Solar energy giant Suntech said it would invest up to US$20 million over the next two years in research and development to explore new technologies, as the Chinese market booms.
Suntech, the world's biggest solar energy company by market value, has budgeted US$10 million to increase conversion efficiency this year and next year, said the company chief executive officer Shi Zhengrong.
The investment will be used to develop new technology solutions to increase the amount of electricity produced from each unit of solar energy.
"Technology upgrading is the main drive behind our growth," said Zhang Yi, Suntech's chief financial officer.
Based in East China's Jiangsu Province, the company specializes in making photovoltaic cells and modules used to convert solar energy to electricity. It made its listing debut in New York on December 14, issuing 26.4 million American depositary shares at US$15 each.
On the first day of trading, Suntech shares shot up 41 per cent to US$21.2, putting Shi on China's billionaire list.
At Sunday's news conference, Shi said he planned to supply half of its solar energy products to China within five years, although the current market share contributed by its home turf is only 20 per cent. Suntech now supplies 80 per cent of its products to foreign countries like Germany and Spain.
"The Chinese market is burgeoning, as the government incentive is to take effect," Shi said.
From the start of this year, China has enacted its first law on promoting the use of renewable energy sources such as wind, solar and biomass.
Xu Dingming, director of the energy bureau under the National Development and Reform Commission, told China Daily that the 12 supporting regulations of the new law would come out within this month.
The law will include many preferential policies to encourage the renewable energies, including higher tariffs for renewable energy-generated power, tax rebates and government subsidies, Xu said.
Shi also vowed to increase the company's production capacity by almost 10-fold in the next five years to reach 1,000 MW (megawatts), after recording an annual growth rate of at least 100 per cent since its establishment five years ago. Suntech's production capacity will reach 240 MW in the first half of this year, from last year's 120 MW.
Meanwhile, the company's annual sales are expected to top 50 billion yuan (US$6.2 billion) by 2010, Shi said.
"The reason for our robust business growth is cutting-edge technology," said Shi, who set up Suntech in 2001 after spending more than 10 years of study and research in the solar energy industry in Australia.
Two years ago, Suntech converted solar energy into electricity at a 15 per cent efficiency rate, and its growth margin was 19 per cent.
But as the company's efficiency rate increased to 16.5 per cent due to technology improvement in September last year, growth margin jumped accordingly to 33 per cent,
Source: China Daily