Suntech Chairman expects more losses
May 31, 2012 Category Alternative energy, Environment
Solar power equipment and parts will remain in major global oversupply and product prices will continue to be under downward pressure for at least another year, according to Shi Zhengrong, Chairman of Suntech Power Holdings. He said the Chinese government should consider asking banks to relax lending to companies in the solar industry, many of whom are reporting widespread losses, tight cash-flows and rising interest expenses. “It is difficult to say when oversupply will be corrected. I’d say it will take at least 12 months,” Shi said on the sidelines of the SNEC International Solar Industry and Photovoltaic Exhibition & Conference. “I don’t see any sign of a product price rebound.” New York-listed Suntech, which is based in Wuxi, Jiangsu province, reported a net loss of USD1 billion for last year, compared to USD237.9 million profit in 2010, as product prices fell faster than costs were reduced. Declining sales due to lower subsidies in the main market for solar – Western Europe – were more than offset by growth in other markets, led by the United States and China. But sharply lower panel prices due to intense competition cut profitability markedly. The global solar power panel manufacturing capacity is around 70 gigawatt (GW) a year, of which 50 GW comes from China, according to Li Junfeng, Deputy Secretary General of the Chinese Renewable Energy Industries Association. Last year global panel installations amounted to only 27 GW. But Li does not have much sympathy for solar panel manufacturers. “The difficulties the industry players find themselves in were not caused by poor industry policies or weak demand. The overcapacity was created by the manufacturers and their financiers,” he told a panel discussion. “It’s a danger we warned the industry about years ago, yet it still could not be prevented. If we give them more financing, wouldn’t capacity grow even faster? The industry must discipline itself; it can’t expect a government rescue.”
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