Ecotality Life

Here at Ecotality, we have had several recent posts about the global solar market and Suntech Power Holdings Co. (NYSE: STP). This week, the world’s fourth largest manufacturer of photovoltaic cells opened its U.S. headquarters in San Francisco.

First, some background. Gray-skied but well-incentivized Germany currently leads the world in PV installation, with 55% of market share. Japan holds second place with 17%, and the United States a distant third at 8%. Spain’s strong solar subsidies may even help the country surpass the U.S. by year’s end. Nevertheless, while the U.S. currently accounts for a mere 3% of STP’s sales revenues, the company expects that to change….

…And fast. STP predicts that our sunny climate (apparently company executives haven’t made it as far as Upstate NY…) and subsidies by states like California will propel the U.S. into the lead for solar sales by 2012. In fact, they project that America’s share of STP sales revenue will triple by end of 2007.

STP is moving forward aggressively to prepare for exponential growth in the solar market. The company says it is on track to reach annual capacity of 480 MW for 2007, more than three times their figure for 2005. And it has promised to introduce panels which exceed 20% efficiency by next year. This would surpass the industry standard of 16%, but would still lag behind silicon valley-based efficiency leader Sunpower (SPWR). Additionally, STP would maintain the advantage of a low-cost Chinese manufacturing base.

With its purchase of the Japanese firm MSK, Suntech has also entered the building-integrated photovoltaics (BIPV) segment. BIPV incorporates energy-creating solar cells into standard building materials such as windows and roof tiles (see Beth McKenna’s excellent Ecotality post on STP’s solar skylight for REI).

Finally, as we all know, the limiting factor for growth in the PV supply is the price and availability of Silicon material. And it looks like STP has scored big on that front as well. Earlier this week, STP announced that it has inked a $1.5 billion, 7-year deal for polysilicon with Asia Silicon. And they’re getting it for a song. The price is so low that STP may well achieve the renewable holy grail - a price point so low that it remains competitive with grid power sources. This is the major hurdle for bringing alternative energy products into the mainstream. With a low materials cost for silicon, the sky (or should we say “the sun”) is the limit!

STP stock reached an all-time high of $56.24 before retreating several dollars. It closed up 14% in afternoon trading. I’d say this would be one to watch.

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