First Solar (FSLR) To Build World’s Largest Solar Plant In China

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03:32:15 pm on September 8, 2009

OK, it’s not quite a done deal yet, but First Solar (FSLR) has signed a memorandum of understanding with China to build the world’s largest solar power plant in the desert of Inner Mongolia (Ordos City).  The 2GW plant would be completed in phases over the next 10 years with a 30MW demo project to begin next summer, a 100MW and 870MW project to be completed by 2014 and the final 1000MW phase to be completed by 2019.  A deal like this certainly doesn’t mean much to First Solar in revenues right away, but it’s a big vote of confidence by China and could lead to additional deals in the coming years.  They made a big splash into the French market a couple months ago and this is just as big a splash into the China market. 

The project is part of the Ordos New Energy Industry Demonstration Zone, a 11,950-megawatt renewable energy park under development.  When FSLR’s portion is completed, it’s expected to power up to 3 million homes which is the equivalent of two, large coal fired plants.

Financials and other details have yet to be worked out but First Solar CEO Michael Ahearn said the project will operate under a feed-in-tariff which guarantees the pricing of electricity produced by the solar plant over the long haul and will help to achieve the ultimate goal of solar power – grid parity.

Shares of First Solar (FSLR) traded up over 10% today with heavy volume and are poised to attack resistance around the 140 level.  A break above the 140 level would be significantly bullish for the stocks.

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