SunPower Corp. (SPWR:US), the second-biggest U.S. solar manufacturer, expects to sell about 300 megawatts of systems this year from a factory in China that may eventually serve as an export hub.
The factory is producing components at an annual run-rate of 50 megawatts and will eventually have 300 megawatts of capacity, according to Chief Executive Officer Tom Werner.
SunPower is seeking a foothold in the world’s largest solar market, where demand for utility-scale projects is surging, Werner said. About two-thirds of all generating capacity installed over the next 10 years will be in China.
“It’s just the beginning of utility scale in China,” Werner said in an interview yesterday at Bloomberg’s headquarters in New York. “If you want to be a big solar-electricity generator, it’s hard to do it without being in China.”
About 19 percent of SunPower’s sales (SPWR:US) in the fourth quarter came from utility-scale power plants, and the rest from residential and commercial projects.
SunPower will be competing for a “multiple-gigawatt” slice of the Chinese market, which may reach 15 gigawatts a year, Werner said. The company’s plant in Inner Mongolia produces components for its C7 Tracker systems. He expects to springboard from there into other countries.
“Yes, we want to export to other markets,” Werner said. “If you compete there and create a supply chain, it can become a platform.”
The factory is part of a joint venture with Tianjin Zhonghuan Semiconductor Co., Inner Mongolia Power Group Co. and Hohhot Jinqiao City Development Co. SunPower said March 25 it had sold more than 70 megawatts of cell packages to Huaxia Concentrated Photovoltaic Power Co. for two projects in Inner Mongolia, an area almost twice the size of Texas.
“The upside potential in Inner Mongolia, just in that province, is a number that’s almost as big as what we’ve done the last few years in America,” Werner said.
The deals in China “are a major milestone,” Rob Stone, an analyst at Cowen & Co., wrote today in a note to investors. “SunPower’s development experience should help grow the business throughout China” and is likely to be followed by exports.
Stone rates the shares the equivalent of a buy with a 12-month price target of $40. SunPower gained 0.2 percent to $31.73 at 2:33 p.m. in New York.
First Solar Inc. is the largest U.S. solar manufacturer.
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