ReneSola wins rights to build $706m China solar power plant

ReneSola has announce d that it is to build a $706m solar farm in northern China after winning the exclusive rights to the 150MW on-grid project.

Taiyangshan Development Zone, near the city of Wuzhong, yesterday awarded the contract to ReneSola, marking the Chinese solar wafer maker's first foray into full project development.

"The emergence of downstream projects in the domestic market represents a significant opportunity for ReneSola to create new revenue streams and expand local market share," said company chief executive Li Xianshou.

The project, to be located in Ningxia Hui Autonomous Region, is still subject to a feasibility study and government approval. But Renesola said that construction on the facility is expected to start next year and be completed by 2014.

The development will likely be eligible for a subsidy by the federal government, which in March launched an incentive plan that offers cash grants for installations of at least 50kW.

However, despite its success in securing the Ningxia project rights, ReneSola – which is listed on the New York and London Stock Exchanges – is still expected to report losses in the third quarter of the year as a result of the falling solar cell prices that have impacted the industry this year.

Li told Reuters news agency yesterday that the company anticipates "a 60 to 70 per cent increase in revenues from the second to the third quarter, but we still need to absorb US$85 per kg of polysilicon inventory costs, and that will lead to losses".

ReneSola last week reported second quarter losses of US$3.6m. The company, along with many of its solar industry peers, has spent much of this year grappling with lower product demand, tight credit conditions and market oversupply.