The August issue of PVNews delves deep into project finance. The feature story is a 2010 year-in-review piece that looks at renewable project finance featuring main players in both the debt and tax equity markets. Also included in this most recent issue is an introduction to vendor finance in the downstream domestic market. An excerpt from that article follows.

With a seemingly endless supply of low cost c-Si modules flooding the market, some Tier-II Chinese manufacturers have turned to vendor finance to differentiate themselves from the competition. During periods when global demand outstripped supply (2005-2008, 2H 2009, 2010), it made sense for this influx of lesser-known manufacturers such as Aide Solar, DelSolar and Jenn Feng to fill the void in the market. However, with the boom and bust of the Czech Republic’s solar market in 2010, the demise of the utility power plant sector in Italy, and a slow Germany in 1H 2011, inventory levels have ballooned and severe oversupply has surfaced in the market.

Given this, one might expect many of these firms to simply disappear. Some have, but walking the floor at Intersolar North America clearly shows that more Chinese suppliers are entering the space than leaving it. In particular, these companies are now looking to the United States’ growing utility segment. But with low-cost modules readily available from top-tier firms such as Yingli, Trina, and Suntech, these companies must differentiate themselves from their established competition in order to gain share in the North American market.

The following is a partial list of the more than 30 Chinese companies in attendance at the Intersolar conference:

  • Zhejiang Hengji PV-Tech Energy Co., Ltd, Oviera Solar Co., Ltd, Ningbo Qixin Solar Electrical Appliance Co., Ltd., Zhong Jing Solar Co., Ltd., Zhejiang Sunology Co. Ltd., Giga Solar Holdings, Talesun Solar Co., Ltd, Phono Solar, UE Solar Co., Ltd., Risen Energy Co., Ltd., Zhenjiang Tianlang Luminous Energy & Photoelectricity Co., Ltd., Zhejiang Solar Best Energy Technology Co., Ltd

It is likely that most PVNews readers are only vaguely familiar with these companies. Despite this fact, many had booths as large as any other on the show floor. Almost all of these manufacturers displayed both mono- and multi-crystalline offerings at multi-hundred-megawatt capacities, and all claimed to be bankable suppliers. Though, in reality, these manufacturers trail top-tier players considerably in this regard and are forced to compensate by offering modules at a 10% to 20% discount relative to more bankable suppliers. Unfortunately for them, however, recent price drops in modules (spot levels are currently at $1.30/Wp for Tier-I Chinese suppliers) have pushed Tier-II prices close to cash costs. Unable to stimulate further demand by dropping prices further, some of the lower tier newcomers are employing creative downstream strategies to help their products gain market share...

To continue reading about vendor finance and the individual firms that have chosen to explore this downstream strategy, subscribe today to PVNews. To download the complete July 2011 edition of PVNews, which includes the ranking of top-10 developers in U.S. utility-scale PV, please click here.

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