Suntech starts building Shanghai thin film plant

Suntech Power Holdings (NYSE: STP), one of the world's leading manufacturers of photovoltaic (PV) cells and modules, has begun construction on a thin film R&D and manufacturing facility in Caohejing Hi-tech Park in Shanghai, China.

The plant is expected to begin operation in 2008, reaching 50MW of thin film solar cell production capacity in 2009.

Suntech's thin film module production will be based on technology that deposits amorphous and micro-crystalline silicon thin film on a glass substrate. The product is to use less than 2% of the silicon required to manufacture equivalent crystalline silicon PV products.

Suntech projects its thin film modules will have a solar conversion efficiency of 6% to 9% and an initial production cost of approximately $1.20 per watt (based on 6% solar conversion efficiency), which is forecasted to continue to decline as both production scale and conversion efficiencies increase. The thin film modules will be nearly 6 square meters in size, which would make the balance of system installation costs of Suntech's thin film solution lower than other PV solutions.

Applied Materials is working on a new generation of solar manufacturing equipment that applies thin film material to glass substrates and produces similarly-sized panels (see Solar startup Sunfilm to make thin film sandwiches.) Neither company has acknowledged a relationship with the other at this point.

"After having acquired MSK, one of the industry leaders in the building integrated photovoltaic products (BIPV) space, we were very pleased to see that there is both a strong and long term global sales market for these products. We plan to combine our thin film product with MSK's BIPV product thereby capturing a greater portion of the PV value chain in a higher margin, higher ASP and higher value added product segment," said Dr. Zhengrong Shi Suntech's Chairman and CEO.

"We have significant thin film expertise among our senior management and R&D team. In fact, a majority of our executive officers, including myself, have had long and substantive experience in thin film product research and development."

Dr. Shi was a senior research scientist and the leader of the Thin Film Solar Cells Research Group in the Centre of Excellence for Photovoltaic Engineering at the University of New South Wales in Australia and holds multiple patents in thin film technology.

Prior to founding Suntech, Dr. Shi and various of Suntech's key officers and researchers were employed at an Australian PV company engaged in the commercialization of next-generation crystalline silicon thin film technology.

While BIPV is currently a relatively small segment of the overall solar market, it is one the company expects will grow rapidly in the coming years.

Suntech, a dominant supplier of conventional photovoltaic materials, is already an established global leader in the building integrated photovoltaic (BIPV) products space through its 2006 acquisition of Japan's MSK Corporation.