US solar panel maker enters into 100-MW subcontracting agreement with Chinese firm

Evergreen Solar will reimburse Jiawei for its cell and panel conversion costs, plus subcontractor fee. The actual price paid to Jiawei will be negotiated annually. Photo courtesy of Evergreen Solar.

Massachusetts-based solar panel maker, Evergreen Solar, said yesterday [April 30] that it has entered into a frame agreement with a manufacturer of solar products in China for the expansion of its low-cost wafer manufacturing technology.

If finalized, the deal with Chinese OEM company, Jiawei Solar (Wuhan), would allow Evergreen Solar to add 100 megawatts (MW) of solar power capacity production annually using its proprietary silicon wafer making technology called String Ribbon.

Under the agreement, Evergreen Solar will use its manufacturing technology using its own Quad facilities at a leased facility being built in Wuhan, the capital of Hubei province in central China, in Jiawei’s site. Jiawei will also process String Ribbon wafers into Evergreen Solar-branded panels on a subcontractual basis.

The facility is expected to cost between $40 million to $50 million, with Evergreen Solar seeking financing for about two-thirds of it, or some $15 million to $20 million.

Evergreen Solar will reimburse Jiawei for its cell and panel conversion costs, plus subcontractor fee. The actual price paid to Jiawei will be negotiated annually. By 2012, production capacity is planned to reach approximately 500 MW.

The Wuhan government will work to have Evergreen Solar avail of government incentives, including guarantees for obtaining third-party bank or other financing.

The terms are set to be finalized within 90 days, as project financing is obtained and permits are processed. Production is planned in the second quarter of 2010.

“Combining our unique low-cost String Ribbon wafer manufacturing technology with Jiawei’s proven low-cost manufacturing capabilities will result in a compelling value proposition for our customers and the solar industry,” Evergreen Solar CEO Richard M. Feldt said, adding that total manufacturing costs will be in the range of $1.40-$1.50 per watt.

Evergreen Solar’s (NASDAQ GM:ESLR) patented wafer manufacturing technology reportedly uses less polysilicon than conventional processes.

Jiawei Solar (Wuhan) is a fully-integrated manufacturer of solar products serving OEM and ODM customers, including SunPower.


-  Eric Dorente

Source:

¹ http://www.evergreensolar.com/app/en/company/press/pressreleases/item/748