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Global solar panel manufacturer, Suntech Power Holdings Co., Limited announced that it will deliver 100 megawatts (MW) of solar panels for the two planned projects in South Africa undertaken by a syndicate steered by Mainstream Renewable Power.  

The solar plants are the first projects to get licenses under South Africa’s ambitious Renewable Energy Independent Power Producer Programme (“REIPP”). The plants will be developed at two individual sites in the Northern Cape of South Africa. Munich-based electronics and engineering conglomerate, Siemens AG will overlook the design and construction aspects of the dual solar program. The plants are anticipated to come online by mid-2014.

The REIPP program plans to install around 1.45 Gigawatt ("GW") and 8.2 GW of solar plants by late 2014 and 2030, respectively. The current project will employ Suntech’s V series module which goes well with utility-scale power plants. In addition, the solar systems will generate production capacity of 180 gigawatt-hours which will adequately power roughly 15,000 homes. The eco-friendly programs are expected to displace about 180,000 tons of carbon emissions per year.

Suntech’s aim at expanding its business footprint overseas and converting its existing domestic manufacturing bases into cost-effective units will certainly lend constancy to its earnings, going forward.

Suntech has been supplying its proprietary solar panels to customers round the world. Lately the company supplied solar panels for a 44-MW, collaborative solar plant in Bangkok to Bangchak Public Petroleum Co. Ltd. The company also won a contract from Portugal’s EDP Renovaveis for the supply of 39 MW of polycrystalline solar panels.   

These high-quality programs will strengthen its presence in the global solar market. However, tariff headwinds and anti-subsidy tariffs of 2.9% to 4.73% imposed in March 2012 by the U.S. government will constrict its opportunities to tap the growing renewable U.S. market. The company currently retains a short-term Zacks #3 Rank (Hold rating).

Another Zacks #3 Ranked solar player, FirstSolar Inc. (FSLR - Analyst Report) is also strengthening its position worldwide with back-to-back contract wins for the supply of solar modules to Kiran Energy Solar Power Pvt. Ltd. and Mahindra Solar One Pvt. Ltd., both based out of India. FirstSolar is also engaged in the building of a 13-MW solar photovoltaic (“PV”) power plant in Seih Al Dahal in Dubai.

For Suntech, the Zacks Consensus Estimates for the fourth quarter and full year 2012 are currently pegged at a loss of 44 cents and $2.33 per share, respectively. The cascading prices of PV modules, across the industry, owing to a supply glut will take its toll on the company’s margins.

With a market capitalization of $157.44 million, the Wuxi, China-based solar company has 17,693 total employees.

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