LDK Solar Bonds Sink in the Secondary Market

LDK Solar’s $182 mln synthetic offshore renminbi bond has struggled in secondary market trading this week. This is the first Chinese company outside the property sector to issue a renminbi-denominated US dollar-settled bond.

LDK Solar is also the first solar power company in Asia to issue a high-yield bond. The three-year deal was priced on Friday night (Hong Kong time) amid weak credit markets. Citi and Morgan Stanley were joint bookrunners.

The LDK Solar bonds, which were issued at par, initially fell three points to 97 on Monday and have touched a low of 96. According to one of the leads, they had recovered to 98/98.25 by yesterday morning.

The deal has drawn fierce criticism from rivals who suggest that the leads did not do enough ground work to find the right price for the deal prior to launch. LDK Solar, a Chinese solar wafer maker, is unrated and this is its debut bond.

“The bonds priced wide of initial whispers. And investors got their full fill of orders so the bonds didn’t have a chance of performing in the secondary [market],” said one rival banker.

The deal raised less than the Rmb1.5 billion that was expected, although at the final size of Rmb1.2 billion, it was more than one time covered. According to a banker on the deal, a yield of 9% was talked about during initial price discussions with investors, and the final guidance was in the 10% area. The bonds priced within that guidance, at a yield of 10%, he said.

This is disputed by others and arguably there was a fair bit of noise surrounding the deal. One rival banker said that the price whisper was 7.5% to 8% and that the initial price guidance was 9%, while another said that the price whisper was 8.5% to 9%. A price whisper is usually given to investors verbally, while an initial price guidance is sent to investors via email.

The bonds traded at a yield of about 11% yesterday morning.

JA Solar with 18.2% Conversion Efficiency Solar Cell

JA Solar says its new high-power multi-crystalline solar cell has shown a conversion efficiency of 18.2% in pilot tests.

The solar cell was developed by JA Solar's research and development team using a proprietary technology called Maple. The company says that Maple gives significantly enhanced power output from multi-crystalline solar cells. Maple cells feature silicon crystals that are broader, flatter and have fewer grain boundaries than traditional multi-crystalline silicon, resulting in reduced energy wastage and improved conversion efficiency.

Although Maple cells are closer to mono-crystalline solar cells in terms of conversion efficiency, they can be produced using lower-cost multi-crystalline silicon production techniques. According to JA Solar, Maple could potentially be used to produce a more advanced range of high-power solar modules at a low cost-to-performance ratio.

Maple cells have achieved 18.2% conversion efficiency in pilot production under large-volume manufacturing conditions, and the company intends to begin commercial production in the second half of 2011.

JA Solar is showcasing the new solar cell at the 2011 SNEC PV Power Expo in Shanghai, China, from 22-24 February.

Schmid Silicon Technology to Cooperate with Puxing Chengda on Xinjiang Polysilicon Factory

The German company Schmid Silicon Technology announced on 22 Tue 2011 that it has signed a contract with Xinjiang Puxing Chengda New Energy Technology to cooperate on a 3,000-ton polysilicon factory, as well as a strategic partnership agreement for an integrated solar cell and solar module factory. Xinjiang Puxing Chengda will invest 10 billion RMB to build a PV industrial park and a solar production base in three years.

Founded in November 2010, Puxing Chengda is located at Industrial Park of Wujiaqu City in Xinjiang, with a registered capital of 100 million RMB.

Schmid Silicon Technology is a leading technology provider for high-end solar manufacturing. They also sell electronic grade polysilicon and monosilane gas production as well as plant engineering (turnkey).

ZenithSolar sigsn MOU for Two Gansu 10 MW Solar Plants

ZenithSolar announced on 22 Feb 2011 that it has signed a MOU with the Energy Bureau of Gansu Provincial Development and Reform Commission for cooperating in the development of combined heat and power (CHP) solar stations in the Gansu. The MOU was signed at a ceremony in the provincial capital Lanzhou.

ZenithSolar will provide the technology for the installation of two 10 MW cogeneration plants based on ZenithSolar's Z20 CHP system. The agreement is focused on two planned facilities which will be in Jiayuguan and Jinchang. One of the installations will be used to provide electricity and process heat for an industrial plant and the other for a large neighborhood.

Under the terms of the MOU, the Energy Bureau of Gansu will recommend the use of ZenithSolar's CHP system for other locations in the Gansu Province after the successful operation of the two pilot plants. The Energy Bureau also announced that in concert with the introduction of the CHP technology a scientific research center will be established to provide training for government institutions, enterprises and individuals to focus on the development of new solar energy technology.

ZenithSolar is an Isreali company and I'm trying to learn more about how it contacted the Gansu Provincial government. Was the Beijing NDRC involved in bringing the two sides together? What exactly is the relationship between the central government NDRC and the provincial development and reform commissions?

Yingli Revenues Up on Record Shipments

Yingli Green Energy hit a gross margin of 32.9 per cent in the fourth quarter of 2010 as its quarterly PV module shipments hit a record high. The manufacturer’s revenues reached $616.1mln in the fourth quarter, 23 per cent above the third quarter, as its solar module shipments rose 21.6 per cent.

The fourth quarter results reflected strong full-year 2010 results, in which the company’s net income hit $215m, generating earnings per share of $1.37.

Its PV shipments for the full year were 102 per cent higher during the year than in 2009 at close to 1.06GW, exceeding its previous guidance of up to 1.04GW. Europe accounted for 80 per cent of Yingli’s global PV product sales in 2010, a proportion that the company is looking to change.

Yingli expects that diversified market exposure will increase its sales from other regions to 40 per cent this year. In 2010, the US accounted for ten per cent of its sales, which it expects to increase to up to 15 per cent this year.

Yingli’s gross profits for the full year 2010 reached $629.2m, representing a gross margin of 33.2 per cent that topped its 32.5 per cent upper guidance.

Its gross profits reached $202.7m in the fourth quarter, on an operating income of $142.9m, while its fourth quarter net income stood at $84m on earnings per share of $0.52.

GCL-Poly to Expand Polysilicon Capacity and Wafer Business

GCL-Poly Energy said it planned to invest about $2.28 billion to further expand its polysilicon capacity and wafer business.

In a filing with the Hong Kong bourse over the weekend, GCL said it would expand its polysilicon and wafer facilities in China in 2011 and 2012, aiming to increase annual polysilicon production capacity to about 25,000 tons by the end of 2011 and 65,000 tonnes by mid-2012, from 21,000 tons as of the end of last year.

It also aims to raise annual wafer production capacity to 6,500 MW by the end of 2011, from 3,500 MW at the end of 2010. GCL said the new investment would be funded by internal resources and borrowings.

Suntech Lands United Nations PV Contract

Xinhua reported on 16 Feb 11 Suntech announced it has just won the bidding for a $80 million PV system program from the United Nations. The company will team up with the Tianjin-based Peak International Trade to supply a solar energy generation system for the UN in the coming three years.

Suntech has developed a type of small-scale hybrid PV system which integrates diesel generators to ensure dependable power supply for environmentally-vulnerable areas. The hybrid PV system will mainly serve the UN's peacekeeping forces and their subordinate bodies.

China Sunergy Enters Supply Agreement with GCL-Poly

On 14 Feb 2011 PRNewswire reported China Sunergy announced today that it has entered into a long-term wafer supply agreement with GCL-Poly.

Under the terms of the agreement, GCL-Poly will supply China Sunergy with an aggregate of approximately 4,400 MW of wafers over six years. Delivery of wafers will commence in February 2011 for completion in December 2016. The agreement also contains a clause for a price adjustment mechanism based on wafer market price.

Plans for 1 GW PV Cell Production Line in A La Er, Xinjiang

Shangdong-based Shunyi Solar Power Co. Ltd., Xinjiang-based Talimu Agricultural Division One and Xinjiang-based Talimu Agriculture Development-- have agreed to jointly build a 1GW solar PV cell production line project in A La Er, Xinjiang, reports solar-pv.cn February 10.

Suntech, Yingli Selling Modules to Italy, California Solar Companies

Chinese PV companies have been in the news for new sales agreements. Reuters is reporting Suntech has announced it would supply 115 MW of panels to Italian company Enerpoint, which will install them mostly in Italy in 2011 and 2012. The companies have not disclosed the value of the deal.

This week Yingli's US subsidiary, Yingli Green Energy Americas, has signed a new module supply agreement with San Diego-based Borrego Solar Systems. Under the terms of the agreement, Yingli Americas is expected to supply 20 MW of modules to Borrego Solar in 2011. These modules are designated for commercial solar projects across the US.

Borrego Solar purchased 10 MW of Yingli Solar PV modules in 2010, which were used in several high-profile projects, including the San Diego Community College District (San Diego, CA, 2.8 MW), City of Ridgecrest (Ridgecrest, CA, 500 kW), and San Diego County Water Authority (San Diego, CA, 1.8 MW).

China Huadian Sets Up New Energy Unit

China Huadian is reportedly set to publicly list its new energy unit this year.

General manager Yun Gongmin told the China Daily local news service this week that it plans to speed up the initial public offering of its renewable resources department.

China Huadian won't be the first of China’s power majors that have spun off – or are looking to float – their renewable energy divisions. In December, China Datang Corp Renewable Power, the renewable energy unit of China Datang, was hampered by investor fears over market volatility. There have been rumors that Huadian was going to set up Huadian Renewables late last year but hasn't gone ahead with its planned offering due to unfavorable market conditions.

Sempra Generation to use Suntech panels for Arizona Solar Plant

Sempra Generation, the project development unit of Sempra Energy, will use Suntech panels for a 150 MW Arizona solar plant. The Mesquite Solar Complex will be built in Arlington, on former agricultural land near existing transmission lines.

Suntech will supply 800,000 multicrystalline silicon panels for the Mesquite Solar 1 project, the company said in a statement on 3 Feb 11.

Mesquite is “a big project for Sempra to try with a new technology provider,” Andrew Beebe, Suntech’s chief commercial officer, said in a Bloomberg interview on 3 Feb 11. “This shows that crystalline photovoltaics will be an extremely competitive option for large-scale solar.”

Suntech will supply “an important amount of panels” from its manufacturing plant in Goodyear, Arizona, Beebe said, “but not a majority.”

Beebe said the panels produced at the Goodyear factory have “a slightly higher cost” than the ones it makes in China, and that Suntech passes this cost on to customers.

He said Suntech expects to sell this year 500 MW of panels for projects in the US and Canada.

I previously wrote about Suntech saying on 31 Jan 11 that it is increasing production at the facility by adding a second shift, and it expects to reach by midyear full annual production capacity of 50 MW.

The Mesquite project is about 30 miles west of Suntech’s Goodyear factory. Zachry Holdings Inc., a San Antonio-based engineering, procurement and construction provider, will build it. Construction is set to start by mid-2011 and is expected to be complete in 2013, according to the statement.

Another First Solar, CGN SEDC MOU Singing

First Solar and China Guangdong Nuclear Solar Energy Development Co., Ltd. (CGN SEDC) have signed yet another memorandum of understanding (MOU) to collaborate on the development of Phase 1 of the Ordos PV plant. I don't see much difference between this MOU which was signed on 2 Feb 11 in Beijing and the one signed on 5 Jan 11.

Any written agreement is a good step forward. There are still many skeptics out there. I'm betting that this First Solar project will eventually provide grid-connected electricity but far behind schedule. I am basing this mostly on the lack of accompanying transmission infrastructure construction. I am also saying that the project will continue to be way behind schedule based on how poorly First Solar and Chinese counterparts have stuck to the timeline so far.

First Solar President Bruce Sohn and CGN SEDC President Han Qinghao signed the MOU at a ceremony in Beijing on 2 Feb 11. Under the terms of the MOU, First Solar and CGN SEDC will work together to execute the 30 MW AC first-phase demonstration project. CGN SEDC will be the majority project owner and operator, performing the engineering, procurement and construction (EPC) functions for the project. First Solar will supply its advanced thin-film solar PV modules to the project and will support CGN SEDC with EPC and O&M advisory services.

In previous interviews, Bruce Sohn has said the PV panels will come from their Malaysian manufacturing facility. With a new facility being planned for Vietnam, also expect to see modules headed for Ordos constructed there, too.

Suntech Boosting Production in Arizona

As Evergreen packs up and shifts manufacturing to Wuhan, Suntech is expanding its Arizona operation. This morning Bloomberg reported the company is boosting production at its solar panel factory in Goodyear, Arizona, adding a second shift and lifting employment to 78 from 40. Suntech said in a statement released 1 Feb 11, it will employ 150 people at the facility by the end of this year. It will run two eight hour shifts instead of one, producing panels with the capacity to produce 50 MW of power a year by the middle of 2011.

MIIT Announces New Solar Policy

China's Ministry of Industry and Information Technology (MIIT) has announced new policies for solar polysilicon plants in the country.

Under the new rules, factories must be capable of producing more than 3,000 metric tons of polysilicon annually and meet specific standards for efficiency, financing and environmental impact, Bloomberg reports on 26 Jan 11.

Existing plants must also comply with the rules, and those that do not are expected to be shut down by the end of the year.

Johnny Lau, an analyst at Hong Kong-based SW Kingsway Capital Holdings Ltd., told Bloomberg that the new policies are expected to benefit large polysilicon producers (e.g., GCL Poly) by driving out rival companies that are less energy-efficient. Industry consolidation is also predicted as a result of the rules.

MIIT, 工业和信息化部, is an odd government organ. It broke away from the NDRC in March 2008. It's officially responsible for "regulation and development of the postal service, internet, wireless, broadcasting, communications, production of electronic and information goods, software industry and the promotion of the national knowledge economy." Why it is releasing new polysilicon policy is a mystery to me. I will be researching the role MIIT plays in solar, renewable, energy policy.