Suntech Power Holdings Co., Ltd. (NYSE: STP), a leading manufacturer of photovoltaic (PV) cells and modules, has signed a contract to secure $1.5 billion of silicon over seven years.
Asia Silicon Co., Ltd. will begin delivering the silicon in the second half of 2008. A predetermined annual price reduction curve will provide Suntech with 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, when combined with our high efficiency solar cells and world class low cost of production,” said Dr. Zhengrong Shi, Suntech CEO.
“We believe this is truly transformational, with the price decreasing to substantially below $40 per kilogram, as it enables Suntech to be at the forefront of leading the solar industry towards an environment without government subsidies or incentives.”
Asia Silicon is 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. Up to 80% of electricity used in the plant will be supplied from low cost hydropower sources.
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