Spanish solar firm eyes China tie-ups
Spanish solar panel maker Isofoton, which expects European panel sales to fall due to cuts in government subsidies, aims to raise production capacity five-fold to 1.5 gigawatts in two years, by forming joint ventures in China, the Middle East and Latin America.
'Europe is undergoing difficult times. The market is slow-growing, even though governments and banks still give the solar industry favourable treatment,' chief executive Angel Serrano said on the sidelines of the SNEC Shanghai Photovoltaic Power Generation Conference.
Isofoton was now looking at the United States, Latin America, Asia and the Middle East for future growth, he said, noting that Europe would account for just half of its sales this year, compared to all of its sales two years ago.
Spain accounts for just 2 per cent of its sales.
It plans to establish 300 megawatts of panel production capacity in each of the new regions to add to its existing 200MW of capacity in Malaga, southern Spain, and 100MW of wholly-owned capacity which is slated to come on stream in September in Ohio in the United States.
European governments, including Germany, Italy and Spain, have been cutting back on subsidies over the last two years, as rapid rises in solar power consumption resulted in a growing burden on their budgets, which are being trimmed back in response to the region's debt crisis.
The cutbacks were also driven by a rapid fall in the price of panels, which made solar power increasingly competitive relative to conventional forms of energy.
The Spanish government last year spent around 0.2 per cent of its gross domestic product on subsidising solar power consumption in the nation, according to Bloomberg New Energy Finance.
Set up in 1981 as a spin-off from a university project driven by a professor of the Polytechnic University of Madrid, Isofoton was 80 per cent taken over by privately owned consulting firm Affirma two years ago.
South Korea's industrial automation products maker Toptec owns the remaining 20 per cent of the solar panel maker.
Serrano said Isofoton signed a preliminary agreement with state-owned China National Offshore Oil's (CNOOC) battery unit Tianjin Lishen in February.
It was now discussing a joint venture with its Chinese partner to build a plant on the mainland with an annual capacity of 150MW of panels and related energy systems, including power storage batteries.
China National Offshore is the parent firm of Hong Kong-listed oil and gas producer CNOOC Ltd.
This month, Isofoton and GCL-Poly Energy Holdings, the mainland's largest producer of the raw material used in making solar panels and wafers - polysilicon - announced they had signed a memorandum of understanding to co-develop and build 1,000MW of solar farms in the global market.
They plan to form a joint venture to make solar power system trackers - devices that orient solar panels toward the sun to maximise a system's conversion of sunlight into electricity.
Isofoton will supply the expertise in trackers and high concentration photovoltaic panels while GCL will be responsible for arranging project finance and engineering, procurement and construction services.
Isofoton also agreed to buy all of the solar wafers needed to make the panels for the solar farms.
The agreement, if realised, will allow GCL to boost sales and plant utilisation as it operates in a severely oversupplied industry that is reeling from losses.
The firm saw its share price plunge 7.7 per cent last Friday after it posted disappointing first-quarter profit margins on its wafers and polysilicon production cost figures.
Malaysian brokerage CIMB research analyst Keith Li estimated GCL to have made a net loss of around HK$300 million in the first quarter and a projected loss of HK$500 million for the whole of this year.
The percentage of Spain's total electricity output that is generated from using solar panels