Chinese solar panel maker, Suntech Power Holdings, has crossed the all-important milestone of being able to produce 1 gigawatt of solar panels a year. The company celebrated the accomplishment last week, along with the opening of a new headquarters in the city of Wuxi that comes with 1-megawatt solar panels built into building’s facade in addition to a host of energy-efficiency features.
Reaching 1 gigawatt is worth boasting, although investors will be more concerned with what the company does now that it has that capacity – and how it weathers the economic downturn. Suntech’s CEO Zhengrong Shi said an oversupply of panels in the world market would likely lead to a 25 percent to 30 percent drop in Suntech panel prices in 2009. A growing supply of polysilicon, the key ingredient for making solar panels, along with the battered global economy will take the blame, analysts have noted.
Last November, the company cut its 2008 sales and shipment forecast after its customers had delayed orders. Suntech expected to ship 490 megawatts instead of 550 megawatts worth of panels by the end of 2008. For 2009, it anticipated shipping more than 800 megawatts worth of panels (see Weak Euro Prompts Suntech to Slash Sales Forecast).
Competing solar companies that are close to reaching 1-gigawatt capacity include Q-Cells in Germany and First Solar in the United States. Q-Cells recently lowered its 2009 production and sales forecast after its customers wanted to postpone deliveries, reportedly leaving the firm with solar cells that it couldn’t resell quickly.