TEMPE, Ariz. (
) -- If things go according to plan,
will be going big in China -- real big.
According to a press release today, the U.S.-based thin-film solar module operation entered into an early-stage deal with the Chinese government to orchestrate and build what
The Associated Press
and others say could be the world's biggest photovoltaic project thus far. The "memorandum of understanding" struck between First Solar and the government calls for the creation of a 2,000-megawatt solar power plant in Inner Mongolia -- or enough to power 3 million homes, according to reports.
It appears that investors liked the news, as First Solar shares were soaring $8.78, or 7.2%, at $130.25 in the afternoon.
The agreement contemplates a 10-year window till the project's completion in 2019, with construction to be executed in four phases. The first phase calls for a 30-megawatt demonstration, which is to begin building next June.
Still, like a great many solar announcements these days, the tentative agreement is thin on details. Financials and regulatory issues have yet to be finalized. First Solar's release says the project will work under a feed-in tariff, which provides a fixed price guarantee for produced power over a period of time and which CEO Mike Ahearn called "critical" to the project in a statement.
"This type of forward-looking government policy is necessary to create a strong solar market and facilitate the construction of a project of this size, which in turn continues to drive the cost of solar electricity closer to 'grid parity' where it is competitive with traditional energy sources," he said.
The country has yet to determine the size of the tariff. Therefore, it's too early to estimate First Solar's take from the project.
Still, Ahearn called it a "precedent-setting" project. "This major commitment to solar power is a direct result of the progressive energy policies being adopted in China to create a sustainable, long-term market for solar and a low carbon future for China," he said.
Almost all of the major solar operations were making big moves in positive territory today along with the rest of the energy sector.
Yingli Green Energy
were surging by 6.1%, 7.5% and 6.9%, respectively.
American depositary shares for
were also moving higher, by 5.9%, in the afternoon, following news of a new
$304 million loan facility.
-- Written by Sung Moss in New York
Follow TheStreet.com on
and become a fan on
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. The AP contributed to this report.