First Solar to make major China foray with 2GW PV power plant

US-based First Solar, one of the world’s biggest makers of thin-film solar modules, has said that it will build a 2GW solar power plant in China’s Inner Mongolia region.

Its deal with the Chinese government, announced yesterday, marks the first major foray into the China market by a US solar company and is one of the world’s biggest planned PV plant projects to date.

"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 chief executive Mike Ahearn.

"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."

Construction is to start by June 2010 on the first 30MW phase of the project, with 100MW and 870MW segments to be completed by 2014. The remaining 1GW of capacity is to be built in the five years to 2019. First Solar’s thin-film panels will be used in all the arrays.

The memorandum of understanding states that the Ordos project will operate under a feed-in tariff which will guarantee the pricing of electricity produced by the solar power plant over a long-term period.

Ahearn said the tariff 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”.

China has not yet set a feed-in tariff for utility-scale solar plants, although it is expected to do so by year-end.

The financial terms of the agreement have yet to be reached. First Solar said a comparable plant in the US would be priced at $5bn (£3bn) to $6bn, although costs are expected to be lower in China.

The project will likely qualify for subsidies of 50 to 70 per cent under the federal government’s “Golden Sun” initiative, which covers large-scale solar projects with a capacity of more than 500MW.

China is home to several of the world’s largest makers of solar panels and cells, but they generally lack First Solar’s technological expertise in thin-film PV modules – a relatively new production sector that officials deem to have local development potential.

The MOU stipulates that First Solar is to study the feasibility of establishing factories for manufacturing PV modules in Ordos. First Solar is to also help expand China’s supply chain of thin-film PV modules and facilitate recycling of used modules.

Cao Zhichen, vice mayor of Ordos Municipal Government confirmed the importance of First Solar establishing manufacturing sites in the region.

"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," he said.

The PV plant will be part of a planned renewable energy park in Ordos that is to generate a total of 11.95GW of power from wind turbine, solar, biomass and hydrostorage – the use of off-peak power to pump water to an elevated reservoir, where it can be stored and released to turn turbines during peak demand.