San Francisco, California [RenewableEnergyAccess.com] Photovoltaic cell and module manufacturer, Suntech Power Holdings Co., Ltd., yesterday announced that it has entered into a definitive contract with Asia Silicon Co., Ltd. to purchase high purity polysilicon from Asia Silicon with a total value of up to $1.5 billion over a seven-year period.
The polysilicon supplied by this agreement during the seven-year period is subject to the acceptance of product deliveries and other conditions. The contract provides for the delivery of a volume range of polysilicon each year at fixed prices, using a take-or-pay approach, with delivery beginning in the second half of 2008. A predetermined annual price reduction curve will provide Suntech with high purity polysilicon at prices lower than any of Suntech’s other contracts.
”This contract with Asia Silicon will form a critical element of Suntech’s polysilicon supply portfolio as the average price paid under the contract is so low that we believe that it reflects what is essentially grid parity pricing for Suntech…we believe that this is truly transformational, with the price decreasing to substantially below $40 per kilogram,” said Dr. Zhengrong Shi, Suntech’s Chairman and CEO.
Asia Silicon is in the process of building a state-of-the-art polysilicon plant in Qinghai, China with polysilicon production capacity targets of 2,000 metric tons by July of 2008 and over 6,000 metric tons by the end of 2010.
The polysilicon plant will utilize the low-risk, well-proven trichlorosilane-based advanced Siemens production process and the company says it has already achieved impressive milestones in its development. Plant design started early last year and orders for equipment and engineering services from industry leading vendors including GT Solar Incorporated, Centrotherm GmbH/SiQ GmbH/Solmic GmbH, and Chemical Design, Inc. have been in the pipeline for almost a year.