China may be the solar manufacturing hub of the world, but
it’s not a place where U.S companies have set up production lines. But
Colorado-based Ascent Solar Technologies is doing just that and announced Thursday a joint venture with a local government to build a large solar panel factory.
Ascent said it plans to build a 100-megawatt factory and
will enjoy quite a bit of financial help from its partner, the city of
Suqian in the Jiangsu Province on the east coast. The factory would
shorten the distance for Ascent to ship its products to some of its
suppliers and customers.
Here is what Suqian has committed to contribute to the joint
venture: $32.5 million in cash and a use of 331,000 square feet of
factory and office space free of rent for five years. Ascent also will
get tax rebates, a 5-year corporate tax break and free housing for up to
three years for the researchers, engineers and executives that are part
of the joint venture. The company announced its intention to form the
joint venture last July.
The factory is noteworthy because very few American solar
manufacturers have set up production in China, which is home to some of
the world’s largest solar cell and panel makers. It cemented its dominance over the last seven years as its manufactures built massive factories that contributed to an oversupply in recent years and several bitter trade disputes with U.S and European rivals over government subsidies and price-setting practices.
American solar manufacturers have cited intellectual
property protection and a reluctance to compete with Chinese rivals as
reasons for not wanting to build factories in China. But a few have done
it. Massachusetts-based Evergreen Solar set up a silicon wafer factory
in China and hired a local manufacturer to turn those wafers into cells.
It was a big restructuring effort that didn’t save the company, though,
and Evergreen filed for bankruptcy in August 2011. DuPont set up solar panel production in China in 2009. A California startup, Silevo, has its research and development team in the U.S. and manufacturing in China.
Ascent, which makes its solar panels in its U.S. factory and
has struggled to make a profit, said the 100-megawatt project in China
will be built over 6 years, and the first 25 megawatts of production
line is set for completion by the first quarter of 2016. The company’s
tie to China isn’t new, though. A joint venture of a Chinese
construction company and a Singapore investment firm owns about 29% of
Ascent”s common stock as of last September, according to a filing with the U.S. Securities and Exchange Commission.
Unlike major Chinese manufacturers, Ascent isn’t making
solar panels using silicon to convert sunlight into electricity. It uses
a compound of copper, indium, gallium and selenium (CIGS), a type of
technology that used to draw a lot of venture capital investments but
hasn’t fulfilled its promise as a serious competitor to the silicon
technology. If anything, many CIGS startups have fizzled
because they took too long to get the technology right or their market
timing was off — trying to enter the market when there was an oversupply
of cheap solar panels was a horrible idea.
Ascent seems to have managed to carve out a market for its
flexible CIGS panels for charging consumer electronics or for off-grid
equipment. It’s targeting what many solar panel makers consider niche
market segments that aren’t worth their efforts. Most solar panel
makers, whether they use silicon, CIGS or other materials, have aimed
for selling solar panels for residential and commercial rooftops and for
power plant projects that sell electricity to utilities.
Initially, Ascent will own a 25% stake in its joint venture
with Suqian, but it plans to increase its holding to up to 80% over
time. It also plans to buy the factory within five years. Whether Ascent
will complete the factory plan remains to be seen, not the least
because it’s been posting big quarterly losses. It reported $274,800 in
revenue and $10.14 million in losses for the third quarter of 2013.
http://www.forbes.com/sites/uciliawang/2014/01/02/a-u-s-solar-maker-makes-a-rare-move-setting-up-factory-in-china/?ss=business%3Aenergy
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