Power Play

GREEN ENERGY:The head of one of the world's biggest photovoltaic companies describes how alternative energy is transforming China's image and how his company is leading the way

POLLUTION, NOT innovative use of solar power, is what tends to make the headlines about China but one of the country's most dramatic sights is that of solar-power generators atop farmers' houses in even the most remote areas.

China has adopted renewable energy because it works and it's cheap, and leading the drive is solar power. The company spearheading that drive is Suntech, the brainchild of Shi Zhengrong who, in less than a decade, has created one of the world's biggest solar-power companies and transformed the renewable energy sector, as well as doing much to bolster China's image internationally.

"Innovation is becoming increasingly important in China. On the one hand you have the government emphasising the importance of it, and also companies realise the importance of it as a way of differentiating themselves from other competitors," said Shi in an interview.

Time magazine made Shi one of their Heroes of the Environment, while Fortune magazine named him Asian Businessman of the Year. He also ranks in the high hundreds among the World's Richest People in Forbes.

He is speaking in the company's headquarters in Wuxi in Jiangsu province, not far from Shanghai. Educated at the University of New South Wales, he got his PhD in record time and is very much a child of New China - studied abroad, took foreign citizenship (Australian) and has transformed his ease of working in both China and the West into a multi-billion-dollar enterprise.

And yet his background testifies to a much different China. Shi and his twin brother were born on a farm on Yangzhong Island in 1963. Still reeling from the famine caused by Mao Zedong's disastrous agricultural experiment, the Great Leap Forward, his parents could not afford to support the twins and two other children and gave Shi up for adoption.

He started with $6 million from the government in Wuxi in 2001, and set up a factory, and the company expanded quickly on the back of global demand for solar cells in countries which promoted clean energy such as Germany and Japan.

Within a few years, Suntech had become the world's largest photovoltaic (PV) module manufacturer, and Shi was in a position to raise $400 million on the stock exchange. Suntech currently has 8,000 employees around the world and $2 billion in revenues.

In 2008, total net revenues grew 42.7 per cent year on year to $1,923.5 million. However, in the final quarter the company registered a GAAP net loss of $65.9 million. The group delivered 500MW of power last year. Maintaining that position, particularly in the current difficult operating environment, involves heavy reliance on creativity.

"In our business, because we are in the solar power technology business we have to stay ahead of the competition, we have to stay five or 10 years ahead. This means innovation on products and innovation on management," says Shi.

"Innovation can apply to the business model, and we also need to think about what's going to happen when this business becomes mature. We need to prepare for the future today," he says.

Shi is fanatical about renewable energy - it's more than just a job, it's an obsession and his belief in environmental issues is central to Suntech's positive image as a sustainable enterprise.

"The theme for Suntech is that we are positioned globally, and we have a clear and strong vision. This is unlike some local companies who come for quick money, but we are committed because we believe solar power can produce a sustainable future," says Shi.

"More and more governments are realising the climate change issue. Look around the world - this year you had a long winter in Europe, you had a drought in China and you had bush fires in Australia. Climate change is real for many countries," says Shi.

"The future in the solar technology business is bright. It's temporarily difficult due to the financial crisis. The demand is there, but companies can't get the finance. The solar industry is in relatively better shape than many others."

Even in such a difficult time, governments are not reducing their subsidies for renewable energies, and some countries like the United States, under the administration of Barack Obama, are increasing them.

Suntech has always been strong in Europe and is seeing a lot of development in Europe, in places like Spain, Italy, France, the Czech Republic and Greece. "The European Union is committed to providing 20 per cent of its energy from renewable sources by 2020, that's a huge commitment," says Shi.

A major focus is the Pluto high-efficiency photovoltaic module. Suntech has a fully operational 34MW Pluto PV cell line and is in the process of adding another 68MW of Pluto capacity. "We spent huge efforts to develop Pluto high-efficiency solar technology and to improve efficiency on that," said Shi. The group expects to receive industry certification for Pluto PV modules this year and is looking to ship more than 50MW of Pluto modules in 2009.

"This is my personal vision. We have a mindset based on innovation, quality, the brand, and our company gives a different impression from some others. We are a new generation type of company in China," he says.