United Renewable Energy Emerges At Energy Taiwan As Solar Industry Consolidations Continue
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Energy Taiwan in Taipei last week brought together the rapidly evolving world of Taiwanese solar companies producing a range of solar cells, modules, racks, trackers, and complementary products. The current Taiwanese government has set a bold goal of phasing out its 3 and a half nuclear plants by 2025 which it hopes to achieve with the installation of 5.5 GW of new offshore wind production capacity which will be complemented by a full 20 GW of new photovoltaic solar production capacity.
Being an island in a region prone to typhoons, Taiwan poses a rather difficult environment for solar panels as they must be able to resist the corrosion from the salty air, the heavy winds in the stormy season, and must be weatherproof over several decades. That is a tall order for manufacturers to fill, and has consistently made Taiwanese solar modules some of the most sought after as companies know that if the panels can stand up to the conditions in Taiwan, they’ll certainly do well in most other regions of the world.
Announcing United Renewable Energy
Energy Taiwan saw a new solar company hit the scene as Neo Solar Power, Gintech, and Solartech Energy Corp prepare to formally merge under the new United Renewable Energy, or URE f0r short. Neo Solar acquired the other companies through stock share conversions that will see all three companies folded into a single new brand. CleanTechnica spoke with URE president Andy Shen about the merger to learn about the implications of the integration and what it means for the company and the solar industry in Taiwan.
Andy was very open that the merger presented opportunities to further improve margins on modules from the new combined company, but noted that it would take time to get to where it wanted to be. He tossed out an initial target of 6% margins on panels but shared that 10% was a very reasonable number for the company to hit in the next 12 months.
Before the merger, Neo Solar Power alone was already the largest single manufacturer of solar cells in Taiwan and one of the top 10 in global production capacity. Andy shared that, “we are moving into a more vertically integrated company,” as the companies bring together their combined solar cell manufacturing across southeast Asia with their local solar module production capacity in Taiwan.
URE officially launches as of October 1st, after which the new company will seek to optimize its administrative overhead as core financial teams, administrative, and corporate functions are consolidated in the coming months. The staffing reductions will not happen at the hand of layoffs or broad cuts, but through attrition over time. Andy was very clear on this, stating multiple times that, “we will not lay off people.”
Of the combined 5 GW cell production capacity, Andy shared that 3.5 GW was currently produced in Taiwan, although there is a possibility that the company will shift this production capacity to another market to optimize the balance of its cell and module production capacity within the new company. That translates to moving the physical solar cell manufacturing equipment to another country or the continuation of cell exports, which is very common for Taiwanese solar cells.
On the financial side, Andy shared that URE will continue to be traded on the Taiwan exchange under the same listing number, but with a new ticker symbol. URE is being cheered on by the home team, as Andy shared that two different departments of the Taiwanese government are working towards a $3 billion Taiwan New Dollars — almost $100 million USD — equity investment in the new company. The cash injection will see the government buying up around 8% of the company at today’s share price.
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