LDK plans to develop 500 MW of solar for Chinese city

Xinyu City, China’s LDK Solar (NYSE:LDK) said late today that it plans to partner with the city of Yancheng, China, to develop 500 megawatts of solar photovoltaic projects. 

Shares were up more than 5 percent in after-hours trading to $9.30.

LDK released few details, attributing the plans to the Chinese Ministry of Finance's $2.90-per-watt subsidy for installed solar that is expected to halve the cost for installations 50 kilowatts or more (see New solar subsidies in China set to reduce installed cost by half). In July, the central government announced the “Golden Sun” project to subsidize up to 70 percent of the costs of building solar farms with a total capacity of at least 500 MW by 2012, versus the country’s current capacity of 80 MW (see A-Power enters the solar market with $50M acquisition).

"We believe that an increasing number of PV application projects will originate in China in the future," LDK CEO Xiaofeng Peng said in a news release.

Chinese solar cell and panel maker Suntech Power Holdings also cited the subsidies in May as clearing the way for it to build a 1.5-MW grid-connected solar installation in Jiangsu Province (see Suntech kicks off largest solar project in Jiangsu). In July, Suntech entered into a strategic agreement with China Huadian New Energy Development to develop 500 MW of utility-scale and
commercial rooftop solar projects in Jiangsu and Shanghai (see Suntech, China Huadian New Energy partner on solar jobs).

Wafer manufacturer ReneSola said in May that the subsidies would partially fund a $23.4 million, 5-MW building-integrated photovoltaic solar project in Zhejiang Province (see ReneSola, Wuhan Rixin launch BIPV projects in China).

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