Q-Cells SE and MEMC Electronic Materials have revealed the formation of a joint venture to construct extremely large solar parks, in which each partner will have a 50% share. The first shared project will be a facility in Strasskirchen, Bavaria.
Q-Cells International has been commissioned to construct the first facility, which will have a total capacity of around 50MWp, making it the largest ground-mounted PV system in Germany to be operated using crystalline solar cell technology.
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Dr. Marko Schulz, member of the executive board of Q-Cells and the person in charge of Q-Cells International’s project business, says, “Strasskirchen represents a new dimension for us and we are proving that we are able to achieve very high quality in a record-short time”.
The project will use approximately 225,000 modules, installed on a surface area of around 135 hectares. The amount of electricity produced by this plant corresponds to the power consumption of 15,000 households, thereby eliminating around 35,000 tons of CO2 each year.
Ken Hannah, MEMC’s SVP/CFO, has said that under the terms of the agreement, MEMC will invest up to $100 million of capital in the joint venture during the third and fourth quarters of this year. Q-Cells is expected to invest around $100m so that the two partners can cover the bridging finance during the construction phase.
“We feel that we can participate in this area by choosing the right partners and helping to accelerate overall solar market growth (…) our investment is enabling one or more projects to precede that have stalled due to lack of financing,” continued Hannah.
When completed, this facility is intended to be sold to a third party. The joint venture will be accounted for under the equity method of accounting. As MEMC sells wafers to Q-Cells, the revenue from those sales will be recognized consistent with the MEMC’s revenue recognition policy, and the cost associated with those wafers will be included in cost of goods sold.
MEMC will however defer its pro rata share of the net profit associated with the sale of the wafers, consistent with its ownership in the joint venture, until the project is sold to a third party, at which point previously deferred amounts will be recognized as income, as well as any gains or losses in the sales of the project.
The facility is expected to be complete and connected to the public electricity network at the end of 2009.
