Solar demand revival draws panel makers out of debt shadow

Tue Feb 11, 2014 4:00pm EST
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By Umesh Desai and Charlie Zhu

HONG KONG Feb 12 (Reuters) - Solar panel makers are tapping capital markets for the first time in more than two years, shoring up battered balance sheets and improving their ability to pay off billions of dollars of debt as demand for the green energy recovers.

JinkoSolar Holdings, JA Solar, Canadian Solar and U.S. companies including First Solar and Sunpower Corp have raised about $3 billion in the past year, over according to industry estimates and Thomson Reuters data, mostly through private share placements, public share issues and convertible bonds.

Their efforts were boosted by China's decision in July to quadruple its solar power capacity to over 35 gigawatts (GW) by 2015 and Japan's need to replace the nuclear power it shut off after the 2011 Fukushima disaster.

These factors, as well as rising demand from the United States, has helped to at least double the share price of many solar firms from mid-2012 levels. Chinese firms dominate the global solar industry, which saw a slew of defaults triggered by overcapacity and dwindling demand.

Solar panel makers were largely absent from the capital markets between 2011 and mid-2013 when the industry was mired in a severe slump. Analysts expect global panel shipments to rise by at least a tenth this year to more than 40 GW.

"I would characterise it as a re-engagement with the capital markets after a period of absence," Robert Todd, director of renewable energy banking at HSBC in Hong Kong, told Reuters. "You are going to continue to see this trend."