China has often been seen as a spoiler in the global solar power industry, distorting the market with government subsidies that have led to trade spats with U.S. authorities looking to preserve the industry here.
But in the case of Norcross-based Suniva Inc., engagement with China is helping create American jobs instead of displacing them.
Suniva on Wednesday announced plans to invest $96 million to create 500 new manufacturing jobs in Georgia, effectively tripling its solar cell capacity and eventually more than doubling its overall headcount of nearly 400 employees in factories in Norcross (about 230) and Saginaw, Mich.
That wouldn’t have been possible without a recent infusion of cash from its new controlling shareholder, Shunfeng International Clean Energy Ltd., a Hong Kong-listed but mainland-based firm that said in August it would purchase a 63 percent stake in the Georgia-grown solar manufacturer for $57.8 million.
Matt Card, vice president of global sales and marketing for Suniva, told Global Atlanta the investment is an example of exactly what he believes U.S. trade policy seeks to achieve: leveling the playing field in a way that leads to industry collaboration.
“You could say that finally industry has taken it upon itself to solve what has been a very contentious problem the correct way. I think this is the model for how companies and nations should interact,” he said. “You have a large Asian investor making a significant investment in a U.S. company that will grow U.S. jobs to build product that is consumed in the U.S. That I think is the free market working.”
Because most of the contention is over the sales of Chinese-made panels in the U.S., Shunfeng was interested in Suniva precisely because of its ability to serve the domestic market.
“The synergy was great. It was a market that they wanted to have as part of their portfolio, and we’re a strong player here,” Mr. Card said. “It gives us access to capital and other resources that enable our growth.”
Shunfeng joins a team of investors in Suniva that also includes the likes of Goldman Sachs, HIG Ventures, New Enterprise Associates and Prelude Ventures; but the Chinese firm is more than a financial partner; it’s fortified with industry knowledge as a global clean energy conglomerate with assets in Asia, Europe and the U.S., Mr. Card said.
“When you look at the addition to Shunfeng in addition to the other investors we have had, this is one of the most financially strong investment teams, ownership teams, in the clean energy space. It’s multibillion-dollar assets across the board,” he said.
He said it’s too early to say whether Suniva’s technology would be deployed back in China, where Shunfeng recently purchased the distressed assets of Suntech Power, once considered the largest solar panel manufacturer in the world. Many firms have shied away from China over intellectual property concerns. Suniva says it has created proprietary solar cells that convert heat from sunlight into electricity at what it calls record rates.
For the moment, Suniva will operate mainly as an independent company, and though the new partners would be “foolish” not to look for efficiencies down the road, Shunfeng’s “history is to take assets and build stronger standalone assets” under the Asia Pacific Resources Development umbrella, Mr. Card said.
“The plan right now, the attraction right now was, ‘Suniva is a strong U.S. player. How do we make Suniva an even more viable or stronger U.S. player?’”
Some have criticized U.S. tariffs on Chinese-made panels as holding the industry back by allowing American and European incumbents to keep prices artificially high. But Mr. Card believes a recent rash of bankruptcies among Chinese firms participated in a government-backed race to the bottom in panel prices provides that cheapest isn’t always best.
“The old adage, ‘You don’t get something for nothing’ is absolutely true,” he said. “Many companies that are in China that are on the edge of bankruptcy, and as Chinese government support pulls back away, they get in trouble.”
Let them into the U.S. too early or easily, Mr. Card says, and manufacturers that invest in technology to drive the industry forward might’ve been priced out of the market. And some say the lower-cost panels weren’t needed: By some estimates, grid parity — the cost at which a kilowatt hour of solar power matches that produced by traditional sources — has already been reached in many states.
Suniva has directly benefited from the U.S. government’s move toward solar products made in the U.S., as longstanding “Buy American” procurement requirements have made its products competitive in military deals and other government contracts: Suniva even has one installation on the U.S. base in Guantanamo Bay, Cuba.
The company is also addressing some markets overseas where “distributed generation” — rooftop systems for homes or businesses — is strong, or where expensive land encourages investment in higher-efficiency panels. The Caribbean is one market of interest, and the company has some sales in Canada and Mexico.
Still, exports account for less than 10 percent of sales, a significant shift from early in the seven-year-old company’s history, when it was a darling of the Export-Import Bank of the United States.