Huge solar power plant in China - First Solar & Chinese government MOU

First Solar today announced a memorandum of understanding (MOU) with the Chinese government to build a 2 gigawatt solar power plant in Ordos City, Inner Mongolia, China.

Pursuant to the MOU, signed in the presence of Chairman Wu Bangguo of the Standing Committee of the National People's Congress of China, the solar project in Ordos will be built over a multi-year period. Phase 1 will be a 30 megawatt demonstration project that will begin construction by June 1, 2010 and be completed as soon thereafter as practicable. Phases 2, 3 and 4 will be 100 megawatts, 870 megawatts, and 1,000 megawatts. Phases 2 and 3 will be completed in 2014 and Phase 4 will be completed by 2019.

"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," First Solar CEO Mike Ahearn said at the signing ceremony. "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 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 contemplates that during the implementation of the initial phases of the project First Solar will actively review 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 photovoltaic module production and for the recycling of photovoltaic 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 Zhiche, vice mayor of 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 of the parties concerning the project and related activities. Final agreement between the parties is subject to the negotiation and execution of definitive agreements among the parties.

Earlier this year, the Chinese Government announced the Golden Sun subsidies, covering up to 50% of large scale solar plants.

EDF and First Solar announce venture to build largest solar manufacturing plant in France

EDF Energies Nouvelles (EDF EN) and First Solar, Inc. (Nasdaq: FSLR) today announced a venture to build France's largest solar panel manufacturing plant. With an initial annual capacity of more than 100MWp, the plant will produce solar panels made with First Solar's advanced, thin-film photovoltaic technology. This new venture will support the recently announced goal of the French government to become a leader in sustainable energy technologies including solar electricity. At full production, projected for the second half of 2011, the plant will employ more than 300 people.

Under the terms of the arrangement, First Solar will build and operate the plant in France. The plant represents an expected investment of more than EUR 90 million. The initial annualized capacity of the plant is expected to exceed 100MWp, making it the largest manufacturing facility for solar panels in France. EDF Energies Nouvelles has agreed to finance half of the capital expense and plant start-up costs and will benefit from the plant's entire output for the first 10 years. First Solar and EDF EN intend to announce their decision on the site location within the next few months.

The investment decision was announced in the presence of French Sustainable Development Minister Jean-Louis Borloo. "I salute the decision of EDF Energies Nouvelles and First Solar to invest and create jobs in France's solar sector, which has begun to take off since the Grenelle de l'Environnement," he said. "This investment represents a veritable turning point for the photovoltaic industry and confirms that France is more than ever in a position to play a leading role globally."

Pâris Mouratoglou, Chairman of the Board of EDF Energies Nouvelles, said, "This agreement represents a key milestone in the strategy of our group, which has the ambition to be a global leader in solar energy." The company successfully raised EUR 500 million last year to finance its expansion in the photovoltaic sector. It has set itself a target of installing 500MWp in photovoltaic capacity for its own account by 2012. "Securing a competitive supply is essential for us to participate in the development of a large French solar market," he said.

"We have successfully built a number of projects with First Solar panels. This strategic agreement is the result of a relationship built on trust and offers our two groups solid and promising potential," he said.

Mike Ahearn, Chairman and Chief Executive Officer of First Solar, said, "The decision to invest in France reflects our firm belief in the French market and its great potential. It represents a vote of confidence in the policies being developed by the French government since the Grenelle de l'Environnement to promote renewable energies and allow solar electricity to compete economically with other forms of energy."

"This decision by First Solar and EDF EN is a sign of our shared commitment to the future of solar electricity," Mr. Ahearn said. "We commend President Nicolas Sarkozy's leadership in promoting long-term policies to build a more sustainable energy future not just for France but the world. Countries that create market frameworks that enable solar and other renewable energies to achieve commercial scale will reap the greatest benefits in private sector investment, technological innovation and job creation." The long-term commitments of the French Government to provide the policy and regulatory frameworks that enable robust solar markets and of EDF EN to invest in developing and expanding the French market were key factors in our decision to invest in France, he said.

First Solar's manufacturing site will also include a facility for recycling solar panels, France's first such facility and Europe's only solar panel recycling plant outside of Germany.