ETAPA I ANÁLISIS TERRITORIAL

The company Suntech Power Ltd. is currently the unrivaled market leader in China. Suntech Power was founded in May 2002 and by March 2008 it had become the third largest player in the global solar industry. As of end 2009 it was about to surpass Q-Cells of Germany in terms of volume, and is steadily gaining ground on the world's largest, Arizona's First Solar (Queenie et al., 2009). In 2010, Suntech became the largest PV module maker in the world among silicon or thin-film technologies, with respect to shipments. The PV module shipments of Suntech in 2010 were around 1.5 GW.⁴¹

Suntech started off with the design and manufacture of intelligent controller PV systems in 2003 and received certification from the International Energy Commission which opened entry to then lucrative export markets in Europe and the USA. To generate the capital it needed to grow further, Suntech floated on the New York Stock Exchange in December 2005. With the capital, Suntech made investments in technology development and opened new production facilities in China, and acquired national competitor companies to build Suntech‘s technical expertise.

By the end of 2008 Suntech had reached manufacturing capacity of 1 GW, and 50 MW of thin film solar cell production capacity in 2009. It is expected that Suntech will reach production capacity of 2 GW in 2010 (Osborne 2008). Suntech has achieved technological leapfrogging in

40 Personal communication with Chris Lin, Manager of Tianwei Ltd, Beijing, between May 2009 and September 2010 and Rocky Cao, Sunosis Energy Ltd, Beijing, June 2008 and October 2009.

41 PVinsights announces worldwide 2010 top 10 ranking of PV module makers.

terms of production capacity and at the time of writing is the world's leading solar energy company as measured by production output of crystalline silicon solar modules. Suntech has a clear business goal, to be the world‘s lowest-cost solar producer. This has so far not only driven the company‘s growth, but also the continuing increase in solar electric applications around the world. However, to become a global leader in low-cost production will not be sufficient for long-term success; continued innovation and quality improvements will be needed. In addition to price competitiveness, conversion efficiency of Suntech products will be a key parameter in defining whether the company can leapfrog in terms of product innovation. Suntech therefore is putting efforts into developing solar panels that are increasingly efficient. Its current line of products has a conversion efficiency of up to 19%, which is a significant improvement on its early products with 14% efficiency.

In terms of innovative capacity, Suntech's founder and CEO Shi Zhengrong, a PhD graduate in electrical engineering of the University of New South Wales in Sydney, acquired knowledge and experience at the Australian company Pacific Solar where he developed new technologies that dramatically reduced the cost to produce solar energy by significantly reducing the amount of silicon needed in solar cells. After six years at Pacific Solar developing thin film technology, he became one of the inventors on the key patents for this technology. He brought several patents with him back to China and started his company. Advanced know-how and technology was one of the ingredients for successful business development.

Suntech has also developed its own 'Pluto technology' for crystalline silicon solar cells, which is advertised to improve power output by up to 12 percent compared to conventional production methods. At the time of writing, Suntech was awaiting receipt of the patent and licensing rights for the technology. According to the company‘s website, ongoing improvements of Pluto technology will achieve 20 percent conversion efficiency on monocrystalline PV cells and 18 percent on polycrystalline PV cells within the next two years. One of Suntech‘s latest product innovations targeting utility-scale, ground-mounted solar farm project developers, is its new

Suntech Reliathon package. For these Reliathon solar panels Suntech provides a 12-year workmanship warranty instead of the standard five years, and a 25-year performance warranty that guarantees a minimum power output for each year of the 25-year period (Wang, 2009).

These warranties can be seen as signs of improving quality and confidence in product performance. That the company is beginning to take responsibility for its products and customers is a development moving towards extended producer responsibility which will become relevant in the next decades for setting up recycling schemes for solar PV products which have reached their end of life stage.

Suntech is not only improving its products, but also improving production processes. With the recent acquisition of KSL-Kuttler, a German company specializing in equipment automation in the printed circuit board industry, Suntech has been able to accelerate innovation in this area, aiming for significantly greater automation in PV cell and module production lines over the next years. Suntech's R&D division is increasing conversion efficiency while simultaneously lowering manufacturing costs in China. These are preconditions for making moves to expand production and sales in overseas markets. The plan for 2010 was to set up its first U.S. factory in the area of greater Phoenix, Arizona, central to the US solar market. The plant will have an initial production capacity of 30 MW and is expected to begin production in the third quarter of 2010 (Renewable Energy Focus 2009). In this respect the solar PV companies are moving ahead of their counterparts in the wind energy sector. If Suntech successfully establishes itself in the North American market, it would be a strong indication of that the company and technology are reaching high levels of sophistication.

In terms of international competitiveness, Chinese solar PV manufacturers are ahead of their wind energy peers. Cost competitiveness is their most important advantage as Chinese manufacturers undercut their European peers' prices between 30 and 40 percent (Kovalyova, Bryan and Dinkloh 2010). The main reason for this significantly lower cost is that Chinese manufacturers have the advantage over overseas companies in that they buy polysilicon, the key

material to make solar cells, from local manufacturers with lower electricity and labour costs, and transport costs are minimal. However, the push for low-cost polysilicon production in China has resulted in new types of environmental pollution. In this respect the Chinese solar PV industry is not different from other Chinese export-focused industries, focusing on fast returns on investment, rather than long-term sustainability of the industry.