Energy Conversion Devices, Inc. (ECD Ovonics) announced this week that United Solar Ovonic, its wholly owned subsidiary, has entered into an agreement to form a joint venture with Tianjin Jinneng Investment Company (TJIC) to establish a 30-megawatt (MW) photovoltaic (PV) module assembly facility in Tianjin, China.
The joint venture, to be owned 75% by United Solar Ovonic and 25% by TJIC, will assemble solar modules using solar cells supplied by United Solar Ovonic’s Michigan-based photovoltaic cell manufacturing facilities and is expected to begin operation in 2008. The joint venture will have nonexclusive rights to sell PV modules and systems in China. Sales outside China will be through United Solar Ovonic. The joint venture will also have certain rights to sell small products up to 32 watts outside of China.
Notwithstanding, the agreement is still subject to the approval of Chinese authorities. United Solar Ovonic's parent company, ECD Ovonics, recently accompanied U.S. Commerce Secretary Carlos M. Gutierrez on a Business Development Mission to China, and credits its participation in that mission as being instrumental in leading to the joint venture, so approval seems not to be a problem.
The companies have announced that the module assembly equipment is expected to be installed in mid-2008.
“China is a key market for American businesses, and I am pleased that United Solar Ovonic has formed a joint venture agreement with TJIC to establish a solar module assembly facility in China,” said Commerce Secretary Mr Gutierrez. "This unique alliance will encourage export of solar cells manufactured in the U.S. creating jobs for American workers, and is a tangible result from our trade mission last November. The trading relationship between U.S. businesses and Chinese companies is critical for both countries’ continued economic success.”
In a joint statement, James R. Metzger, Executive Vice President and Chief Operating Officer of ECD Ovonics, and Subhendu Guha, President and Chief Operating Officer of United Solar Ovonic, said, "The significance of this joint venture to us is two-fold. First, it provides us with a vehicle to access the rapidly expanding Chinese market, and second, it accelerates our cost-reduction initiatives through the establishment of assembly facilities in China, tapping the highly skilled and low-cost labor. We have been active in China for several years and are pleased to expand our activities and establish our first solar module assembly facility in China with TJIC, which has extensive knowledge and operating experience in the business environment in the Chinese market.”
The agreement will probably mark a benchmark for the industry, which aims at lowering the production costs in the coming years mainly through larger volumes. In this respect, Mr Yun Shang Tong, General Manager of TJIC explained how his company would take advantage of the Chinese Government's plan to increase the country's share of renewable electricity to 10% by 2020. This agreement is undoubtedly a good first step.
For additional information:
