Suntech has a bit of good American manufacturing news amidst a gloomysolarquarter.
2010 was a good year for solar suppliers. Global PV cell and module production clocked in at 23.9 gigawatts and 20.0 gigawatts, respectively, an annual year-over-year growth of around 110 percent. Bankable, low-cost suppliers such as Trina Solar and Yingli Green Energy recorded gross margins of over 30 percent for the year, and even smaller, less established players and higher-cost manufacturers enjoyed high utilizations and healthy profit margins.
2011 might be a different story.
The solar market is going through a rocky stretch. The cap on Italy's incentives in the world's second-largest solar market has slowed the growth of the EU market. And that slowdown has impacted the first quarter performance of solar giants like Trina Solar (NYSE:TSL), Yingli Green Energy (NYSE: YGE), SunPower, and even the mighty First Solar (Nasdaq: FSLR).
Shares of First Solar, SunPower (Nasdaq:SPWRA), Trina, and Yingli Green have taken a hit. JA Solar, the second largest maker of solar cells, expects the second quarter to be soft.
Hard times also look to have sealed the fate of Evergreen Solar (NasdaqCM: ESLR) and Energy Conversion Devices (Nasdaq:ENER). Both struggling companies are losing money amidst higher-than-sustainable production costs.
Amidst this harrowing trend, there is a small, happy tidbit from Suntech, the world's largest producer of solar panels.
The China-based firm just added a third production shift in Goodyear, Arizona. That’s an additional 30 U.S. jobs as the firm goes into around-the-clock protection to build about 15,000 solar panels per month.
Suntech will be supplying panels to Sempra Generation's massive 700-megawatt Mesquite Solar project, located near Phoenix, Arizona -- about 30 miles from Suntech's Goodyear Arizona plant. Some of the 280-watt panels produced at the the 117,000 square foot Goodyear factory are destined for the Mesquite plant. The factory remains on target to employ 150 employees by the end of 2011.
“We expect to expand the facility to reach up to 120 megawatts of annual production capacity within the next few years, particularly if Arizona’s policy environment continues to nurture the local market,” said Steven Chan,
President of Suntech America.
Admittedly, the 50 megawatts that the factory can produce annually and the 120 megawatts that the facility will eventually reach are a small sliver of Suntech's two gigawatt capacity -- but it's still a move in the right direction and perhaps the start of a trend that will spread to other Chinese manufacturers.