Government funds help solar firms earn profits abroad, says NSP chairman Nuying Huang, Taipei; Jackie Chang, DIGITIMES [Tuesday 11 September 2012] Taiwan's Ministry of Economic Affairs will assign representatives to Hsinchu Science Park to assess the possibility of providing funds to Taiwan-based solar firms, according to Quincy Lin, chairman of Taiwan-based solar cell maker Neo Solar Power (NSP).
During Taiwan President Ma Ying-jeou's last visit to the park on July 14, 2012, Lin suggested an annual fund of US$15 billion be allocated from the country's foreign reserve to help Taiwan's solar industry.
Lin disclosed that he suggested US$5 billion be allocated as a guarantee to help Taiwan firms secure bank loans and US$10 billion as investments on Taiwan makers' solar power plant projects abroad, profits from which would increase Taiwan's foreign reserves.
Lin further explained that Taiwan's total foreign reserves in August came to US$390 billion, and if the government can allocate US$15 billion every year to assist Taiwan-based solar firms, the country will benefit because every additional amount of US$800 million in foreign reserves can create 10,000 jobs and increase national income by NT$120 billion (US$4.04 billion).
Thomas Hsu, NSP's senior vice president and CFO, added that this policy has been practiced in countries such as China, Japan, and the US. Hsu hopes Taiwan's solar supply chain can become more comprehensive by the implementation of this policy.
Currently, for Taiwan-based solar firms to invest in overseas solar power plants, they need to rely on borrowing for 60-70% of the total invesments. The US$5 billion provided by Taiwan's government can be used as a loan guarantee in support of Taiwan-based solar firms, Hsu pointed out. The current internal rate of return (IRR) for solar power plants is 8%, meaning for every US$10 billion of investment, Taiwan can gain US$800 million in foreign reserves, added Hsu.
General Energy Solutions (GES), a solar PV system subsidiary of NSP, has been developing solar power plants in various countries, said Hsu. In 2012, GES has seven solar PV system projects, a total of 18MW in the US. Among the 18MW of projects, 1MW is eligible for 2011 cash subsidy while the rest are eligible for 2012 tax credits. In addition, combining the federal and state subsidies, the average IRR of projects in the US is around 8-12%. GES also has 13 solar PV system projects in Taiwan with a total capacity of 5MW, according to Hsu.
GES's 2012 revenues are expected to be between NT$900 million to NT$1.1 billion, according to NSP. Currently, NSP holds 60% of GES shares while Danen Technology holds 30%. The rest of the shares are owned by others.
Quincy Lin, chairman of NSP
Photo: Michael Lee, Digitimes, September 2012