Suntech Power (NYSE:STP)
Interest in renewable energy is getting a boost as China announces it will boost its Solar Power Goal. China plans to increase its goal for solar-power installations in 2015 by 67% to reduce its reliance on fossil fuels.The world’s biggest emitter of carbon-dioxide plans to raise the solar target to 35 gigawatts by 2015 from 21 gigawatts set last year. The new target would increase solar power installations by more than five-fold from 6.5 gigawatts of capacity as of the end of last year, according to Bloomberg New Energy Finance data. This should boost demand for makers of solar panels such as Yingli (already in our portfolio) and Suntech Power Holdings.
Last year, Chinese manufacturers led by Suntech Power Holdings Co. (STP) and Yingli Green Energy Holding Co. (YGE) faced weaker demand from the US and Europe and a supply glut that has driven panel prices down by 25% in 2012. But this new demand from within China should give Suntech a huge boost. The stock price could be due for a rebound - it was trading above $10 back in 2011! Certainly we see a big upside from where it is trading today - at around $1.45.
Suntech recently announced that it will deliver 100 megawatts (MW) of solar panels for two planned projects in South Africa undertaken by a syndicate steered by Mainstream Renewable Power. The solar plants are the first projects to get licenses under South Africa’s ambitious Renewable Energy Independent Power Producer Programme (“REIPP”). The plants will be developed at two individual sites in the Northern Cape of South Africa. Munich-based electronics and engineering conglomerate, Siemens AG (SI) will oversee the design and construction aspects of the dual solar program. The plants are anticipated to come online by mid-2014. This project will employ Suntech’s V series module which goes well with utility-scale power plants. In addition, the solar systems will generate production capacity of 180 gigawatt-hours which will adequately power roughly 15,000 homes. The eco-friendly programs are expected to displace about 180,000 tons of carbon emissions per year.
Suntech’s aim at expanding its business footprint overseas and converting its existing domestic manufacturing bases into cost-effective units will certainly lend constancy to its earnings, going forward.
Suntech has been supplying its proprietary solar panels to customers round the world. Lately the company supplied solar panels for a 44-MW, collaborative solar plant in Bangkok to Bangchak Public Petroleum Co. Ltd. The company also won a contract from Portugal’s EDP Renovaveis for the supply of 39 MW of polycrystalline solar panels. These high-quality programs will strengthen its presence in the global solar market.
Suntech Power Holdings Co., Ltd. was founded in 2001 and is headquartered in Wuxi,China.
It is a solar energy company, which engages in the design, development, manufacture, and marketing of photovoltaic (PV) products. It offers monocrystalline and multicrystalline silicon PV cells; PV modules, silicon ingots/polysilicon wafers; and building-integrated photovoltaic products. The company also provides PV system integration services, including the design, installation, commissioning, and testing of PV systems; and project development services. Its products are used to provide electric power for residential, commercial, industrial, and public utility applications primarily in Germany, Italy, Spain,France, Benelux, Greece, the United States, Canada, China, the Middle East, Australia, and Japan. The company sells its products through value added resellers, such as distributors and system integrators; and to end users, such as project developers.
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