First Solar Wins Major PV Order in China
In an announcement that is significant on several levels, U.S.-based First Solar Inc. announced a memorandum of understanding (MOU) for what is the world's biggest power plant project to date, to be built in China's Mongolian desert.
Aaron Hand, Executive Editor, Electronic Media -- PV Society, 9/8/2009
In an announcement that is significant for China as well as a U.S.-based PV manufacturer's foray into the growing Chinese market, First Solar Inc. (Tempe, Ariz.) announced a memorandum of understanding (MOU) for what is the world's biggest power plant project to date, to be built in the Mongolian desert.
First Solar signed the MOU with the Chinese government to build a 2 GW solar power plant in Ordos City, Inner Mongolia, China. The project will be built over a multiyear period. Phase 1 will be a 30 MW demonstration project that will begin construction by June 1, 2010, and be completed as soon as possible thereafter. Phases 2, 3 and 4 will be 100 MW, 870 MW and 1 GW. Phases 2 and 3 will be completed in 2014, and Phase 4 will be completed by 2019.
 |
|
During this week's ceremony commemorating a major solar power plant agreement between First Solar and China's government, Wu Bangguo, chairman of the standing committee of the National People's Congress, signs a solar panel. |
The announcement is significant on a number of levels, including the size of the project, the fact that China has turned to a U.S. solar manufacturer, and that First Solar's technology relies on thin-film cadmium telluride (CdTe) rather than the market-dominating wafer-based crystalline technology.
China is home to Suntech Power Holdings, the leading crystalline-based solar cell producer in the world. China also leads the world in solar panel production. Both of these facts make it that much more significant that the Chinese government has turned to a U.S. manufacturer for this large solar project. According to recent market research from iSuppli, First Solar will overtake China's Suntech this year as the top solar cell producer.
Although China has dominated the PV market, it has been exporting the vast majority of its solar devices while China has lacked a domestic market for the technology. But key to First Solar's success will be its inroads into a Chinese energy market that is being quickly boosted by announcements earlier this year of subsidies for utility-scale solar power projects. China's government aims to have 2 GW of solar generating capacity in place by 2011.
"This major commitment to solar power is a direct result of the progressive energy policies being adopted in China to create a sustainable, long-term market for solar and a low-carbon future for China," said First Solar CEO Mike Ahearn at the signing ceremony this week. "We're proud to be announcing this precedent-setting project today. It represents an encouraging step forward toward the mass-scale deployment of solar power worldwide to help mitigate climate change concerns."
The Mongolian project will operate under a feed-in tariff, which will guarantee the pricing of electricity produced by the power plant over a long-term period. "The Chinese feed-in tariff will be critical to this project," Ahearn said. "This type of forward-looking government policy is necessary to create a strong solar market and facilitate the construction of a project of this size, which in turn continues to drive the cost of solar electricity closer to grid parity - where it is competitive with traditional energy sources."
The MOU states that during the implementation of the initial phases of the project First Solar will consider the possibility of module and supplier manufacturing sites in Ordos, and other considerations required to support a First Solar investment. First Solar also intends to facilitate expansion of the supply chains in China for thin-film PV module production and for the recycling of PV modules after use.
"We are very pleased to be partnering with one of the solar industry's global technology leaders in a project of such significance to Ordos's low-carbon future," said Cao Zhichen, vice mayor of the Ordos Municipal Government. "Discussions with First Solar about building a factory in China demonstrate to investors in China that they can confidently invest in the most advanced technologies available."
The MOU sets forth the agreement in principle, but final agreement is subject to further negotiations among the parties involved.
