Suntech snaps up more silicon

Suntech's global hunt for silicon supplies returned to South Korea yesterday as the company signed its second major supply deal with chemicals giant DC Chemical.

Following on from a $631m (£355m) deal signed in March this year, the two companies have now inked a $750m contract that will see DC Chemical provide the solar manufacturer with polysilicon from 2010 to 2016.

China-based Suntech's chairman and chief executive officer Dr Zhengrong Shi welcomed the deal, arguing that with concerns over silicon supplies continuing to dog the industry, contracts such as the one signed with DC Chemical were " key to securing long-term polysilicon supply at prices that are compatible with grid parity".

He added that the size and length of the deal was "indicative of our belief that solar energy will become a cost-effective alternative to fossil fuels".

Suntech has been feverishly signing up silicon suppliers over the past few months as it attempts to appease concerns over supply bottlenecks and lay the foundation for an expected spike in demand for photovoltaic (PV) solar panels that according to study this week by the European Photovoltaic Industry Association could see PV account for 14 per cent of global energy supplies by 2030.

The company already holds a minority stake in Chinese solar wafer manufacturer Shunda Holdings and in the past month has signed a $100m seven-year deal with Russian polysilicon manufacturer Nitol Solar and a similar supply deal with China-based GCL Silicon.