The Swedish solar energy company SolTech Energy forms a mutually owned company with the Chinese company Advanced Solar Power. Through long term customer contracts on roof top based PV installations, they will be part of achieving the Chinese government’s aggressive solar energy goals.
In the wake of China’s rapid economic development are major environmental challenges. To overcome the problems, the Chinese government is investing in solar energy – a source of energy that according to IEA, the International Energy Agency, is expected to be the world’s largest by 2050 when it comes to electrical energy. Last year 10 GW was installed in China, representing 20 % of the total installed base in the world the same year. Now, the Chinese government has set a target of 200 GW installed solar capacity by 2020. With a research background from KTH, the Swedish company SolTech that develops and sells solar energy systems, will now enter the Chinese solar energy market. With a mutually owned company, SolTech (51%) and ASP (49%) that will install, own and service roof top based PV installations on customer’s roof tops in the Chinese city Hangzhou, also the hometown of the e-commerce giant Alibaba.
China is the world´s largest solar energy market today, and it has completely different conditions for doing business that the Swedish one. The environmental challenges have driven the government to set up goals for the solar capacity and to act forcefully to reach deals with different stakeholders. Together with a local company, we are now becoming a part of this. The business potential is huge and it also feels great to be a part of the solution to China’s enormous environmental challenges, says Frederic Telander, CEO SolTech Energy.
Two test installations equaling 454 KW have been installed on two customer’s respective roof tops, having an annual yield (ROI) of some 20 % plus per year. For 2015 the goal is to install and operate a capacity of 5 MW, totaling 450 MW by the end of 2019. The customers will under long term contract, commit to buy all produced electricity from such installations, at a discount compared to market price. The mutually owned company will at the same time receive subsidies from the government, per produced kWh.
The agreement with SolTech makes our product offering to the market complete, and we are well positioned for expansion. The interests from local companies are very good, and we are at present in negotiation with several large potential customers, that more than satisfies our 2015 target, says Ben Wu, CEO ASP.
SolTech will through the agreement with ASP get access to a very expansive and large market with a well proven business model, practiced by both First Solar and Solar City in the US, says Frederic Telander.
- For 2015, the Chinese target is to install 14 GW, of which 8 GW are destined for roof tops, respectively generating some 15, 4 and 8, 8 GWh of electricity per year.
- 1 GWh is enough to cover the energy need in a medium large Swedish city with 100 000 inhabitants for 8 hours.