Positive Environment News

SolarWorld Sees Chance To Expand In U.S.

Date: 24-May-10
Country: us
Author: Dana Ford

SolarWorld AG, one of Germany's largest solar companies by revenue, is betting big on U.S. production, expecting to lift its capacity here to 500 megawatts by year's end and maybe double that if demand remains strong.

Boris Klebensberger, chief operating officer of SolarWorld and president of its Americas unit, said the company is using about half of the available space at its Hillsboro, Oregon location.

SolarWorld is in the final stage of an expansion at Hillsboro, meant to boost U.S. production capacity to 500 MW.

But Klebensberger said there could still be room to grow.

"We could easily double (our capacity)," he told Reuters in a telephone interview on Friday. "When's the next step for the U.S.? I don't know. But will it come? I'm rather sure."

Many other foreign solar panel makers are also adding capacity in the United States.

While Germany is the No. 1 solar market, the United States is expected to emerge as one of the largest for the alternative energy source as European subsidies are cut and most U.S. states require utilities to increase their use of solar and wind.

Japan's Kyocera said in March it would begin making solar modules in California this year, while China-based Suntech Power Holdings Co and Yingli Green Energy Holding Co Ltd have announced similar plans to expand in the United States.

Klebensberger declined to comment on SolarWorld's U.S. sales expectations for the year and said the company was not operating with a specific market share target in mind.

Broadly, he said SolarWorld's goal is to be among the top suppliers in the United States.

Besides Oregon, SolarWorld also has a plant in Camarillo, California, which has been operational since the late 1970s.

The company, along with several of its German peers, voiced objections last year to the pricing practices of Chinese panel makers, which are among the industry's lowest-cost producers and are making big strides in the U.S. market.

"On a level playing field, we do not fear competition," said Klebensberger.


Demand for solar equipment in recent months has rebounded from weak levels in 2009 as investors rush to install systems in Germany ahead of the expected subsidy cuts later this year.

But solar stocks have not followed the upward trend, as looming uncertainty weighs. The current weakness in the euro, and European markets more generally, also have been a drag.

"People see more risk than chances for the time being," said Klebensberger about solar opportunities.

Shares of SolarWorld, which have fallen some 45 percent this year, have been among the hardest hit.

Klebensberger said he expects to see a softening of panel prices after the subsidy cuts in July, but said prices should fall less than the 16 percent German feed-in tariff cut.

Specifically, he said he expects panel prices to fall less than 10 percent in the second half of the year. They dropped 40 percent on average last year.

As prices continue to drop, Klebensberger said competition among solar companies will be increasingly intense and that several likely will not survive.

"Overall in the solar sector, I guess it's all about finding out who will be the winner," he said.

(Editing by Richard Chang)

© Thomson Reuters 2010 All rights reserved

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