Consortium backed by solar entrepreneur Zhengrong Shi, wins approval for commercial solar farm

Zhengrong Shi, the Chinese/Australian entrepreneur known as the “Sun King” for his role in pioneering the global solar sector, has emerged as part of a consortium that has won approval for New South Wales’ first commercial solar farm.

Shi is the chief and major shareholder of Nasdaq-listed, China-based company Suntech Power Holdings, which is developing the $300 million solar farm in conjunction with Infigen Energy.

The project, to be located in the hot and dry town of Nyngan, involves the construction of 70 blocks of solar panels (about 300,000 individual panels in total) set about three metres off the ground.

It is estimated that the 200-hectare farm will generate sufficient energy to power 20,000 homes.

The Infigen-Suntech consortium has plans to develop three such solar farms in NSW and Victoria, and hopes to gain funding from the Federal Government’s Solar Flagships program, which will pump $1.5 billion of funding into solar projects around Australia.

The Federal Government is due to reveal funding winners in June.

The NSW Government approval is a good way for Shi to kick off 2011, after a difficult 2010.

Suntech Power’s share price plunged from just above $US18 to around $US8, as investors began to fear an oversupply of solar panels could cause a global glut and force down prices.

Also, with government budgets under pressure all over the world, reductions in government subsidies for solar energy have occurred (or a set to occur) in Australia, Europe and the United States, where a key rebate scheme ends in January and may not be extended.

The dramatic fall in Suntech Power’s share price has seen the value of Shi’s holding fall from just over $1 billion to around $450 million – well below the $4 billion his stake was worth just three years ago.

Despite the poor share price performance, Suntech Power is still enjoying strong revenue growth. Revenue in calendar 2010 is tipped to have grown by at least 64% to about $2.75 billion, while revenue in 2011 is tipped to rise to $3.4-3.6 billion.