First Solar Faces Delay on China Plans Over Prices, Sohn Says
May 19 (Bloomberg) -- China delayed the approval of preferential tariff rates for solar electricity that First Solar Inc. says are essential for the viability of its photovoltaic solar plant in Inner Mongolia, President Bruce Sohn said.
Sohn said he expects the so-called feed-in tariffs to be approved by the Chinese government later in the summer after a national bidding process is conducted for other solar projects.
“We’re missing a key area: clarity about what the price per kilowatt hour will be,” Sohn said in an interview in Shanghai. The agreement the company signed with the Chinese government last year called for rates to be set by the end of 2009, he said.
First Solar, the world’s largest maker of thin-film solar power modules, is trying to build a 2,000-megawatt plant in Ordos, Mongolia, that would be the world’s biggest such facility. The Tempe, Arizona-based company planned to begin its first phase of operations in June.
Sohn said he is going to meet with officials from the National Development and Reform Commission in Beijing this week to discuss this issue, as part of a U.S. trade mission being led by U.S. Commerce Secretary Gary Locke.
The issue of the power rates will be “critical to this project,” First Solar Chairman Mike Ahearn said in September. The tariff would give the company higher rates for electricity than coal or other traditional sources of electricity. One megawatt is enough to power about 800 U.S. homes, and last year there were 7,000 megawatts of solar energy produced in total worldwide, Sohn said.
First Solar fell $3.11, or 2.8 percent, to $110.06 in Nasdaq Stock Market composite trading yesterday. First Solar shares have fallen 18.7 percent this year.
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