Ascent Solar Technologies has signed a joint venture (JV) agreement with the Government of the Municipal City of Suqian in Jiangsu Province, China to construct a new 100MW PV manufacturing facility.
To be constructed over six years, the facility will produce Ascent Solar’s thin-film copper-indium-gallium-selenium (CIGS) PV modules on flexible polyimide and related consumer products.
Under the agreement, the city will provide around $32.5m in cash, plus five-year rent-free use of an around 331,000sqft factory and office building in the Suqian Economic and Industrial Development Science Park.
The agreement also provides the opportunity for Ascent Solar to purchase the factory within five years at the initial construction cost, and purchase Suqian’s ownership interest in the JV after five years at 1.5 times of Suqian’s cash cost.
The Suqian municipal government and Ascent Solar will initially set up a JV with a cash investment of around $4.8m (75%) and around $1.6m (25%), respectively.
Under the definitive agreement, Suqian will further inject the remainder of the committed $32.5m in 2014, while Ascent Solar will provide its CIGS technology and certain equipment from its Colorado facility, ultimately increasing its stake up to 80% of the JV.
The JV is likely to begin operations of the end-to-end manufacturing plant of 25MW and related consumer products by the first quarter of 2016, while operating the facility at full capacity is likely to take some more years.
As part of the deal, Suqian is offering a package of incentives including a five-year corporate tax holiday and a further 50% tax rebate over the next five years.
Suqian will also provide a full rebate of value-added tax for the first two years and then a 50% rebate for the subsequent three years and provide free accommodation for key scientists, engineers and managers of the JV for up to three years.
Ascent Solar president and CEO Victor Lee said "This partnership enables us to accelerate our transformational consumer-centric strategy with the EnerPlex consumer brand and specialty off-grid applications given China’s huge and growing consumer base and readily available contract manufacturers."