By Michael Forsythe and Feifei Shen
Bloomberg News
First Solar Inc., the world’s biggest maker of thin-film solar modules, will team up with a state- owned Chinese energy company to build a 30-megawatt solar plant in China’s Inner Mongolian desert.
Tempe, Arizona-based First Solar will have a minority stake in the solar plant in the city of Ordos. China Guangdong Nuclear Solar Energy Development Co. will be the majority owner and operator of the project, according to a statement distributed before a briefing. First Solar will supply solar modules and provide engineering services, President Bruce Sohn told reporters in Beijing today.
The agreement gives First Solar a state-backed partner to develop the project, which was originally set to begin its first phase of construction last June. The company announced the Ordos project in 2009 and said then it would have capacity of 2 gigawatts, which would make it the world’s biggest solar plant using photovoltaic cells. First Solar said it expects to expand to that size by 2020.
The energy sector is one of several industries designated as “strategic” by the Chinese government and dominated by state-owned companies such as Guangdong Nuclear Solar.
First Step
“This is a good first step to getting into big projects in China,” John Hardy, an analyst for New York-based Gleacher & Co., said in an interview today. “They are moving in the right direction with these utility-scale solar plants in North America and Asia, as demand slows in Europe.” Hardy has a “buy” rating on First Solar.
First Solar rose 90 cents to $132.02 as of 9:57 a.m. in Nasdaq Stock Market composite trading. First Solar shares have fallen 4 percent in the past year.
The unit of China Guangdong Nuclear Power Group Co. in 2009 won the right to build and operate a 10-megawatt solar-power plant, China’s first solar concession project, in Gansu province. The plant began operations in December with a tariff of 1.09 yuan (16 cents) a kilowatt-hour, according to Bloomberg New Energy Finance data.
Guangdong Nuclear Solar “brings a credible partner to the table with expertise in this market that we have not had,” First Solar’s Sohn said.
Energy Cooperation
Cooperation in alternative energy such as solar and wind is on the agenda for Chinese President Hu Jintao’s state visit to Washington later this month. The Ordos project was delayed after the Chinese government failed to pass rules on preferential tariff rates for solar energy.
The agreement today covers the first phase of the Ordos project, a 30-megawatt plant with construction starting before the end of the year, Sohn said.
TK Kallenbach, First Solar’s executive vice president for marketing and project management, said the company is looking to obtain a so-called feed-in tariff from the Chinese government of around 14 to 17 cents per kilowatt-hour.
Photo: Courtesy of First Solar
