Solar module producer Q-Cells AG (QCE; WKN 555866) made several significant announcements this week.
Investment in REC
Q-Cells announced it will acquire 17.9 % of the share capital (88,456,767 shares) in REC Renewable Energy Corporation ASA, Høvik, Norway, from Good Energies.
REC Renewable Energy Corporation is one of the world’s largest manufacturers of polycrystalline silicon and silicon wafers for the production of solar cells. REC has been a d key supplier to Q-Cells since the company’s start-up.
The investment will further strengthen Q-Cells AG’s relationship with REC, which not only covers long term supply agreements, but also Q-Cells joint ventures with EverQ GmbH and CSG Solar AG joint ventures.
In connection with this purchase of shares, Good Energies is to increase its investment in Q-Cells. As part of a non-cash capital increase, Q-Cells will issue 34,323,579 new shares to Good Energies. Good Energies will then hold 29.9% of the voting rights in Q-Cells.
Silicon wafers from LDK
Q-Cells also announced that it signed a supply agreement for silicon wafers with the Chinese solar company LDK Solar Co., Ltd. The agreement is a ten-year "take or pay" contract covering the period from 2009 to 2018.
Q-Cells says total volume will enable it to manufacture cells with an overall output of more than 6 gigawatt peak (GWp) additional to current expansion plans. Deliveries will start with 1,000 tons in 2009 and will rise to 5,000 tons by 2013, according to a release.
The pricing of the wafers has some fixed and market related elements for 2009 and 2010, and thereafter the fixed pricing element can be adjusted to market conditions. Q-Cells has the option to purchase 30% of LDK’s additional silicon production if LDK expands its production capacity.
Silicon supply from Elkem Solar
Q-Cells also signed a long-term supply agreement with Elkem Solar, a member of Norway’s Orkla Group, for supplies of silicon needed for Q-Cells’ core business growth through 2018, the company said.
Under the terms of the agreement, Elkem Solar will supply Q-Cells AG with contractually fixed quantities of metallurgical silicon starting in 2008. In addition to a base volume of 800 tons in 2008, 2,800 tons in 2009 and 2,400 tons per year from 2010 to 2018, Q-Cells AG has an option to procure an additional quantity of up to 1,600 tons in 2010 and between 2,500 and 5,000 tons per year during the remaining years of the agreement, according to a release.
The total quantities of silicon to be supplied under the agreement are expected to be sufficient to manufacture over 10 GWp of solar cells, the company said.
The prices paid for the silicon are based on market prices. Prices for 2008 and 2009 are fixed, and for 2010 and 2011 50% of the price is on a fixed basis and 50% will be floating, depending on the respective prevailing market price. From 2012, Q-Cells will pay a floating market price that will be agreed each year.
About metallurgical silicon
By conducting extensive tests on the manufacture of ingots, wafers and solar cells, Q-Cells says it has confirmed that the material supplied by Elkem Solar–to be industrialized on a large scale–can achieve efficiencies and yield levels equivalent to high-purity polycrystalline silicon, which is manufactured using a much more expensive and complex process.
In order to produce silicon wafers and solar cells, the metallurgical material must currently be mixed with high-purity polycrystalline silicon. Q-Cells says it has been shown in test series that the material can be used without mixing for production of solar cells with limited process and product adjustments.
According to a company release, the goal is to increase the mixing ratio, which will initially be up to 50%, to reach 100% pure metallurgical silicon in the medium term. The metallurgical silicon will make a major contribution to overcoming the continuing shortage of silicon over the long term, thus cutting the cost of photovoltaics.
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