Thursday, 19 May 2011

China enters global solar system via US

12 May 2011, Page: 26

US solar panel maker FirstSolar and China Power International New Energy (CPINE) said they will collaborate on solar power projects in China, the US and elsewhere. The arrangement helps FirstSolar gain access to China's solar sector amid shaky conditions in Europe, the leading solar market. CPINE "has a tremendous advantage and strength in operating in China, and we have a tremendous advantage and strength in technology but also in building utility systems", Kevin Berkemeyer, FirstSolar's China representative, said at a news conference yesterday.

The companies will explore opportunities within China. FirstSolar also will assist CPINE, a unit of China Power International New Energy Development, to find investment in the US and elsewhere. CPINE has planned 2 GWs of projects for the domestic market. FirstSolar has 2.4 GW planned in North America. "We are very pleased to build an extensive and in depth relationship with FirstSolar, a global leader in solar photovoltaic technology", said Li Xiaolin, CPINE's chairwoman.

FirstSolar says that potential cuts in subsidies from budget strapped European governments could reduce demand and prices for solar products. The company reported that first quarter earnings fell 33% from a year earlier, citing higher costs, the Europe slowdown and a 14% decline in prices for its panels.

Uncertainty over the future of European governments' feed in tariff programs special electricity rates that give renewable energy companies higher returns than what they would get in the free market are among the challenges facing solar companies in Europe. The continent accounted for more than 80% of all solar panel demand last year.

"We're interested in diversification", T.K. Kallenbach, president of FirstSolar's Components Business Group, said yesterday. "But we're also interested in working with countries to help them develop more sustainable long term policies". He cited a series of "boom and bust" cycles in Europe in recent years in which unsustainable feed in tariffs hampered solar industry growth.

Solar power companies increasingly are looking to China for growth. The government has reiterated plans to cut reliance on imported fossil fuels to reduce pollution and because Beijing views the imports as a threat to national security. The government in March said it would set 15% as a target for use of renewable energy by 2020.

Non fossil fuels currently account for 8% of the country's energy use. FirstSolar in January signed a memorandum of understanding with China Guangdong Nuclear Solar Energy Development to build a solar plant in northern China's Inner Mongolia region. FirstSolar executives said yesterday that negotiations continue but declined to say when construction would begin.