Chinese Solar Keeps Making Moves

Solar power is at it again, with money flowing into China’s two biggest solar manufacturers, Suntech Power (NYSE:STP) and LDK Solar (NYSE:LDK).

News has been good for China’s big solar manufacturers over the past month. Both companies saw their stocks jump in late 2012 after Warren Buffett invested in solar with a $2 billion-plus purchase of the 579-megawatt Antelope Valley Solar Projects from SunPower Corp. (NASDAQ:SPWR) via MidAmerican Energy Holdings, a holding company controlled by Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB).

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LDK and Suntech also appeared to have front row seats to China’s ever-growing demand for solar power. China’s State Council counselor and Chinese Renewable Energy Society president Shi Dinghuan said China would increase its 2015 solar energy supply goals from 21 gigawatts to 35 gigawatts. Recent bouts with smog were cited as the reason for the increase.

In addition to ramping up the solar goal, the Chinese government will be continuing subsidies for solar projects…


China’s second largest wafer manufacturer may soon be receiving a 440 million-yuan loan to upgrade its Mahong polysilicon plant. The improvements to the plant and technological investments are intended to drive down the cost of production — lower costs are especially crucial as excess supply of raw material for solar panels has recently diminished average spot price by 43 percent over the past year.

The money LDK will receive is coming from China Development Bank Corp. on top of as much as 60 billion yuan the bank extended to LDK in 2010 in a 5-year credit facility.

LDK’s shares opened lower than the previous close, but have since leaped up Thursday afternoon to more than 7 percent above the previous close…


The world’s largest solar manufacturer was also seeing positive stock performance Thursday afternoon. Shares rose to as much as $1.54, compared to the previous close of $1.47, though they settled back down toward $1.51.

Suntech may receive more business in the future as it could be relied upon by China to meet the demands for Solar, and recently its panels were used by Saudi Arabia to help the country build its biggest ground-mounted photovoltaic plant yet. Saudi Arabia is also looking to continue expanding its use of solar power, with hopes to get a third of its power, or 41 gigawatts, from solar by 2032.

Between China and Saudi Arabia alone there is a demand for 76 gigawatts of solar power, and Suntech and LDK may see a good share of that business coming their way for years to come.

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