LDK to supply Q-Cells with polysilicon solar wafers in 10-year deal

NEW YORK — Solar energy product maker LDK Solar Co. said Monday December 10/07 it has entered a 10-year contract with Q-Cells AG, which will make prepayments to finance LDK's expansion.

LDK will deliver solar wafers with more than 6 gigawatts of annual generating capacity to Q-Cells from 2009 through 2018. LDK will use supplies from its polysilicon plant that is currently under construction, or other sources.

In return, Q-Cells will prepay 10 percent of the silicon value to fund LDK's expansion. The German solar-cell maker also has the option to purchase 30 percent of LDK's production if LDK expands its wafer capacity. The companies did not provide a specific sum of the prepayment.

A one-megawatt plant running continuously at full capacity can power 778 households each year, according to the U.S. Department of Energy. One gigawatt is equal to 1,000 megawatts. Solar technology has lower capacity since its ability to generate power is constrained by availability of the sun.

Annual deliveries will start with 1,000 metric tons in 2009 and rise to 5,000 metric tons by 2013. Pricing of the wafers is partly fixed and partly market-related for 2009 and 2010. Pricing will then be adjusted to market conditions.

Q-Cells said the agreement will allow it to grow more rapidly from 2009 than previously planned.

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