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How important is Spain for Trina Solar?

July 26th, 2008 · No Comments

oSpain has been the second biggest solar market in the world, but the generous incentives are starting to weigh on the budget, as the economy slumps because of a property crash and global economic problems. Important question, how important is the Spanish market to Trina?

We won’t provide a cliff hanger here but go straight to the chase. The answer is basically, important, but decreasingly so. First

http://www.reuters.com/article/environmentNews/idUSL2176096920080721?feedType=RSS&feedName=environmentNews

The Spanish solar industry is up in arms

  • The article contains details about the proposed cuts
  • Tariff rates for Spanish projects between 100kW and 10MW stand at EUR 0.42 (USD 0.66)/kWh – higher than those in feed-in tariff pioneer Germany, where new legislation provides EUR 0.396/kWh for 100kW-1MW systems and EUR 0.33/kWh for projects greater than 1MW. For Spanish projects lower than 100kW the tariff is even more generous at EUR 0.44/kWh (and all larger projects are legally divided into 100kW units).
  • However, on 2 June Spanish PV industry group Asociacion de la Industria Fotovoltaica (ASIF) acceded to an unofficial government proposal to set the feed-tariff at EUR 0.33/kWh for rooftop installations and EUR 0.29 for ground-mounted panels, and in both cases only for projects of maximum capacity 2MW, according to Jos� Galindez, president of Spanish turnkey developer Solarpack Corporacion Tecnologica and until recently an ASIF executive.

Spain draft cap of solar incentives

  • Shows the incentive limits proposals in Spain

How important is Spain for Trina Solar?

We thought we look that up for ourselves, from the conference call after the first quarter results 2008

Terry Wang

  • For 2009, we are following the same kind of strategy of diversification in different countries worldwide that we have been doing and selling as we did last year long-term concepts. So, mainly we are keeping in countries like Germany, Italy, and also Spain, but entering in new countries with higher volumes and higher percentage from the geographical diversification like USA, Korea, France, Czech Republic, and even we are selling currently in Australia, in Mongolia, and in Greece.

Vishal Shah – Lehman Brothers

  • So, if you were to just think about Germany, Italy, and Spain, what would that represent next year in terms of your booked orders; would that be 30% or would it be more than that or less than that?

Terry Wang

  • We have booked orders mainly for Germany and Italy, but also some in Spain, and the percentages are around 20% for Germany, around 25% for Italy, and around 12% to 13% for Spain. If you compare that to what the % were in 2007, Spain is diminishing in importance quite rapidly: here from the conference call Q3 2007
  • For the third quarter, the geographic breakdown of our sales was 44% Germany, 37% Spain and 15% Italy. Thus, it brings our one year-to-date geographic breakdown to 43% Germany, 33% Spain and 15% Italy.

Now, lets compare that to what has been said in the cc after Q3 2007

  • For the third quarter, the geographic breakdown of our sales was 44% Germany, 37% Spain and 15% Italy. Thus, it brings our one year-to-date geographic breakdown to 43% Germany, 33% Spain and 15% Italy.

The difference in numbers are pretty hefty, and it’s because Trina is entering new markets, reducing the importance of Spain (but also Germany). It did have an effect on the stockprice though, as such stories are not good for the whole sector.

Tags: TSL