News about photovoltaics and solar electricity
ICIM (an indipendent Italian institute) confers "Made in EU" certificate to Trina Solar. Trina's multicristalline modules are manufactured with European-sourced silicon wafers. With this certificate, multicristalline modules from Trina now fulflill the requirements of the italian Conto Energia IV that allow an additional 10% FIT premium in Italy.
Full article: Electroiq.com
So now the first manufacturers have bypassed the reglement of the Conto Energia IV that has been implemented to support manufacturers from the EU. I personally thought there would be found a way to avoid this reglement earlier...
For me no big surprise. This could be estimated. I even think that other manufacturers will follow Trina.
The italian Conto Energia IV has to be overworked in this case. A clear definition of what means "Made in EU" has to be implemented. Or falls this definition to the EU or any other organisation and the italian government can't change this subject? In this case the whole Conto Energia has to be overworked - in my opinion. The conditions of module-manufacturing which qualify for FiT would have to be overworked in this case.
for me neither....
I'm not against asian manufacturers and products, but european suppliers need to be protected from dumping prices which follow subsidies of the chinese governemnt. If (asian) companies can be competitive on their own and still offer lower prices, that's ok. But thats where the european union is in demand, not its individual members..
They can't even be competitive with subsidies from their government as Suntech shows - $1 billion operating loss in 2011.
This is crazy. Companies like Suntech should be stopped by someone. But who? Let's hope that punitive tariffs come to U.S. and to Europe as well.
Most of the losses for all the Chinese players have been due to one time charges associated with polysilicon contracts. Jinko, who arrived late to the game and didn't have all those long term contracts managed to make money in 2011. This tells you how strange the market was in 2011. It makes little sense that a company half the size of Suntech with nowhere near their pricing power can make money when Suntech could not. Again, it's all those old contracts that had to be reworked. All that stuff is 90% out of the way now. 2012 should be different - still difficult but different.
That's interesting. Could be one reason. I haven't thought about this matter, yet. Do you have more information or is it just a general guess?
First time companies (and their decision makers) face such a tough time in this branch. Now we will see, who really knows how to do his job (or even did in the past). From 2008 - 2010 it was not a big thing to make money in this branch.
I'm not making this up - I read the earnings statements from Suntech, Trina, Yingli etc. These companies break down where and how they lost money. Renegotiation of polysilicon/wafer contracts cost Suntech hundreds of millions of dollars in 2011. The poly/wafer contracts coupled with the inventory write-downs make up the lion's share of all these companies losses.
I'll scan through the Suntech, Yingli, Trina Q4s and pull out some of these details.
This is a complex story that has developed over several years. This is my first attempt to break it down.
In general all the bad contracts I was talking about point back to polysilicon and wafers. Back when the spot price for poly reached up over $400/kg a lot a dumb deals were made. The time period followed close on the heels of the initial public offerings of Suntech, Trina, Yingli etc. These companies were flush with money but short on foresight. Some of those bad deals involved long term contracts for poly (Nitol, Hoku). Another genre of bad deals involved investments into thin-film technologies (SunFab, CIGS). All of these bad investments are unwinding now. AMAT has cancelled its SunFab program, Oerkilon has sold off its a-Si business, Solyndra failed, First Solar is failing etc. These failures are mostly the result of cheap silicon. Counter-intuitively, even though the Big Chinese players are c-Si manufacturers, cheap silicon hasn't benefited them altogether. This is primarily because they were still paying the old prices for poly and wafers and they couldn't compete against the manufacturers like Jinko who out of dumb luck had more exposure to the spot market.
"The big news, however, is that Suntech expects a loss of $147 million to $179 million. The loss comes due to charges paid to wind down two side experiments: amorphous silicon panels and investment in wafer maker Shunda. Closing down the amorphous project will result in $50 million to $55 million in charges while Suntech will pay $106 million to $126 million to Shunda."
http://www.greentechmedia.com/articles/ ... up-for-2q/
Here is a $120 million dollar contract that Suntech paid out in July of 2011. The second link suggests there's an additional $92 million associated with the MEMC contract for a total loss of $212 million. On top of this there's $24 million in losses asssociated with its thin-film investment in CSG Solar.
http://www.edn.com/article/518718-MEMC_ ... y_deal.php
http://www.pv-magazine.com/news/details ... z1onLe7Nk6
Here are some additional mistakes by Suntech.
"In Suntech's case, total charges are expected to reach $571m, reflecting a myriad of legacy mistakes. Of this total, $407m are goodwill and intangible asset write-downs, $109m are write-offs of bad investments linked to Shunda and Nitol, and $55m in write-downs of the company's own facilities.
The vast majority of these charges are linked to bad strategic and investment planning prior to the first major solar industry downturn in late 2008. During the initial boom, credit was easy especially for an industry leading name like Suntech. In 2007 and 2008, STP was able to raise over $1b on convertible bonds in two separate Wall Street offerings, and as the saying goes, the company spent it like drunken sailors. Total charges since late 2008 have surpassed a billion dollars. As a result, the company has accumulated a high debt level with little to show for it."
http://seekingalpha.com/article/398371- ... tech-power
Suntech is probably one of the best and the worst run companies in the PV business. They've been completely burned by their attempts to invest in thin-film. Their investments in poly-production cost them tens if not hundreds of millions. Their investments in wafer integration also cost them hundreds of millions.
I like Suntech. I find their scale impressive. I like the CEO's back-story. I like their R&D program. I'm hopeful they can recover from all these mistakes they've made.
Last edited by eleh on 16.03.2012, 20:27, edited 1 time in total.
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