Prime Solar announces $700m German silicon wafer plan

Little known South Perth-based Prime Solar Pty Ltd has announced plans to establish a manufacturing facility in Germany to produce 680 MW per annum silicon wafers with an estimated project cost of $700 million.

Mr Joseph Alexander, CFO of Prime Solar said that "the company is currently raising capital for the first phase of 50 MW per annum wafers manufacturing project".

The facility will operate 24 hours a day and offer over 1,000 full time employment opportunities.

The company, established on February 1 this year, has already announced that it has started preparations for a photovoltaic project at Perenjori, 348 kilometres north-east of Perth, capable of producing up to two megawatts of power for the small community.

That project is estimated to cost between $14 million and $18 million, with a final figure depending on the last stage of design.

The silicon wafers to be produced in Germany are commonly known as silicon chips are the base components for the fabrication of solar cells and the wafers produced by Prime Solar will be used in the manufacture of silicon solar cells by Q-Cells of Germany.

"The first phase of the project of 50 MW per annum capacity will be set up at Thalheim, Germany's "Solar Valley" approximately 50 km North of Leipzig in 2006-07 with a total project cost of $60 million", said John Carstairs, chairman of Prime Solar and a former director of CBH Group.

Prime Solar said the German Government has welcomed the initiative and will provide up to 45% non-refundable grants.
Negotiations are being held with the Commerzbank for debt funding and working capital.
Prime Solar has recently entered into an agreement with Q-Cells to supply up to 100% of its wafer production for ten years.
Q-Cells is the world's second largest manufacturer of mono and multicrystalline solar cells.
In 2005, Q-Cells produced 165.7 MW of solar cells.
This represents an incredible 118% increase over the 75.9 MW solar cells manufactured the year before.
The crystalline solar cells technology enjoys world dominance as 93.5% of the global solar cells production in 2005 was manufactured using mono and multicrystalline silicon wafers.
The combined share of various thin film technologies has shrunk from 17.1% in 1999 to 6.5% in 2006.
A total 81,000 m2 of land has been earmarked for Prime Solar at the Micro Technology Park at Thalheim just next to the manufacturing facility of Q-Cells.
The land will be sufficient to accommodate all the expansion requirements of Prime Solar until 2014.
The factory will be ultra-modern and will use the latest wafers manufacturing equipment with as much automation as possible to reduce the breakage of the wafers.
By the setting up of this facility at Thalheim, Prime Solar will become a leading manufacturer of silicon wafers in the world.
Even though the investment cost and the price per kilowatt (kW) for solar energy are often higher than the traditional energy sources, solar energy has other advantages that make it an attractive energy source, including negligible operational and maintenance cost and significant environmental benefits.
Combined with the above factors, solar PV production has increased to 1,818 MW in 2005.
This is a substantial 45% increase compared to the Prime Solar Pty Ltd 2 1,256 MW output in 2004.
Although, lower than the 67% jump the year before, it is well beyond the 34% that market grew in 2003 and the 40% gain 2002.
"This growth pattern is expected to continue as demand continues to increase.
According to Deutsche Bank Research of 2005, in Germany alone the growth in new installations is expected to average around 40% per annum for the period from 2004 through 2010", Dr Dilawar Singh, Managing Director and CEO of Prime Solar said.
The starting material to manufacture silicon wafers is chunks or granules of chemically ultra-pure polycrystalline silicon, of purity close to that required by the semiconductor industry.
The solar industry has historically taken off-specification material that is rejected by the semiconductor industry, however, in recent years due to the over stripping of the silicon demand of the semiconductor industry by the solar PV industry, polysilicon is being used directly by the manufacturers of the wafers and hence polysilicon has become a scarce commodity, however, Prime Solar is in the process of securing polysilicon supply.
In order to secure a long-term polysilicon supply for its wafers manufacturing facility, Prime Solar is currently investigating a new process to manufacture solar grade silicon that will have 99.9999% purity and will use locally available metallurgical grade silicon.
A new subsidiary company named Prime Solar Silicon will be created soon to undertake solar grade silicon manufacturing project in Western Australia.
Prime Solar has also started its first subsidiary company, Prime Solar Power Pty Ltd, to design, develop and own large-scale solar power generation projects.
This new entity has commenced work to undertake a 2 MW solar photovoltaic fringe-of-the-grid project at Perenjori, 350 km North of Perth and another 10 MW Solar Park project at Perth.
By adopting such an integrated approach, Prime Solar's aim is to become a leading solar photovoltaic company having its manufacturing ranging from solar grade silicon through to solar photovoltaic modules, and system integration and project development of large-scale power generation projects.
"Prime Solar has negotiated 35% buy back of solar cells from Q-Cells for use in its solar photovoltaic modules manufacturing facility which will commence operations in 2008", said Mr Harsh Grover, Chief Operating Officer of Prime Solar Pty Ltd.
Mr Joseph Alexander, CFO of Prime Solar said that "the company is currently raising capital for the first phase of 50 MW per annum wafers manufacturing project".
Prime Solar's strength lies in a unique combination of technical expertise together with a strong management team and an extensive network of established relationships throughout all aspects of the industry, which are necessary to bring all its projects to fruition and to take advantage of the current and future market trends and opportunities.