Q-Cells AG, Germany's largest solar company, is relying on new plants in Mexico and Malaysia to cut costs and boost output amid soaring demand for renewable energy, Chief Financial Officer Hartmut Schuening said.
The company, based in Thalheim, Germany, expects the facilities to speed up delivery times for products such as thin- film modules to Asian and North American clients, Schuening told Bloomberg Television at an award ceremony in Frankfurt last night. The resulting cost cuts should improve profitability in established and new markets alike, he said.
Q-Cells made 70 percent of its sales outside Germany in the first quarter this year as demand grew in countries like India and South Korea. The new plants will allow the company to ramp up local production as demand from such places from continues to rise, according to Schuening.
“Experts see the market growing at 50 percent per annum over the next few years, we aim to keep up with that,'' the CFO said at the event organized by Germany's Capital magazine. The new plants will also “deliver the high margins we need to get away from Germany's renewable energy law and perform in unsubsidized markets.''
Lawmakers in Germany, the world's largest market for solar power generating equipment, voted June 6 to accelerate cuts to subsidized prices for energy generated using sunlight.
Subsidized prices for solar energy will decline between 8 percent and 10 percent annually over the next three years for equipment generating less than 1 megawatt of electricity, or supplies for fewer than 2,000 European homes.
The company's Malaysian facility will begin production in the first quarter of next year, Schuening said, declining to specifiy when the Mexican plant would start making solar cells.
Q-Cells wants to begin operations in countries with a high level of sunshine and no subsidies by 2011, Schuening said without naming locations.
That means the company will need to be able to operate at what is known as grid parity, the ability to generate power at the same prices as other producers, when it enters these markets, he said.
