The parties anticipates to finalize the terms of the manufacturing relationship more than next 90 days, including obtaining project financing and other approvals and permits, and plan to start production in the second quarter of 2010.
As per the agreement:
Jiawei Solar will process string ribbon wafers into Evergreen Solar panels on a subcontract basis.
Evergreen Solar will reimburse Jiawei Solar for its cell and panel conversion costs, plus subcontractor fee. The actual price paid to Jiawei Solar will be negotiated every year.
The Wuhan government provides or coordinates with other Chinese governmental agencies, different incentives, including guarantees required to get third-party bank or other financing.
Initial capacity is anticipated to be around 100 megawatt (MW) and the parties plan to expand production capacity to around 500 MW by 2012, the timing and extent of which will be decided in 2010.
The establishment of Evergreen Solar’s wafer production facility and the subcontractor relationship with Jiawei Solar remains subject to the satisfaction of certain conditions, including financing, various import/export and construction permits and the negotiation of definitive agreements between Evergreen Solar and Jiawei Solar.
“We are thrilled about our new relationship with Jiawei and the support that we are receiving from the Wuhan Management Committee, said Richard M. Feldt, chairman, chief executive officer and president. The cost of our 100 MW wafer facility will be between $40 million and $50 million and we will seek financing for about two thirds of that amount, reducing our portion of initial capital required to around $15 million to $20 million.”
“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. At full capacity of about 25 MW per quarter by the end of 2010, we expect that total manufacturing cost of String Ribbon panels produced in China, including Jiawei’s subcontractor fee, will be in the range of $1.40 per watt to $1.50 per watt. As the price of silicon returns to its historic level of about $50 per kilogram and as both companies work together to improve technologies and reduce manufacturing costs, we believe that total manufacturing cost could be reduced to approximately $1.00 per watt by the end of 2012,” Feldt concluded.
