Chinese solar PV maker Trina Solar Ltd. (TSL) has announced a five-year contract extension with another Chinese company that produces polysilicon and solar wafers. Trina plans to use the materials to produce about 8,500 megawatts of solar modules over the next 13 years.
The original contract began in April 2008 and was to run for eight years. This extension does not change any terms of that contract; it adds five years beginning in 2016 at already agreed-upon volumes and prices, though a price adjustment is possible based on market prices.
Meanwhile, Suntech Power Holdings Co., Ltd. (STP) has completed a 10 megawatt PV solar generation plant in the Nigxia Autonomous Region of China. This is the first utility-scale PV plant in China, and Suntech plans to expand capacity to 50 megawatts by 2011. The newly-started plant will displace about 20,000 tons of carbon dioxide emissions annually. Suntech’s partner in this enterprise is a government-owned entity called the China Energy Conservation Investment Co. Ltd.
The upbeat news from Trina and Suntech is giving another solar maker, LDK Solar Co. Ltd. (LDK), a headache. LDK is solely a supplier of polysilicon wafers. Trina and Suntech both manufacture polysilicon and make solar PV cells. And that latter is where the money is now.
In addition to being a major maker of solar products, China is becoming a major buyer of PV solar cells as it attempts both to clean up its act and to support the solar makers who many experts believe will be overproducing solar equipment by the end of the year. Lord knows China can afford to buy and install solar power generation. Still, by managing its solar industry’s markets, as well as its production, the government had better be sure its calculations are correct because any disruption either to the market or to the source of supply could poke a serious hole in China’s solar industry.
So far this morning, Trina ADRs are trading on the NYSE at $32.75, up around 3%, near the top of the company’s 52-week range of $5.61-$35.95. Suntech shares are also up marginally to $15.49, near the middle of its 52-week range of $5.09-$37.54. LDK Solar shares are off 4.23%, down to $8.60 in a 52-week range of $3.75-$33.87.