Hanergy Holding Group Ltd's acquisition of Arizona's Global Solar Energy Inc - its third buy of a struggling maker of thin-film solar cells in the past year - continues the Chinese company's effort to push deeper into what it sees as a growing market in the troubled solar industry.

The deal, which has won approval from both US and Chinese regulators, reflects the company's belief that demand for thin panels, also known as flexible copper indium gallium diselenide, or CIGS, solar cells, is destined to grow despite a massive glut of supply that has driven many solar panel makers into dire straits.

In a release, Hanergy Chairman Li Hejun called flexible and thin-film photovoltaic technology "the future and the trend of the industry".

Thin-film solar cells are considered a more efficient solar panel technology than traditional silicon-based cells, although high manufacturing costs are seen as an obstacle to mass production. Some analysts expect thin-film technology to overtake conventional solar panels in the long term.

Li said the acquisition last week of Tucson-based GSE for an undisclosed sum gives Hanergy - a holding company whose units offer hydropower, solar, wind farms, and other clean energy projects - "the ability to accelerate the development and large-scale application of our high-efficiency flexible CIGS modules". GSE, whose products are used in rooftop solar systems, electronic vehicles and other portable solar products, is one of the few producers capable of making thin panels on a commercial scale, the companies' release said.

GSE is the latest company to join Hanergy with "technologies that combine the competitive advantages of flexible thin-film PV modules and large scale production", the release said.

In September, Hanergy purchased Germany's Solibro GmbH, a unit of insolvent German photovoltaic cell maker Q-Cells SE, for an undisclosed sum. In January, it acquired Miasole, a California solar-power technology company. Terms were not disclosed.

The GSE deal - which makes the company a wholly owned US-based unit of Hanergy - will "best leverage our unique products and technologies to complement Hanergy's existing ones", GSE CEO Jeff Britt said in the release.

The transaction - approved by both the Committee on Foreign Investment in the US, and the National Development and Reform Commission in China - comes more than a year after GSE announced in June 2012 it was exploring strategic options amid overcapacity in the photovoltaic market. Six months later, in December, it said it had slashed its workforce by 70 percent mainly in its roofing product line to "preserve operations and production flexibility" while "acquisition offers and strategic options are considered."

Li told a press briefing early this year that despite global solar-panel overcapacity, thin-film cell technology still had room to grow, MarketWatch reported. The CEO said Hanergy's strategic focus would allow it to survive plunging panel prices tied to the supply glut. He predicted the global renewable energy industry would recover in the second half of this year, MarketWatch reported.

In 2011, China Development Bank gave Hanergy a five-year credit line of 30 billion yuan ($4.8 billion) to fund the construction of solar and hydropower plants and invest in overseas markets, Xinhua reported.

In a related development, the European Union announced this weekend that it settled its solar panel antidumping dispute with China as tariffs were set to surge, helping to head off a larger trade war between the EU and China.

The agreement came seven weeks after Brussels had imposed provisional anti-dumping duties on Chinese solar panels, starting with an immediate hike of 11.8 percent. The tariff was set to rise to 47.6 percent on average by Aug. 6.

The move was taken after the European Commission accused China of undercutting the solar market in Europe, the world's largest for solar panels, and putting 25,000 jobs in the hard-hit European photovoltaic manufacturing industry at risk.

michaelbarris@chinadailyusa.com