Energy company moving into solar

The Chinese energy group Hanergy Holding Group Ltd agreed on Tuesday in Beijing to acquire all of the shares that Q-Cells SE, a German maker of solar panels, holds in its subsidiary Solibro, a maker of thin-film solar panels.

The purchase comes as the latest evidence of Chinese energy companies' interest in the European market during the current debt crisis.

After the completion of the acquisition, Solibro will increase its yearly production capacity to 100 megawatts in order to supply power to Hanergy customers in Europe. The companies declined to release information about the value of the deal.

"Hanergy has taken many big steps in recent years and the latest acquisition will help the company improve its technology used in manufacturing thin-film solar panels, which still lags behind what is used internationally," said Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance.

China is the world's largest maker of solar panels, mainly producing what are known as polysilicon panels. Manufacturers that want to make thin-film panels are faced with technical obstacles.

Gao said the thin-film solar industry has developed slowly in the past few years. He said producers of polysilicon solar panels have worked to make their products more efficient and to reduce the cost of making them on a large scale, causing the demand for thin-film solar panels to decline and affecting investors' enthusiasm for thin-film cells.

"In recent years, some solar companies have already cut or planned to cut their thin-film solar panel businesses," she said. "Even so, Hanergy has been a leading company in thin-film solar projects in the country and is a company that has long-term strategies and investment plans."

Following the acquisition, Hanergy's chief competitor will be the US-based First Solar Inc, the world's largest manufacturer of thin-film panels.

The company said it has explored various opportunities for investing in thin-film production and has decided to put money into a specific technology, called copper indium gallium diselenide co-evaporation, which Solibro has developed over the past 25 years.

"Solibro has a proven track record in thin-film technologies," said Jason Chow, senior vice-president of Hanergy Industrial Photovoltaics Group.

"Hanergy will provide the extensive network, the strong production capacity and the long-term research and development investment. We are confident that the acquisition will enhance Solibro's performance and capacity despite the industry's current downturn."

Hanergy Chairman Li Hejun said the acquisition will consolidate the company's position in the global market.

The company said it will not reduce the size of Solibro's workforce nor change the leadership at the company and that Solibro's operations will remain unaffected.

Nedim Cen, CEO of Q-Cells, said Solibro's thin-film technology and existing production capacity can be fully taken advantage of following the acquisition.

To expand more at home and abroad, Hanergy received a credit line worth 30 billion yuan ($4.7 billion) from China Development Bank in November.