Taiwan’s Neo Solar Power Corp the largest producer of solar cells in the country has announced today that it has signed a 400 MW solar cell supply deal with Ontarios Canadian Solar.
The deal comes as something of a relief for the company. Its Q3 financial results revealed a net loss of $5 million following a tough few months following the U.S. Department of Commerces decision to impose tough anti-dumping tariffs on cells from Taiwan.
This ruling was itself an aftershock from the larger U.S.-China trade dispute, which saw Chinese solar companies use Taiwan-made components for their modules in an effort to circumvent U.S. laws.
In response to heightened demand from China, Neo Solar and other leading Taiwanese cell and module makers ramped up their production capacity to such an extent that analysts now estimate that, with Chinese orders all-but absent, Taiwans solar companies have a 1 GW shortfall on their order books.
As a result, many had been rooting around for new business in new markets such as Europe and elsewhere in Asia. And although Neo Solar Power has supplied cells to Canadian Solar since 2007, the size and timing of this latest deal has been warmly welcomed by the Taiwanese company.
"We are glad that we have signed a major supply contract with Canadian Solar, which has been a long-term partner of Neo Solar since 2007, when Neo Solar began supplying solar cells to the company," said Neo Solar chairman Quincy Lin. "This deal will help drive Neo Solars growth and will help Canadian Solars rapid business expansion next year."
Canadian Solars projected module capacity by the end of this year is likely to exceed 2.6 GW deployed, according to IHS, which puts the company fifth overall in terms of capacity installed globally.
However, stocks in the company fell 8.1% on Monday at the New York Stock Exchange (NYSE) in response to the news from OPEC last week that it would maintain its daily production rate of crude oil some 30 million barrels a day despite prices per barrel falling to a five-year low of $63.72 at the weekend.
The global price of oil is expected to be propped up by various tax incentives in most parts of the world, but its falling price in November means that consumers are likely to benefit at some point over the next few weeks. Such a scenario is likely to impact on the share price of other solar companies before the end of 2014, say analysts.