Chinese solar company Suntech Power said today it expects solar cell prices to go down as early as 2008 fuelling demand for solar energy. Suntech Power makes silicon photovoltaic cells for solar panels. Up to now the industry has been heavily subsided by government grants which have kept customer prices high. Suntech boss Sri Zhengrong said “price cuts would allow the industry to flourish without artificial supports, increasing its transparency”.
The biggest impediment to keeping prices low is likely to be the availability of silicon. There is a severe worldwide shortage of poly-crystalline silicon which could last for five years. Polysilicon prices have doubled in less than two years and are expected to rise by another 30 per cent in each of the next three years. The problem is due to the fact that polysilicon is also used to make silicon chips and there is competing demand between the booming semi-conductor industry and the rapidly expanding solar sector.
Suntech is the world’s fourth largest solar cell maker. Suntech Power is listed on Nasdaq capitalised at $US5.5 billion. 44 year old owner Shi Zhengrong, an Australian citizen, is now the richest man in China. Forbes estimate his personal wealth in 2006 at $2.2 billion. Remarkably China accounted for just 10 percent of sales. Most of Suntech's equipment is exported to Europe. Its key markets are Germany, Japan and Spain, all of which have statutory requirements for utilities to buy solar-generated power. The company sales soared 165 percent from 2005 to 2006, getting to just short of $600 million for the year.
Now it is beginning to focus on America. Currently the US accounts for just 3 per cent of Suntech’s sales. On Tuesday the company announced San Francisco would be its US headquarters. Zhengrong said that the US was slow to take up solar but that within two or three years it could become the world's largest solar market. He believes this growth will be spurred by abundant sunshine and leadership from states such as California. Looking beyond solar cells, he wants the company to design whole solar systems. Zhengrong said Suntech may establish a research centre in Arizona or California, and may want to buy more small solar companies.
Shi Zhengrong established his solar power panel manufacturing enterprise in 2001. Zhengrong was educated in Shanghai where he obtained a master's degree in laser physics. He moved to Sydney to study optics in the late 1980s. In 1989 he became a PhD student in the groundbreaking photovoltaics laboratory run by two University of NSW professors and solar pioneers Martin Green and Stuart Wenham. In 1995 Zhengrong was appointed deputy director for research at Pacific Solar, a co-operative venture between the university and Pacific Power. Zhengrong took out Australian citizenship and seemed content to stay in Sydney.
But he changed his mind after a 2000 visit to his homeland. Zhengrong was excited by the rapid development he saw and was persuaded to return to Wuxi on the outskirts of Shanghai to start up Suntech Power selling solar equipment. The company started with 20 employees and $11m in government grants. The company quickly turned a profit and by 2005 Suntech (STP) successfully launched on the New York Stock Exchange. It is now the largest solar module manufacturer in the world, has four production sites in China and employs 4,000 staff globally.
Despite Zhengrong being the product of the local university system, Australia has been slow to take up the challenge of solar power. Lack of funding and government climate change scepticism has irreparably damaged the industry here. Murdoch University Professor of Energy Studies Dr Phillip Jennings said scientists would lose research grants if they openly criticised Federal Government policies on renewable energy or climate change. “I think the Government has had a stopgap, sort of stop and go, approach to renewable energy,” he said. “Every time criticism has arisen or a crisis has blown up, they've thrown some more money at it.”
The government has short-sightedly stripped solar energy of research funding, as well as closing the Energy Research and Development Corporation and the Cooperative Research Centre for Renewable Energy. Former federal energy policy adviser Guy Pearce has blamed vested interests. “It's important to understand that some of the same interests who have persuaded our government to avoid emission cuts domestically also have an interest in domestic nuclear power,” he said. “Our two biggest uranium producers are also in the coal and aluminium business”.