Positive Environment News

ReneSola Ups Outlook, Signals Bright Finish To 2010

Date: 08-Nov-10
Author: Adveith Nair

ReneSola, a China-based manufacturer of solar wafers, reported strong third-quarter results and joined other companies in the sector in signaling a bright finish to the year.

Sales of solar equipment have jumped this year as buyers rush to build projects ahead of declining subsidies in major European markets, including Germany -- the world's largest solar market -- Italy and France, as governments pare back spending to support renewable energy systems.

Chinese solar companies, including LDK Solar Co Ltd, Canadian Solar Inc and JA Solar Holdings Co have all sounded a bullish note on demand.

Surging demand has also boosted prices of solar stocks. ReneSola shares, which have nearly quadrupled from a November 2009 year low in both New York and London, was about 8 percent in both the bourses.

The WilderHill Clean Energy index, whose components include SunPower, First Solar and Suntech Power Holdings, rose 8 percent in July-September.

ReneSola said shipments for the fourth quarter would come in at 310-330 megawatt (MW), compared with 202.9 MW last year and third-quarter shipments of 324.9 MW.

Gross margin for the latest third quarter was 32.5 percent, up ten-fold from a year ago, and compared with 30.2 percent in the second quarter.


To cash in on growing demand, companies around the globe, particularly in China, are quickly adding factories to increase production capacity of cells and modules.

The company said it would spend $150 million in 2011 to expand wafer production capacity to 1.8 gigawatt (GW) from the current 1.2 GW, and module production capacity to 600 MW from 375 MW currently.

It expects solar wafer and module shipments of 1.6-1.7 GW in 2011, up 42-48 percent from estimated 2010 levels.

ReneSola said it was working on increasing its polysilicon production capacity, to insure itself from price spikes in the key solar industry raw material.

Prices of polysilicon, the key cost in solar modules, have risen to above $70 per kilogram (kg) on the spot market in recent weeks after falling near $40/kg in the second quarter.

The industry had been squeezed by a shortage of the material two years ago, which drove prices above $400/kg.

ReneSola produced 269 metric tonnes (MT) of polysilicon in the third quarter, up 66 percent from the second quarter. It expects to produce 500-600 MT of polysilicon during the fourth quarter at $45 per kilogram by quarter-end.

The company expects production to rise to 3,000-3,500 MT, with production cost below $35/kg, by the end of the first half of next year.

(Editing by Prem Udayabhanu)

© Thomson Reuters 2010 All rights reserved

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