United PV Turns to Crowdfunding After Stocks in China Plunge

  • Solar developer to return cash from projects to investors
  • Tumbling stocks has limited traditional forms of finance

United Photovoltaics Group Ltd., a Chinese solar-farm operator, said it will use crowdfunding to raise money for its investment after the crash in stock prices in the nation made traditional fundraising more difficult.

The company plans to “distribute solar farms as bank products to thousands of households," Chief Executive Officer Alan Li said in an interview in Beijing. "It’s a concept of crowdfunding and will be completed under the banking system."

United PV, whose shares have lost half their value since peaking in June, is seeking to finish the fund raising effort by the end of this year, Li said. The Hong Kong-based company is in talks with several banks about the logistics needed to make it happen, he said. He declined to name the banks or discuss how much he’s seeking to raise.

United PV is joining Chinese companies including the Internet investment platform Solarbao.com in crowdsourcing funds for solar projects, broadening the industry’s sources of financing. The benchmark Hang Seng Index has plunged 17 percent since June, and the Shanghai Composite Index is down 29 percent since then.

The Chinese stock market rout "has affected the ability of many companies to raise financing," Li said.

"Individual investors are interested in Internet-based wealth products due to limited investment choices," making crowdsourcing a likely source of funding, said Nick Duan, a Beijing-based analyst from Bloomberg New Energy Finance.

Li said the market hasn’t yet fully evolved and is being helped by China’s effort to promote use of the Internet.

The company raised 10 million yuan ($1.58 million) last year for a 1-megawatt solar plant in the southern city of Shenzhen, which was the first crowdfunding in China for the industry.

United PV is working to achieve its target to acquire 1 gigawatt of solar power plants this year, Li said. The company is also interested in buying solar projects in Europe, North America and Australia, he said.

— With assistance by Feifei Shen

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