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Trina Solar Ltd
First Solar Inc
NextEra Energy Inc
Trina Solar Ltd. (TSL), the solar-panel maker that reported a fourth quarterly loss last month, is seeking partners to diversify as a global glut of panels and slowing demand in Europe spur a shakeup of the industry.
“We’re actively looking for targets,” Chief Executive Officer Jifan Gao said in an interview in Tianjin, China. “Companies like Siemens may be a rival, but I also see them as partners for cooperation.”
Demand for panels has weakened as Chinese producers flood the market, economies stagnate and governments curb subsidies for renewable energy. The oversupply has dragged down prices, contributing to losses for Trina and triggering a move into power-plant development, a strategy implemented by competitors including First Solar Inc. (FSLR), the largest U.S. solar company.
“Trina is facing widespread impact from the global economic slowdown,” Gao said. “Current leading companies may not remain so in the future. By 2015 or 2020, if these companies want to continue to maintain their positions, they’ll need to change their business models.”
Last month, Changzhou, China-based Trina said it will develop power projects to boost revenue after posting a second- quarter net loss of $92.1 million. The company is focusing on moving to other parts of the supply chain, such as solar power generation units, electricity distribution and energy storage systems, Gao said.
That may help Trina withstand the slump in panel prices, which has already tipped more than a dozen companies into bankruptcy and ignited trade tensions between the U.S., China and the European Union, with each side saying their rivals are unfairly supported.
“This industry needs a reshuffling of cards,” Gao said. “The industry may need two to three years to complete a process of reshuffling, restructuring and consolidation.”
Chinese solar manufacturers face an EU probe into whether they’ve sold products in the 27-nation bloc below cost, a practice known as dumping. The inquiry covers 21 billion euros ($27 billion) of imports of crystalline silicon photovoltaic modules or panels, as well as cells and wafers.
“I believe the two sides can cooperate and settle the anti-dumping case,” Gao said. “The pressure now is coming from the uncertainty of the verdict.”
Trina’s American depositary receipts rose 2 percent to $4.10 in New York yesterday, trimming their decline this year to 39 percent. One ADR is equivalent to 50 ordinary shares.
Shares in Wuxi, China-based Suntech Power Holdings Co., the world’s biggest solar manufacturer, have tumbled 66 percent since Jan. 1 in New York.
Trina’s sales extend from China to Germany, Spain and the U.S. In August, the company reduced its forecast for 2012 shipments by as much as 17 percent as its inventories and short- term debt both doubled.
The company expects to ship 1.75 gigawatts to 1.8 gigawatts in photovoltaic panels this year, compared with a May forecast of 2 gigawatts to 2.1 gigawatts. Second-quarter shipments were 419 megawatts, in line with its estimates.
Trina’s move toward power-plant development follows the example of Tempe, Arizona-based First Solar, which has chosen to sell power stations to the likes of Warren Buffett and NextEra Energy Inc. (NEE), instead of competing with China on panel sales.
To contact the reporter on this story: Chua Baizhen in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Reed Landberg at email@example.com