Suntech Breaks Into Solar-Power Financing

"You can assume that it will bring up the price of delivered kilowatt or megawatt hours because your debt costs are higher, the conditions are more onerous and the transaction costs will be higher," McLanahan said.

The joint venture marks Suntech's first foray into the project financing and management business and underscores its ambition to grab a larger slice of the U.S. market. With its newly announced initiatives, Suntech said it plans to triple its U.S. sales in 2009.

Suntech has said it sees the United States as a potentially large and important market.

So far, the market has been driven by a growing number of states and cities that offer solar incentives and require utilities to buy renewable energy. It is also driven by federal incentives that are currently set to expire by the end of the year.

Wuxi, China-based Suntech expanded its presence in Europe and Asia earlier this year by opening sales offices in Germany, Spain and South Korea.

Suntech's acquisition of EI Solutions also represents the solar manufacturer's expansion in the U.S. market. EI Solutions, based in San Rafael, Calif., engineers and builds solar-power plants and counts Google (GOOG Quote), The Walt Disney Co. (DIS Quote) and The North Face (a subsidiary of VF Corp. (VFC Quote)) among its customers.

As a Suntech subsidiary, EI Solutions will be renamed Suntech Energy Solutions. Andrew Beebe, EI Solutions' current president, will head the new subsidiary. Suntech declined to disclose the price of the deal.

With Gemini and EI Solutions, Suntech believes it can stand out among competitors when bidding for contracts with utilities, government and businesses.