Yingli, Longjitaih partner on new 600MW solar cell maker

The Longjitaihe Industry Group has invested RMB 4.2 billion ($627 million) in a new joint venture with the Yingli Group to make multicrystalline silicon solar cells.

Guangwei Green Energy in Gaobeidian, Hebei Province, China, has a planned production capacity of 600 megawatts a year.

The first phase of the plant is expected to begin operating in September, with a production capacity of 300 MW a year. The first phase is expected to generate revenue of RMB 7.5 billion ($1.12 billion) and create 5,000 jobs.

Construction started last week on the 66.7-hectare (164.8-acre) site.

Longjitaihe has contributed RMB 4.2 billion, while Yingli Group, the parent company of Baoding, China-based Yingli Green Energy Holding (NYSE:YGE), plans to manage the project for two years. Yingli also plans to help with product development, the purchase of raw materials, and sales.

Yingli has proven to be one of the success stories in recent months as many other China-based solar manufacturers have faced bankruptcies or lower revenues because of oversupply (see China solar market in late 2009 spells glut, Bankruptcies start to plague Chinese solar and Bad news from Q-Cells spreads through solar supply chain).

China has around 140 solar-grade crystalline silicon wafer makers. Estimates are that the wafer industry is now operating at half its capacity because of factory shutdowns in February (see Is this the end of China's solar boom?).

Polysilicon hit a peak of $400 per kilogram in July 2008, falling to less than $100 at the end of the year. Polysilicon is now trading for $30 to $40 per kilogram and is likely to continue dropping (see Top Chinese firms propose solar electricity for 14¢ per kWh).

But in December, Yingli said it was maintaining its 2009 outlook, forecasting shipments of between 550 and 600 megawatts of solar cells and a gross margin of at least 24 percent (see China Sunergy, Yingli announce supply deals amid sector turmoil). Yingli said the estimates took into account the expected polysilicon prices, lower prices for photovoltaic modules, and depreciation of the euro against the U.S. dollar (see Dollar's strength hurts SunPower).

Also in December, Yingli said it signed another deal with IBC Solar, this time supplying 91 MW of modules from now through December 2009 (see Yingli begins production of 200 MW expansion).

Cleantech developments making news in the past 24 hours

• AES raises $1.58B with China Investment
• Patently unobvious

View the last week of cleantech developments here | Subscribe to full feed