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First Solar Sets Joint Venture in China
Published on: 2011-05-11
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BEIJING—U.S. solar-panel maker First Solar Inc. and China Power International New Energy Holding Ltd. said they will collaborate on solar-energy projects in China, the U.S. and elsewhere.

The arrangement helps First Solar gain access to China's solar sector amid shaky conditions in Europe, the world's leading solar market.

China Power "has a tremendous advantage and strength in operating in China, and we have a tremendous advantage and strength in technology but also in building utility systems," Kevin Berkemeyer, First Solar's China representative, said at a Tuesday news conference.

The companies will explore opportunities within China. First Solar also will assist China Power, a unit of China Power New Energy Development Co., to find investment opportunities in the U.S. and elsewhere. China Power has planned 2 gigawatts of projects for the domestic market. First Solar has 2.4 gigawatts planned in North America.

"We are very pleased to build an extensive and in-depth relationship with First Solar, a global leader in solar photovoltaic technology," said Li Xiaolin, China Power's chairwoman.

First Solar this week said that potential cuts in subsidies from budget-strapped European governments could reduce demand and prices for solar products. The company reported that first-quarter earnings fell 33% from a year earlier, citing higher costs, the Europe slowdown and 14% decline in prices for its panels.

Uncertainty over the future of European governments' feed-in tariff programs—special electricity rates that give renewable-energy companies higher returns than what they would get in the free market—are among the challenges facing solar companies in Europe. The continent accounted for more than 80% of all solar-panel demand last year.

"We're interested in diversification," TK Kallenbach, president of First Solar's Components Business Group, said Tuesday. "But we're also interested in working with countries to help them develop more sustainable long-term policies." He cited a series of "boom and bust" cycles in Europe in recent years in which unsustainable feed-in tariffs hampered solar-industry growth.

Solar-power companies increasingly are looking to China for growth.

The government recently has reiterated plans to cut reliance on imported fossil fuels to reduce pollution and because Beijing views the imports as a threat to national security. The government in March said it would set 15% as a target for use of renewable energy by 2020. Nonfossil fuels currently account for 8% of the country's energy use.

First Solar in January signed a memorandum of understanding with China Guangdong Nuclear Solar Energy Development Co. to build a solar plant in northern China's Inner Mongolia region. First Solar executives said Tuesday that negotiations continue but declined to say when construction would begin.

Soft demand in Europe also has prompted Chinese solar manufacturers such as Suntech Power Holdings Co. Inc., Trina Solar and Yingli Green Energy Holding Co. to focus on their home market.

Global demand for solar panels more than doubled last year to about 17 gigawatts, according to analysts, and is likely to reach 21 gigawatts next year.
 

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