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Yesterday I saw an interview with Dr. Zhengrong Shih, CEO of SunTech Power Holdings, a very fast growing manufacturer of solar panels.  (Compare their stock "STP" price to traditional energy companies over the last 3 months.  Here's a chart that does it.  XLE is a traditional energy ETF with Exxon, etc.  AAPL and ISRG are in there to represent traditional hi-tech companies.)

Shih, Chinese but a citizen of Australia where he got his PhD, started his company near Singapore because they were more friendly to helping him start up - Australians just wanted to make money off him while he wants to help the world.

To isolate his company from rising raw silicon prices Shih signed very long term supply contracts.

He works out imaginative financing deals like this: a bank loans the money to buy a bunch of solar panels.  5,000 panels are installed on the roof of HP's office in San Diego.  HP pays back the bank, and the bank pays SunTech. Installation is included in the price.   Apparently the monthly cost to HP is attractive, plus being green.

SunTech currently manufactures 420 megawatts of production capacity per year.  And they don't use expensive industrial machines to assemble the panels - it is done by several thousand people, by hand.

by NHlib on Mon Dec 3rd, 2007 at 04:41:36 PM EST
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