First Solar takes step closer to delayed China solar project

US utility First Solar's plan to build 2 GW of solar power plants in China’s Inner Mongolia has moved ahead after it signed a memorandum of understanding with China Guangdong Nuclear Solar Energy Development Company to develop the first phase, a 30 MW project.
 
First Solar will supply its cadmium-telluride solar panels to China Guangdong for the engineering and construction – as well as the operation and maintenance – of the power plant, First Solar said.
 
The company is working on finalizing details of the project and hoping to get approval to start construction in 2011, said First Solar spokesman, Alan Bernheimer, via an email, reported Reuters. Completion will then be set for 2012.
 
Previously, First Solar had hoped to start construction by June 2010 on the project. The company signed an MOU for the 2 GW master plan in September 2009, as well as a framework agreement with Ordos officials in November of that year to further outline the scope of the overall project.
 
But June 2010 came and went, and the construction work had not started on the 30 MW project. Government approval of key steps of the project was to blame. The Chinese government was supposed to approve solar electricity pricing for the project by the end of 2009, but didn’t. Without guaranteed solar electric rates, or feed-in tariffs, First Solar didn’t want to move ahead as quickly.
 
The Chinese government approved a pre-feasibility study for the 30 MW project last September, First Solar said. But it still doesn’t appear that the pricing issue has been resolved. A First Solar executive told the AP in Beijing on Wednesday that First Solar and China Guangdong will submit a business plan to the government in order to ask for feed-in tariffs.
 
Bernheimer confirmed that the project has yet to receive feed-in tariffs. He said: “An appropriately set national feed-in-tariff structure would allow market participants to secure a reasonable rate of return to make further investment in technology and cost reductions. 
 
"In our view this is critical to the development of a sustainable and long-term solar market in China, just as it is in other countries. First Solar’s mission, however, is to help drive the transition towards sustainable energy markets free of subsidies."
 
Initially, First Solar had hoped to complete phase 2 and 3 of the project, totaling 970 MW, by 2014. It wanted to finish the last phase of 1 GW by 2019. First Solar describes its agreement with Ordos as “the first large-scale solar collaboration between China and the United States and an example of China-US bilateral cooperation on renewable energy.”
 
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