No.7 on the Forbes magazine list of China's richest tycoons, with a $1.4 billion fortune.
Today, he has traded his research smock for blue business suits, a chief executive's 63rd-floor corner office and a role advising the Chinese government on renewable energy policy.
"We believed the share price would go up, but not so quickly," said Shi, a 43-year-old with a boyish face, chuckling at what he says was a rise marked by lucky breaks and timing. "I never thought I would be a rich guy."
Shi is the leader of an emerging group of Chinese entrepreneurs who are striking it rich by meeting fast-growing demand in China and abroad for cleaner power.
They are getting a boost from China's efforts to curb environmental damage after two decades of breakneck growth that have left it with some of the world's most badly polluted air and water. Chinese leaders also are promoting renewable energy in hopes of reducing mounting dependence on imported oil, which they see as a strategic weakness.
"The technological prowess of China is growing a lot faster than people in the West reckon," said Andrew Wilkinson, co-manager of a fund at the investment bank CLSA Emerging Markets that invests in Asian clean-energy industries.
Suntech's 3,500-strong work force at four sites in China produces photovoltaic cells, the delicate, hand-sized black silicon panels that can transform sunlight into electricity.
At a time when China's Communist leaders are trying to turn lumbering state companies into nimble global competitors, Suntech already goes head-to-head with Japanese and European rivals in foreign markets. Shi says that all of Suntech's technology comes from its own labs.
As of last year, Suntech had risen to be the world's fourth-largest maker of solar cells, according to an annual ranking by Photon International, an industry magazine. Sharp Corp. of Japan is the market leader and other competitors include Q-Cells of Germany, Kyocera of Japan and BP Solar.
Worldwide, experts expect industry sales to grow by 20 percent to 40 percent annually in coming years.
Suntech's key markets are Germany, Japan and Spain, which subsidize renewable energy by requiring utilities to buy solar-generated power and to pay more for it than they would for electricity from oil or gas.
China accounted for just 10 percent of Suntech's 2006 sales of $599 million. The equipment is expensive enough that its use in the company's home market is limited to lighthouses, remote military posts and other sites far from power plants.
But Shi says that the Chinese, U.S. and other markets will grow quickly as governments respond to concern about global warming by rolling out clean-energy initiatives. Beijing has ordered Chinese utilities to generate at least 10 percent of their power from solar, wind, hydroelectric and other renewable sources by 2010, with the target rising after that.
Despite his science background, Shi talks like a tough-minded businessman, and people in the industry say he is an able entrepreneur who moves between East and West and the worlds of technology and finance. He shifts easily between English and Chinese, and broke off twice during a 30-minute interview to take rapid-fire calls on his cellphone, first in the Shanghainese dialect, then in Mandarin.
David Edwards, an industry analyst for ThinkEquity Partners in San Francisco, said that Shi "comes across as a strong CEO who has a strong vision for his company and the future of his industry."
Shi is part of a generation that left China by the tens of thousands in the drab 1980s to study or work. They are now trickling back, lured by the booming Chinese economy's new opportunities.
He is also part of a growing group of returnees who are benefiting from government support for technology and new protections for private business. A few, like Shi, have become very wealthy by selling shares in their ventures on foreign stock exchanges.
Shi works 10- to 12-hour days and spends eight months a year on the road in Europe, the United States or China. But he said that he wants to devote more time to charity work, including an environmental education program that he launched with his wife.
Shi said he has little time to enjoy his wealth. "I'm a scientist," Shi said. "My hobby is solving technical problems."
"I never thought this solar business could take off or become commercially viable," Shi said. "I thought I just needed to concentrate on my research and publish papers to do my job as a scientist."
In the mid-1990s, Shi started visiting China regularly from Australia, where he was working for Martin Green, the New South Wales professor and solar pioneer, to lecture on solar power. Friends lobbied him to return to China. Shi acceded.
Soon afterward, the government of Wuxi, a city on Shanghai's western outskirts with ambitions to become a high-tech center, put up $6 million to finance Suntech, which started with 20 employees, and helped to land $5 million in research grants.
Suntech's main 11,000-square-meter, or 120,000-square-foot, factory is still in Wuxi, though Shi bought out his state backers before the IPO with the help of private investors led by Goldman Sachs.
At the Wuxi factory, technicians in green Suntech uniforms, surgical masks and hairnets turn 10-centimeter, or four-inch, silicon discs into solar cells.
Suntech cells are coated with power-producing films and sandwiched between sheets of glass in groups of 72 to form solar panels, each capable of generating 175 watts of power. That is too little to power three typical 60-watt light bulbs, but Suntech notes that it will light many more energy-saving bulbs.
Production is growing so fast that just two years after the factory opened in a special high-tech zone, Suntech is building a new one the same size a block away.
Shi said that Suntech's goal is to develop superior technology, and not just rely on China's low labor costs. But he said lower prices for skills and equipment will give the company an edge by making its $20 million annual research budget go further.
Shi said that as technology improves, Suntech hopes to be able to cut prices within five years from the current $3.50 per solar panel to $2.50 — a level that he said would compete with traditional power in California, a big potential market.
A Chinese law that took effect Jan. 1 — Shi helped to draft it — requires local authorities to favor renewable energy. The government has ordered power plants and factories to start complying with long-ignored emissions standards.
Those initiatives will create opportunities in industries ranging from wind turbines and nuclear power plants to pollution control and raising crops needed to produce ethanol and other clean-burning fuels, said Jing Ulrich, the chairwoman of China equities for JPMorgan Chase.
"It's so huge," Ulrich said, "no one can estimate the scale."
SHANGHAI: Shi Zhengrong, a physicist, spent the 1990s in an Australian lab studying solar power, a field he picked by chance. He expected to devote his life to science.
Still, Shi saw signs of a blossoming industry as Germany, Japan and other countries invested in cleaner power. Excited by a trip home that showed him China's rapid development, he startled friends by abruptly moving his wife and two Australian-born sons to his homeland in 2001 to launch a solar equipment company.
Four years later, Shi's confidence paid off when his Suntech Power Holdings went public on the New York Stock Exchange and investors snapped up shares, turning him into a billionaire. Last year, Shi ranked No.7 on the Forbes magazine list of China's richest tycoons, with a $1.4 billion fortune.
Today, he has traded his research smock for blue business suits, a chief executive's 63rd-floor corner office and a role advising the Chinese government on renewable energy policy.
"We believed the share price would go up, but not so quickly," said Shi, a 43-year-old with a boyish face, chuckling at what he says was a rise marked by lucky breaks and timing. "I never thought I would be a rich guy."
Shi is the leader of an emerging group of Chinese entrepreneurs who are striking it rich by meeting fast-growing demand in China and abroad for cleaner power.
They are getting a boost from China's efforts to curb environmental damage after two decades of breakneck growth that have left it with some of the world's most badly polluted air and water. Chinese leaders also are promoting renewable energy in hopes of reducing mounting dependence on imported oil, which they see as a strategic weakness.
"The technological prowess of China is growing a lot faster than people in the West reckon," said Andrew Wilkinson, co-manager of a fund at the investment bank CLSA Emerging Markets that invests in Asian clean-energy industries.
Suntech's 3,500-strong work force at four sites in China produces photovoltaic cells, the delicate, hand-sized black silicon panels that can transform sunlight into electricity.
At a time when China's Communist leaders are trying to turn lumbering state companies into nimble global competitors, Suntech already goes head-to-head with Japanese and European rivals in foreign markets. Shi says that all of Suntech's technology comes from its own labs.
As of last year, Suntech had risen to be the world's fourth-largest maker of solar cells, according to an annual ranking by Photon International, an industry magazine. Sharp Corp. of Japan is the market leader and other competitors include Q-Cells of Germany, Kyocera of Japan and BP Solar.
Worldwide, experts expect industry sales to grow by 20 percent to 40 percent annually in coming years.
Suntech's key markets are Germany, Japan and Spain, which subsidize renewable energy by requiring utilities to buy solar-generated power and to pay more for it than they would for electricity from oil or gas.
China accounted for just 10 percent of Suntech's 2006 sales of $599 million. The equipment is expensive enough that its use in the company's home market is limited to lighthouses, remote military posts and other sites far from power plants.
But Shi says that the Chinese, U.S. and other markets will grow quickly as governments respond to concern about global warming by rolling out clean-energy initiatives. Beijing has ordered Chinese utilities to generate at least 10 percent of their power from solar, wind, hydroelectric and other renewable sources by 2010, with the target rising after that.
Despite his science background, Shi talks like a tough-minded businessman, and people in the industry say he is an able entrepreneur who moves between East and West and the worlds of technology and finance. He shifts easily between English and Chinese, and broke off twice during a 30-minute interview to take rapid-fire calls on his cellphone, first in the Shanghainese dialect, then in Mandarin.
David Edwards, an industry analyst for ThinkEquity Partners in San Francisco, said that Shi "comes across as a strong CEO who has a strong vision for his company and the future of his industry."
Shi is part of a generation that left China by the tens of thousands in the drab 1980s to study or work. They are now trickling back, lured by the booming Chinese economy's new opportunities.
He is also part of a growing group of returnees who are benefiting from government support for technology and new protections for private business. A few, like Shi, have become very wealthy by selling shares in their ventures on foreign stock exchanges.
Shi works 10- to 12-hour days and spends eight months a year on the road in Europe, the United States or China. But he said that he wants to devote more time to charity work, including an environmental education program that he launched with his wife.
Shi said he has little time to enjoy his wealth. "I'm a scientist," Shi said. "My hobby is solving technical problems."
"I never thought this solar business could take off or become commercially viable," Shi said. "I thought I just needed to concentrate on my research and publish papers to do my job as a scientist."
In the mid-1990s, Shi started visiting China regularly from Australia, where he was working for Martin Green, the New South Wales professor and solar pioneer, to lecture on solar power. Friends lobbied him to return to China. Shi acceded.
Soon afterward, the government of Wuxi, a city on Shanghai's western outskirts with ambitions to become a high-tech center, put up $6 million to finance Suntech, which started with 20 employees, and helped to land $5 million in research grants.
Suntech's main 11,000-square-meter, or 120,000-square-foot, factory is still in Wuxi, though Shi bought out his state backers before the IPO with the help of private investors led by Goldman Sachs.
At the Wuxi factory, technicians in green Suntech uniforms, surgical masks and hairnets turn 10-centimeter, or four-inch, silicon discs into solar cells.
Suntech cells are coated with power-producing films and sandwiched between sheets of glass in groups of 72 to form solar panels, each capable of generating 175 watts of power. That is too little to power three typical 60-watt light bulbs, but Suntech notes that it will light many more energy-saving bulbs.
Production is growing so fast that just two years after the factory opened in a special high-tech zone, Suntech is building a new one the same size a block away.
Shi said that Suntech's goal is to develop superior technology, and not just rely on China's low labor costs. But he said lower prices for skills and equipment will give the company an edge by making its $20 million annual research budget go further.
Shi said that as technology improves, Suntech hopes to be able to cut prices within five years from the current $3.50 per solar panel to $2.50 — a level that he said would compete with traditional power in California, a big potential market.
A Chinese law that took effect Jan. 1 — Shi helped to draft it — requires local authorities to favor renewable energy. The government has ordered power plants and factories to start complying with long-ignored emissions standards.
Those initiatives will create opportunities in industries ranging from wind turbines and nuclear power plants to pollution control and raising crops needed to produce ethanol and other clean-burning fuels, said Jing Ulrich, the chairwoman of China equities for JPMorgan Chase.
"It's so huge," Ulrich said, "no one can estimate the scale."
China Aims to Clean Up in Solar Power
Its environment is a world-class mess, but the mainland has ambitious plans to use and produce solar power cells and panels
by Chi-Chu Tschang
China is home to some of the most polluted cities on the planet and likely will overtake the U.S. as the biggest emitter of greenhouse gases by the end of the decade. Yet while China's "dirty dragon" image is well-deserved, Beijing officials are also deadly serious about investing in solar power capacity at home and eventually becoming a dominant player in this rapidly-emerging, clean energy technology.
Consider that some 1,100 solar panels are being installed over the curved roof of Beijing's National Indoor Stadium, ahead of the 2008 Summer Olympics. In October, SunTech Power (STP), based in the old industrial city of Wuxi in Jiangsu Province will begin installing a 130 kilowatt solar energy system in the main venue of the games—Bird's Nest Stadium. Beijing has also been installing solar powered streetlights throughout the Olympic Village as well as in less urbanized areas of the Chinese capital's suburbs.
This isn't just environmental posturing, but a serious and sustained push to diversify China's energy mix, local officials contend. Beijing has pledged to install three megawatts of solar power for the 2008 Olympics. However, "If you add up all the solar energy investment in the Olympic Village, National Indoor Stadium, Bird's Nest, and rural villages, it is entirely possible that Beijing could have six megawatts by 2008," says Zhu Wei Gang, a vice-president with Beijing Corona Science & Technology, the company which is installing the solar panels in the National Indoor Stadium.
Ambitious Goals
China's worsening environmental mess (acid rain and water pollution are rampant, too) and an alarming dependence on imported oil have prompted Chinese President Hu Jintao's government to set some ambitious goals for solar power. Last year, China's solar power consumption was less than 10 megawatts, a tiny fraction of the country's total electricity consumption of 2.83 billion megawatts. By 2010, though, China hopes to be generating and consuming about 300 megawatts of solar energy, roughly equivalent to what Japan, the world's second largest consumer of solar energy, used last year.
Getting there, however, will be a stretch. China's domestic solar power industry is a work in progress. There are more than 150 Chinese companies that make photovoltaic cells that convert light into electricity, accounting for a third of the world's solar cell production. Yet the industry is heavily reliant on overseas supplies of polycrystalline silicon, or polysilicon, a key material used in solar cell production. And since demand for alternative energy has been low at home until recently, Chinese solar cell makers export 90% of their products to Germany, Japan, the U.S. and other countries.
There are compelling reasons for China to build up its own industrial solar energy capacity. The global market for solar panels and cells has been growing at a 38% compound annual growth rate since 2001. Demand is so brisk that there is now a serious shortage of polysilicon. In fact, prices for the material have jumped tenfold, to $200 to $300 per kilogram, since 2003.
"Foreigners Have Power"
If China developed a robust domestic market for solar power, it could shift the solar industry's balance of power, from the West and Japan to the Middle Kingdom. Just as the focal point of global TV and personal computer manufacturing has shifted to China, solar panel and cell production could be next, some argue. "If the domestic Chinese PV (photovoltaic cell) market starts to develop that would pretty much be the nail in the coffin for other countries because then not only will the cluster be here, but the [lower] manufacturing cost will be here," figures Timothy Chang, managing director of Citigroup Venture Capital China.
Still, given the anxiety other countries already have about Chinese export prowess, some governments may want to keep mainland-made solar cells out of their markets.
"Right now, China's solar industry relies on foreign imports for its raw materials and exports most of its finished products overseas," said Meng Xiangan, secretary general of the China Solar Energy Society. "The foreigners have, in their hands, the power to direct which way our solar industry is heading."
For instance, German Chancellor Angela Merkel is steering her country toward a policy of reducing its reliance on imported energy—and that includes "made in China" solar cells. "The German market continues to be the largest market in Europe. Its growth, however, appears to be slowing down over time," said Kevin Wei, chief financial officer of Shanghai-based SolarFun Power Holdings (SOLF).
Polysilicon Monopolists
Another huge obstacle to China's solar power industrial ambitions is the current shortage of polysilicon. Seven companies—including Germany's Wacker Chemie (WKCMF), Mitsubishi Materials (MIMTF), Sumitomo Titanium (SMOEF), and Renewable Energy Corporation ASA—hold a monopoly over the world's polysilicon supply.
Chinese solar cell makers have to pay dearly for the stuff, which has somewhat undercut their huge labor cost advantage. "Access to polysilicon serves as barrier to growth and entry for many Chinese companies," says Sanjeev Chaurasia, vice-president with the Credit Suisse's Energy Group. "If they have unfettered access to polysilicon, they'll be able to compete on cost and not necessarily on access to raw materials," she adds.
China is now trying to level the playing field by developing its own polysilicon supply. At least 11 new polysilicon projects are in the pipeline. China hopes to be able to produce 12,660 tons of polysilicon and break its dependence on foreign supplies by 2011, according to THT Research.
Little Incentive to Invest
However, whether these Chinese polysilicon suppliers can actually produce so much polysilicon remains to be seen. "It can be a problem to obtain the technology. Foreign technology suppliers are not so willing to sell them know-how and technology," points out Frank Haugwitz, a technical consultant with German Agency for Technical Cooperation. Chinese polysilicon suppliers have been using Russian technology to make polysilicon but have yet to replicate their German and Japanese rivals' scale of production.
Then there is the fact that Chinese power companies, which rely heavily on coal, have little incentive to invest in more expensive solar energy capacity given that electricity prices are fixed and they can't pass along the cost to consumers.
China's Renewable Energy Law, which went into effect January, 2006, ordered power companies to use a certain amount of renewable energy but failed to provide any financial incentives to do so. Beijing Corona Science & Technology's Zhu points out "The government needs to have a good policy to allow the solar industry to develop because the cost of solar power is too high right now."
Subsidies Not a Given
Chinese solar power companies have been lobbying the government to adopt a "feed-in tariff" system modeled after Germany's. Power companies would be forced to buy solar-generated electricity at a fixed rate and the government would kick in a subsidy to encourage them to use clean energy.
"There's not a big chance of such a policy coming out in the short-term," said Li Junfeng, secretary general of the Chinese Renewable Energy Industries Assn. He added that it would be difficult for the Chinese government to provide as much in subsidies as their German counterparts.
If these problems can be worked out, there is certainly plenty of demand for cleaner energy sources in the world's second biggest energy consumer behind the U.S.
So far, most of China's demand for solar power has come from government rural electrification projects in sparsely populated areas in Tibet, Qinghai, or Xinjiang provinces, where it does not make economic sense to build power stations.
Roof Panel Push
However the real growth in China's solar power market will continue to come primarily from these rural, off-grid, solar projects. China still has 30 million people—30,000 villages—with no access to electricity. German government official Haugwitz predicts that 180 megawatts of the new solar power in the coming years will be set up in these rural areas.
In addition, some local governments in high-power-consuming urban cities in coastal China are starting to encourage the use of solar energy. Right across the border from Hong Kong, the southern metropolis of Shenzhen now requires all new buildings 12 floors or higher to install solar water heaters on their rooftops. Experts predict that one-fifth of all rooftops in Shenzhen will be covered with solar panels by 2010.
Shanghai has announced plans to invest 10.5 billion yuan to install solar panels on top of 100,000 rooftops by 2015. The Shanghai municipal government will start by subsidizing half of the cost and gradually reduce subsidies as the price of solar panels drops.
Chi-Chu Tschang contributed this article to BusinessWeek Online from Beijing.
by Chi-Chu Tschang
China is home to some of the most polluted cities on the planet and likely will overtake the U.S. as the biggest emitter of greenhouse gases by the end of the decade. Yet while China's "dirty dragon" image is well-deserved, Beijing officials are also deadly serious about investing in solar power capacity at home and eventually becoming a dominant player in this rapidly-emerging, clean energy technology.
Consider that some 1,100 solar panels are being installed over the curved roof of Beijing's National Indoor Stadium, ahead of the 2008 Summer Olympics. In October, SunTech Power (STP), based in the old industrial city of Wuxi in Jiangsu Province will begin installing a 130 kilowatt solar energy system in the main venue of the games—Bird's Nest Stadium. Beijing has also been installing solar powered streetlights throughout the Olympic Village as well as in less urbanized areas of the Chinese capital's suburbs.
This isn't just environmental posturing, but a serious and sustained push to diversify China's energy mix, local officials contend. Beijing has pledged to install three megawatts of solar power for the 2008 Olympics. However, "If you add up all the solar energy investment in the Olympic Village, National Indoor Stadium, Bird's Nest, and rural villages, it is entirely possible that Beijing could have six megawatts by 2008," says Zhu Wei Gang, a vice-president with Beijing Corona Science & Technology, the company which is installing the solar panels in the National Indoor Stadium.
Ambitious Goals
China's worsening environmental mess (acid rain and water pollution are rampant, too) and an alarming dependence on imported oil have prompted Chinese President Hu Jintao's government to set some ambitious goals for solar power. Last year, China's solar power consumption was less than 10 megawatts, a tiny fraction of the country's total electricity consumption of 2.83 billion megawatts. By 2010, though, China hopes to be generating and consuming about 300 megawatts of solar energy, roughly equivalent to what Japan, the world's second largest consumer of solar energy, used last year.
Getting there, however, will be a stretch. China's domestic solar power industry is a work in progress. There are more than 150 Chinese companies that make photovoltaic cells that convert light into electricity, accounting for a third of the world's solar cell production. Yet the industry is heavily reliant on overseas supplies of polycrystalline silicon, or polysilicon, a key material used in solar cell production. And since demand for alternative energy has been low at home until recently, Chinese solar cell makers export 90% of their products to Germany, Japan, the U.S. and other countries.
There are compelling reasons for China to build up its own industrial solar energy capacity. The global market for solar panels and cells has been growing at a 38% compound annual growth rate since 2001. Demand is so brisk that there is now a serious shortage of polysilicon. In fact, prices for the material have jumped tenfold, to $200 to $300 per kilogram, since 2003.
"Foreigners Have Power"
If China developed a robust domestic market for solar power, it could shift the solar industry's balance of power, from the West and Japan to the Middle Kingdom. Just as the focal point of global TV and personal computer manufacturing has shifted to China, solar panel and cell production could be next, some argue. "If the domestic Chinese PV (photovoltaic cell) market starts to develop that would pretty much be the nail in the coffin for other countries because then not only will the cluster be here, but the [lower] manufacturing cost will be here," figures Timothy Chang, managing director of Citigroup Venture Capital China.
Still, given the anxiety other countries already have about Chinese export prowess, some governments may want to keep mainland-made solar cells out of their markets.
"Right now, China's solar industry relies on foreign imports for its raw materials and exports most of its finished products overseas," said Meng Xiangan, secretary general of the China Solar Energy Society. "The foreigners have, in their hands, the power to direct which way our solar industry is heading."
For instance, German Chancellor Angela Merkel is steering her country toward a policy of reducing its reliance on imported energy—and that includes "made in China" solar cells. "The German market continues to be the largest market in Europe. Its growth, however, appears to be slowing down over time," said Kevin Wei, chief financial officer of Shanghai-based SolarFun Power Holdings (SOLF).
Polysilicon Monopolists
Another huge obstacle to China's solar power industrial ambitions is the current shortage of polysilicon. Seven companies—including Germany's Wacker Chemie (WKCMF), Mitsubishi Materials (MIMTF), Sumitomo Titanium (SMOEF), and Renewable Energy Corporation ASA—hold a monopoly over the world's polysilicon supply.
Chinese solar cell makers have to pay dearly for the stuff, which has somewhat undercut their huge labor cost advantage. "Access to polysilicon serves as barrier to growth and entry for many Chinese companies," says Sanjeev Chaurasia, vice-president with the Credit Suisse's Energy Group. "If they have unfettered access to polysilicon, they'll be able to compete on cost and not necessarily on access to raw materials," she adds.
China is now trying to level the playing field by developing its own polysilicon supply. At least 11 new polysilicon projects are in the pipeline. China hopes to be able to produce 12,660 tons of polysilicon and break its dependence on foreign supplies by 2011, according to THT Research.
Little Incentive to Invest
However, whether these Chinese polysilicon suppliers can actually produce so much polysilicon remains to be seen. "It can be a problem to obtain the technology. Foreign technology suppliers are not so willing to sell them know-how and technology," points out Frank Haugwitz, a technical consultant with German Agency for Technical Cooperation. Chinese polysilicon suppliers have been using Russian technology to make polysilicon but have yet to replicate their German and Japanese rivals' scale of production.
Then there is the fact that Chinese power companies, which rely heavily on coal, have little incentive to invest in more expensive solar energy capacity given that electricity prices are fixed and they can't pass along the cost to consumers.
China's Renewable Energy Law, which went into effect January, 2006, ordered power companies to use a certain amount of renewable energy but failed to provide any financial incentives to do so. Beijing Corona Science & Technology's Zhu points out "The government needs to have a good policy to allow the solar industry to develop because the cost of solar power is too high right now."
Subsidies Not a Given
Chinese solar power companies have been lobbying the government to adopt a "feed-in tariff" system modeled after Germany's. Power companies would be forced to buy solar-generated electricity at a fixed rate and the government would kick in a subsidy to encourage them to use clean energy.
"There's not a big chance of such a policy coming out in the short-term," said Li Junfeng, secretary general of the Chinese Renewable Energy Industries Assn. He added that it would be difficult for the Chinese government to provide as much in subsidies as their German counterparts.
If these problems can be worked out, there is certainly plenty of demand for cleaner energy sources in the world's second biggest energy consumer behind the U.S.
So far, most of China's demand for solar power has come from government rural electrification projects in sparsely populated areas in Tibet, Qinghai, or Xinjiang provinces, where it does not make economic sense to build power stations.
Roof Panel Push
However the real growth in China's solar power market will continue to come primarily from these rural, off-grid, solar projects. China still has 30 million people—30,000 villages—with no access to electricity. German government official Haugwitz predicts that 180 megawatts of the new solar power in the coming years will be set up in these rural areas.
In addition, some local governments in high-power-consuming urban cities in coastal China are starting to encourage the use of solar energy. Right across the border from Hong Kong, the southern metropolis of Shenzhen now requires all new buildings 12 floors or higher to install solar water heaters on their rooftops. Experts predict that one-fifth of all rooftops in Shenzhen will be covered with solar panels by 2010.
Shanghai has announced plans to invest 10.5 billion yuan to install solar panels on top of 100,000 rooftops by 2015. The Shanghai municipal government will start by subsidizing half of the cost and gradually reduce subsidies as the price of solar panels drops.
Chi-Chu Tschang contributed this article to BusinessWeek Online from Beijing.
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