Long-term solar wafer contracts continue to cause trouble in the industry, even though many suppliers have accommodated price and quantity revisions as the sector has seen significant price reductions in polysilicon due to overcapacity. However, a new dispute has emerged between REC and India’s Moser Baer Photo Voltaic. According to a statement from REC, Moser Baer has terminated an 8-year contract with them, which was initially signed in mid-2007. REC has called upon bank guarantees and has US$36.5 million worth of receivables outstanding towards Moser Baer with the total bank guarantees amounting to US$85 million.
According to REC, Moser Baer terminated the contract, due to alleged quality issues. REC is pursuing legal proceedings against the company for the contract termination.
Contract volumes were scheduled to increase over time to a peak at around 60MW per year, REC noted.