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Arizona firm in deal to spread sun power to China

First Solar signs a memorandum of understanding to build a 2,000-megawatt solar photovoltaic power plant in the Inner Mongolian desert. The project could supply enough power for 3 million homes.

September 09, 2009|Tiffany Hsu

The sun shines nearly everywhere, but alternative energy company First Solar Inc. is hoping those rays will be most profitable out in the far reaches of China.

The Arizona company signed a memorandum of understanding Tuesday with the city of Ordos to build a 2,000-megawatt solar photovoltaic power plant, said Michael J. Ahearn, First Solar's chairman and chief executive. The sprawling project in the Inner Mongolian desert would be the company's first in Asia and its largest outside the U.S.

Although current solar installations in China produce only 90 megawatts, the country's leaders recently decided that 10% of China's energy should come from renewable sources by 2010, and 15% by 2020.

Employing rows of thin-film photovoltaic panels, the Ordos plant could provide enough power for 3 million typical Chinese homes -- the equivalent of two large modern coal-fired power plants.

A 30-megawatt installation would be completed in June, while the 100-megawatt portion of the second phase and 870-megawatt third phase would be completed in 2014. The final, 1,000-megawatt portion will be done in 2019.

First Solar recently agreed to build two solar installations in Southern California totaling 550 megawatts, or enough to power 170,000 homes.

Not all of the Chinese deal's financial terms, such as the cost of the energy generated, have been determined, Ahearn said. A similar project in the Southwestern U.S. would cost $5 billion to $6 billion to build, he said.

The installation would be set up in the Ordos New Energy Industry Demonstration Zone, an 11,950-megawatt renewable energy park under development. When completed, the park would produce 6,950 megawatts of wind energy, 3,900 megawatts from photovoltaic power, 720 megawatts from concentrated solar power plants, 310 megawatts from biomass and 70 megawatts from hydroelectric generation.

At First Solar's Tempe headquarters Monday, company executives met with a Chinese delegation led by Wu Bangguo, chairman of the Standing Committee of the Chinese National People's Congress. The delegation also is scheduled to visit congressional leaders and representatives of the Obama administration in Washington.

China hopes to produce 2 gigawatts of solar energy by 2011 and 10 to 20 gigawatts by 2020, up from a previous goal of 1.8 gigawatts by 2020. The Chinese government also offers several incentives that helped attract First Solar, including subsidies of 50% to 70% for solar project investors.

In addition, First Solar plans to help develop production of thin-film photovoltaic modules in China, the company said. And because China is relatively new to the solar game, Ahearn anticipates using First Solar engineers for the first phase until local workers can be trained to build and operate the plant.

"China doesn't have much of a solar market to date, but looking to the future, it's going to be one of the largest energy markets in the world," Ahearn said. "We'd like to have a significant position in that market and view this deal as an entry. We hope it's the start of many more."


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