Suntech Power (NYSE:STP) ousted its biggest competitor in the
), to become the largest supplier of photovoltaic (PV) modules in
the world last year. The company shipped 1,522 megawatt (
) of PV modules in 2010, comfortably ahead of the 1,411 MW First
Solar shipped across the globe. And these shipment figures are only
expected to shoot up over the coming years. Here we take a look at
the imminent boost in Suntech's module shipments. Suntech
Power is China's largest U.S.-listed solar player by market
capitalization and competes with other solar industry giants
like LDK Solar (NYSE:LDK), SunPower (NYSE:SPWRA), and
Yingli Green Energy (NYSE:YGE).
We maintain a $10.68 price estimate for
, suggesting a premium to the current market price.
Suntech has significantly grown its PV shipment
Suntech produces PV modules with capacities ranging from 2 to
290 watts, with higher output modules under development. These PV
modules can be applied to homes, apartments, military compounds,
farms and even different forms of transportation.
The total energy capacity of the modules sold by the company
increased from 358 MW in 2007 to 1,522 MW in 2010. This growth has
been a result of the various benefits and subsidies provided
by governments for solar energy adoption combined with a reduction
in solar component prices due to lower input costs. Both these
factors have driven demand for solar modules, driving sales
… and there are bigger factors in favor of growth in the
In the years to come, demand for solar components is expected to
continue to be driven by reducing average selling prices (
) of these components due to the combined effects of government
subsidies and competitive pressures.
Government incentives aimed at environmental targets are
expected to continue to be the biggest drivers for the solar energy
demand, with research efforts also expected to help the solar
sector to compete directly with fossil fuels in terms of per watt
Suntech has also spread its production to the U.S. to be able to
cater to local demands more efficiently. Also, the Pluto cell,
the firm's highest efficiency technology, is gaining popularity,
and with mass production expected to start this year, this should
also boost the company's shipment sales.
See our full analysis for Suntech Power stock