Last week, Motley Fool Rule Breakers recommendation SunTech Power (NYSE: STP) reported both revenue and net income that nearly tripled from last year's third quarter. More exciting to me, however, is the possibility that the China-based supplier of solar-energy equipment might be a prime beneficiary -- along with Sharp and Kyocera (NYSE: KYO) -- of China's plans to build the world's largest solar power plant.
Chinese officials announced the plant yesterday, which will provide 100 megawatts of power at an expected cost of $766 million. For perspective, consider that the largest existing solar plant, in Germany, has a capacity of just 12 megawatts. The China project will clearly require a lot of solar cells and modules.
I was even more excited because this news followed on the heels of similar news from the Australian government, which announced in October that it, too, is planning a massive solar power plant project.
The news report I saw claimed that the Australian project will be a whopping 154 megawatts. Bragging rights aside, SunTech, as one of the world's leading manufacturers of photovoltaic cells and modules, is well-positioned to supply at least some of these cells and modules to both projects.
I base this assessment on the knowledge that SunTech, as a China-based manufacturer, is already making serious inroads in its home country. For instance, earlier this year it landed the high-visibility project of supplying the solar-energy system to Beijing's Bird's Nest Stadium, the main venue for the 2008 Olympics. Moreover, SunTech founder Dr. Zhengrong Shi, in addition to having strong relationships in China, lived in Australia for a long time and has ties to that country.
Of course, all of this is just speculation. The main thesis of my argument, however, got a strong dose of supporting evidence this morning, when SunTech Power announced that it had just entered into an extremely large contract to supply solar modules with an aggregate output of 23 megawatts to Atersa, a Spanish company that is developing a huge solar-power park in Spain.
This is a big deal, both literally and figuratively. And when coupled with China and Australia's big solar plans, it leads me to believe that the long-term forecast for SunTech is very sunny indeed.
Interested in other solar Foolishness?
SunTech Power is a
Motley Fool Rule Breakers
pick. Discover more exciting alternative energy picks with a free 30-day trial subscription.
Fool contributor Jack Uldrich
knows where the rain in Spain mainly falls but is less sure of where the sun ends up
. He owns stock in SunTech Power. The Fool has a strict disclosure policy.
Terms & Conditions
RSS Headlines
Fool UK