Shungfeng Posts Loss

Shungfeng Clean Energy has become one of the world’s biggest solar companies through acquisitions across the solar value chain. The company which is the owner of the erstwhile solar cell and panel leader Suntech has also bought companies in USA and Germany. It has also invested billions of dollars in solar projects in China as it wants to become a powerhouse solar electricity supplier in that country. However, its bets have lost a massive amount of money in 2016.

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The biggest culprit for the loss was the grid curtailment of electricity from the western regions by the Chinese electricity department. Xinjiang, Gansu and Qinghai provinces have seen solar generated electricity not being purchased. This has meant a huge loss to the developer of massive solar power plants in that region. Since solar electricity cannot be ramped up or down like gas or thermal power plants, any non-purchase of solar power means a loss for the producer. Shungfeng has shown as loss of almost $70 million in 2016 for this reason alone.

The company has also cancelled its plan of selling its solar manufacturing operations to its principal shareholder to generate more cash as a result of this. The company’s acquisitions of solar companies in USA have also reported large losses. While Lattice Power showed a loss of almost $20 million, its other solar manufacturing subsidiary Suniva also increased its losses to $16 million this year.