A giant Chinese solar energy firm, originally based on Australian technology, plans to close its local research arm amid concerns about the future of renewable energy in the country.
Suntech, founded by Australian-trained former “Sun King” billionaire Shi Zhengrong, will next month close its Suntech R&D Australia unit with the loss of about a dozen jobs.
The company, now owned by a Hong Kong solar tycoon Cheng Kin Ming and renamed Wuxi Suntech, said in May it invests more than $3 million a year in Australian research and development.
“Suntech wants to continue a relationship with Australia, but it no longer makes the same sense to keep a research team [here],” Renate Egan, managing director of the Sydney-based R&D unit, said.
Dr Egan said Wuxi Suntech recently announced a plan to consolidate most research activities at its base in China. The Abbott government’s signals that it will cut the national renewable energy goal also reduced confidence about future opportunities.
“Clearly the market’s not going to grow here,” Dr Egan said, referring to large-scale projects.
The government is yet to release the recommendations of its hand-picked panel reviewing the Renewable Energy Target. Clean energy investors fear the panel, headed by former Caltex chairman and climate change sceptic Dick Warburton, will back a cut of the current goal of supplying 41,000 gigawatt-hours of renewable energy by 2020 – if not scrap it entirely for new entrants.
Hui Wu, director of global marketing for Wuxi Suntech, said the unit’s closure would “not change our continued focus and commitment to the Australian market”.
“We have more than $6 million committed to projects with [the University of UNSW] until 2018 and we are constantly seeking further opportunities,” Mr Wu said.
Richard Corkish, chief operating officer of the Australian Centre for Advanced Photovoltaics at the UNSW, said the loss of the Suntech unit could see significant talent head overseas.
“We hope as big a fraction as possible [of the researchers] can remain in Australia,” Dr Corkish said, adding that there has “not been too much good news” lately for the industry’s outlook in Australia.
While Australia continues to conduct world-leading research into aspects of solar PV research – such as UNSW’s work on increasing the productivity of solar panels – the level of support is likely to shrink because of government cutbacks, Dr Corkish said.
The Australian Renewable Energy Agency currently provides grants for UNSW, Monash University and other institutions.
However, the Abbott government has vowed to scrap the agency and is expected to try again in the Senate next week. Its first attempt was foiled by new Victorian senator Ricky Muir, who voted with Labor, the Greens and the Palmer United Party to block the move.
While the potential loss of research funds and the exit of Suntech will dent the ability to create further breakthroughs in Australia, Dr Corkish said the flow of undergraduate students into renewable energy fields will also dwindle if the industry stalls.
Prospective students “will look with some trepidation at the current job prospects in Australia,” Dr Corkish said.
While Australia’s take-up of renewable energy may be about to slow markedly, other nations are likely to press ahead.
A research report out this week by investment giant UBS estimates solar panels combined with storage are likely to be competitive with conventional power grids by 2020. Battery prices are likely to halve by the decade’s end – and continue to fall – giving the solar-storage combination a payback period of six to eight years by then.
Suntech was set up by Dr Shi, a UNSW PhD graduate, and soared on its debut on the New York Stock Exchange in 2007. Dr Shi’s stake was valued at more than $3 billion at one point.
The company, though, expanded too rapidly just as the global financial crisis struck, and also made some poor investments placing it close to bankruptcy.
Secretive Hong Kong billionaire Cheng Kin Ming has since absorbed Suntech into his Shunfeng group, and the company aims to exceed its previous record solar panel output in the next year or so, reclaiming its place among the world’s largest producers.
