Suntech Power Holdings Company Ltd.(STP) has entered a collaboration agreement with three companies to boost its offering of Smart Panel Technology. The company has entered an agreement with Azuray Technologies, Enphase Energy and National Semiconductor.
Suntech Power aims to increase its solar energy generation from its panels by using Azuray Technologies’ maximum power point tracking (MPPT) DC to DC technology, which yields up to 25% greater solar energy from panels. Azuray Technologies’ is one of the companies engaged in solar power optimization electronics.
Suntech Power’s collaborative agreement Enphase Energy, a leading player in microinverter systems, will focus on the integration of Enphase microinverters into Suntech panels to simplify and accelerate solar system installation and maximize energy output.
Lastly, Suntech Power aims to tap Tigo Energy’s expertise in increasing efficiency in photovoltaic (PV) solar installations.
Wuxi, China-based Suntech is a leading solar energy company in the world. The company designs, develops, manufactures and markets photovoltaic (PV) cells and modules. Consistent focus on tapping new markets led to a spike in demand for the company’s products in emerging markets like Greece, Czech Republic, Benelux Region and Italy. The company had aggressively expanded its manufacturing capacity from 30 MW in fiscal 2003 to 1.1 GW in fiscal 2009. Looking ahead, the company plans to raise its capacity to 1.8 GW by fiscal-end 2010.
Suntech Power is also pinning its hopes on the U.S. market, where its sales grew 35% sequentially in the second quarter of 2010. The company is eyeing a 15% – 20% market share in the US in 2010. To boost its U.S. fortunes, the company is also constructing a 30 MW manufacturing facility in Goodyear, Arizona to compete for solar projects in the U.S. that are not open to foreign manufacturers. The facility is expected to be completed by the fourth quarter of 2010.
Suntech’s products are used in a variety of residential, commercial, industrial and public utility applications around the globe. The company also provides PV system integration services in China and U.S., and is expanding into the development of utility scale solar power systems. Suntech Power’s predominantly China-based manufacturing base gives it a distinct cost advantage over its U.S. and European peers.
Our Neutral recommendation on the stock indicates that it would perform in line with the broader market. In the near term we believe its Zacks #1 Rank (Strong Buy) peers like JinkoSolar Holding Co. Ltd. (JKS), China Sunergy Co. Ltd. (CSUN) and ReneSola Ltd. (SOL) are more promising compared to the Zacks #3 Rank (hold) Suntech Power stock.
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