LDK Solar (NYSE: LDK)has signed a two-year polysilicon supply agreement with BYD Company Limited (1211.HK; BYDDF.PK) that is valued at approximately $300 million.
BYD is a China-based enterprise specializing in IT, automobiles and green energy that is 10% owned by Berkshire Hathaway (BRK.A, BRK.B). Under terms of the agreement, LDK Solar will supply polysilicon with monthly shipments expected to commence in January 2011 and extend through the end of 2012.
A deposit for this two-year contract has already been received, LDK said in a release.
BYD is moving into solar with a vertically integrated manufacturing model. It began building a massive $3.3 billion, 5-gigawatts (GW) plant in 2009 to produce its own polysilicon. That facility is expected to be completed in 2015. The company claims its proprietary production process can cut polysilicon costs in half.
In September, The Los Angeles Department of Water and Power (LADWP) formed a partnership with BYD to develop a grid-scale battery project for renewable energy storage.
In May, BYD announced it will locate its North American headquarters in Los Angeles and begin selling small, all-electric hatchbacks in 2011.