LOS ANGELES - Chinese solar panel maker Suntech Power Holdings Co Ltd said on Wednesday it will begin shipping a new solar system for large-sized projects next year, betting that the U.S. solar utility market will heat up.
The new platform is cheaper and easier to set up, it said. It requires less work and fewer bolts and wiring for installation in the field, shaving up to 10 percent on total cost, Suntech said.
Prices for solar panels have tumbled about 50 percent since the end of 2008, but installation costs can make up as much as half of the total price for large solar systems.
We've all been aggressively focused on reducing costs. But for the solar companies, a lot of that comes from inside the frame of the module, Andrew Beebe, Suntech's vice president of global product strategy, said in an interview. We realized... you could build a very different kind of platform for one specific customer.
The executive declined to say how much Suntech invested in the product, which it developed over nine months in Wuxi, China, and San Francisco, California.
The new platform, called Reliathon, can be used for systems of 10 megawatts or larger and will be ready for orders and shipping in the second quarter of 2010. Beebe said it has already been part of bids for over 500 megawatts of projects.
Suntech expects to sell 50 percent of its panels to the utility-scale solar market by 2011, when the U.S. solar utility market is expected to reach 1.2 GW, taking into account previously announced projects.
We expect that this market segment is going to provide a material portion of our revenue, Beebe said.
With the new platform, Beebe said the company gained the most savings from using the panel's design to lower material and labor costs in the field.
To help achieve the 10 percent cut in the total system cost, Suntech secured special pricing from its partners, including Siemens (SIEGn.DE), Advanced Energy, Array Technologies, Satcon and SMA.
Suntech said that the panels make up about half the cost of the total system and that the design changes boost the cost of the panels about 5 to 7 percent. However, savings on labor and materials in the field -- the other half of the overall cost -- more than recoup that increase and added up, can save up to 10 percent on the total system cost.
The company expects its gross margins on panels for the new system will be roughly the same as its other panels, about 19 percent, Beebe said. (Reporting by Laura Isensee; Editing by Lincoln Feast and Deepak Kannan)