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Emcore and San’an Optoelectronics Company have come together for an investment and cooperation agreement with the Huainan municipal government. Under the agreement, Emcore and San’an will register and operate their joint venture (JV), Suncore Photovoltaics, in Huainan City for the production of CPV components and systems for terrestrial solar power applications.
The Suncore joint venture was formally announced by the two companies earlier this year and had specified Wuhu City, Anhui province of China to be the site for the JV’s manufacturing facility. However, the new Huainan location has been agreed upon by the companies since it is expected to more easily allow for construction and operations to begin at an earlier date as well provide more economic incentives.
Under the agreement, Suncore’s engineering, manufacturing and distribution for CPV components and systems will be based in the Economic and Technology Development Zone of Huainan City, China, where Suncore is expected to produce 1,000MW of manufacturing capacity over the next five years. Of that capacity, 200MW should be ready by the end of 2011, 300MW ready by the end of 2013 and the outstanding 50MW ready by the end of 2015.
In an effort to help Suncore begin its operations, Huainan has provided the JV with a 263 acre land grant, extended tax holiday, other financial incentives and the promise of giving Suncore US$75 million within three days after construction on the Huainan-based facility starts. The money is expected to be solely used for capital equipment purchases.
Suncore plans for the total capital expenditure and working capital investment to be around US$1.2 billion. Additionally, Huainan has agreed to give a US$0.21 cash rebate to Suncore for every watt of CPV systems made in the city and sold in China.
"China is viewed as one of the most promising markets for CPV solar power," said Dr. Hong Q. Hou, president and CEO of Emcore. "This Agreement demonstrates Huainan's strategy and commitment to the growth of its renewable energy industry. These financial incentives will accelerate the commercialization of Emcore's CPV technology and production ramp. We believe that this investment by Huainan and the establishment of Suncore's low cost manufacturing operation will enable our CPV technology to become a cost effective solution for commercial and power utility applications," added Dr. Hou.
Emcore and San’an are looking to start construction in early 2011 and are actively engaged in securing Suncore’s business registration in Huainan.