Suntech Power Holdings Co (尚德), the world’s biggest maker of silicon solar panels, expects China to account for as much as 20 percent of its sales within three years as the nation tries to curb greenhouse gas emissions.
Sales in China amount to about 2 percent of the total at the company based in Wuxi, Jiangsu Province, chief executive officer Shi Zhengrong (施正榮) said in a July 3 phone interview from Beijing.
“China, once it decides to do something, it happens very quickly,” Shi said. “I think with solar it will be similar.”
The world’s biggest greenhouse-gas emitting-nation plans to boost capacity for producing electricity from sunlight to 10 gigawatts by 2020, enough to supply about 10 million US homes, from 1.8 gigawatts now, the Chinese Renewable Energy Industries Association said. China’s solar targets are likely to be about a 10-fold increase in the next decade, Shi said.
“If China does invest heavily in solar power as it has promised, it will be an increasingly attractive proposition for solar companies,” said Jenny Chase, an analyst at New Energy Finance in London. “Solar companies don’t follow the sun for business, they follow the subsidies to countries like Germany and Spain, which are the big markets.”
About 78 percent of Suntech’s revenue is generated in Europe, while the US accounts for about 7.5 percent, data supplied by the New York-listed company showed. Germany will likely remain Suntech’s biggest market by 2012, Rory Macpherson, the head of investor relations at the company, said by telephone.
A series of policy announcements in China encouraging renewable energy use, including subsidies for fitting solar panels on roofs, helped Suntech’s US depositary receipts gain 42 percent in the second quarter. The ADRs have climbed 57 percent this year and closed at US$18.37 last Thursday.
Suntech’s targets for sales growth in China are supported by the potential for domestic producers’ business to increase from a low base, Chase said. Chinese companies are well placed to gain from future increased demand because the government will be inclined to favor local manufacturers, she said.
Suntech is building contacts with local authorities as it awaits details of how the government will expand solar power in the coming decade, Shi said.