Suntech Power Holdings Company Ltd. (STP) has been selected to power Taiwan ‘s largest solar power plant. The company will supply solar panels for the new 4.7MW solar plant in Young’an, Kaohsiung, which will nearly double the island’s current installed solar capacity of about 5MW.
The plant will be owned and operated by the Taiwan Power Company, and developed by Fortune Electric Company Ltd. Delivery of the 16,640 advanced polycrystalline modules, each with a peak power output of up to 280 watts, will begin in Jun 2010. The system is scheduled to become operational in early 2011.
Suntech Power’s entry into Taiwan comes at an opportune moment when the nation aims at raising its renewable energy production capacity by more than 10GW over the next 20 years.
Taiwan is serious about reducing its reliance on imported fossil fuels along with cutting carbon emissions to year-2000 levels by 2025. According to a Nov 2009 report of the Asian Development Bank, energy demand in Asia and the Pacific will grow by an estimated 2.4% annually for the next twenty years, a cumulative 80% increase between 2005 and 2030.
Suntech’s industry-leading products have already been utilized all around the region, including Japan, Indonesia, the Philippines, Australia, Korea, Thailand and mainland China, among others. Around the world, Suntech has delivered products to thousands of customers in over 80 countries.
Based in Wuxi, China, Suntech Power Holdings Company Ltd. is a solar energy company that designs, develops, manufactures and markets a variety of photovoltaic (PV) cells and modules, including a broad range of value-added building-integrated photovoltaics, or BIPV products.
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.
Suntech’s patent pending Pluto technology-enabled multicrystalline silicon modules can achieve higher conversion efficiency. The increase in conversion efficiency helps it to capture market share in the crowded PV market. A higher market share translating into higher product shipments helps expand gross margin through economies of scale.
Suntech Power is one of the largest producers of PV solar modules under its proprietary Pluto technology serving a geographically-diversified customer base. Positive factors include ongoing expansion programs, higher conversion efficiency through its Pluto technology-enabled modules, subsidy program in China, and improving operating efficiencies.
However apprehensions over the tepid module demand in Europe, rising competition, and financial stability of its customers overshadow the positives. Our Neutral recommendation on the stock indicates that it would perform in line with its peers like JA Solar Holdings Co., Ltd. (JASO), Trina Solar Limited (TSL), and Canadian Solar Inc. (CSIQ).
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