First Solar and China Agree on 2 GW Solar Plant
First Solar has signed an ambitious memorandum of understanding (MOU) with the Chinese government to build a massive 2,000 megawatts PV solar farm in China’s inner Mongolia region. If fully developed, the Ordos solar project would be the world’s largest solar farm.
The agreement between First Solar and China underscores the falling price PV solutions. Most utility-scale solar plants use Concentrated Solar Power technology, which produce electricity by capturing solar heat to drive steam turbines or reciprocating engines that spin electric generators. Until now solar developers have avoided PV panels because they’re more expensive.
The Ordos project will be constructed over multiple years, with construction on an initial 30 megawatts demonstration project set to start in June next year. Then First Solar will add another 100 megawatts as part of a phase 2, another 870 megawatts as part of phase 3, and 1,000 megawatts as part of the final phase 4.
The project will operate under a feed-in tariff.
As expected such a massive project carries its own set of challenges. One is whether First Solar will be able to secure enough of the basic building blocks it needs to manufacture its PV panels.
Kevin Bullis at the Technology Review points out that First Solar’s cells use tellurium, a relatively rare element “which could limit the number [of panels] that can be built.” First Solar uses tellurium because it is able to manufacture tellurium-based panels at a significantly lower cost.
The other challenge is the cost of Ordos, which First Solar expects to hover around $5 billion to $6 billion. Will the Tempe, Ariz. company be able to secure the sort of debt financing required for this sort of undertaking?
Separately, First Solar announced today that it had secured a $300 million credit facility with J.P. Morgan Securities and Bank of America/Merrill Lynch serving as joint lead arrangers and book runners.
