Thursday, June 11, 2009

Xinyu - On the Path of a Solar City.

I've been looking for info on the price of glass over the last few days in order to support my recent post on thin films.

I found this report from NREL which describes a theoretical "Solar City," and the advantages of scale in terms of reducing the cost of manufacturing Solar Panels down to an ultimate cost target of $1.00/W installed. In order to take advantage of such efficiencies as dedicated glass manufacturing, recycling programs, and equipment uniformity, the manufacturing capacity of this City was set to 2.1 – 3.6 GW.

In the paper, the PV material modeled was thin film, vs something like Crystalline Silicon, I'm quite certain that many of the concepts of scalability apply equally well to wafer-based Solar Tech.

So, with that in mind, make note that there are several "Solar Cities" actually being built right now, and take a guess at where they are located.

Well, among the best developed of these is the City of Xinyu, of Jiangxi Province, China. This is the Chinese home of LDK, and I can only imagine that this is another fundamental factor behind what's happening with the shares right now. 20 Million shares traded today. That's almost five times the average volume. Over the last three days, about 43 Million shares have traded. This is certainly not retail sucker volume. Some big fish seem to be ready to acknowledge that this Company might just be a bit bigger than has been previously admitted.

For the last three years, Xinyu has been working very closely with LDK and Xiaofeng "Light" Peng to develop a fully integrated Solar Manufacturing Community on a very large scale. Over the years, numerous translated articles have found their way to the Yahoo LDK Board from China (thanks to many people on that board). Of course, you can't necessarily believe all that you read, but the pattern has been quite clear. LDK Solar, Xinyu City, and Jiangxi Province, have all been focusing great effort and money on becoming a leading Global Center of Solar Energy.

A sample of this plan goes way back to LDK's taking of a position in Sinoma Crucible. Prior to the development of Sinoma Crucible in Xinyu, right next to LDK's factory, a large part of the supply of Crucibles had to be shipped in from Europe, at unnecessary additional cost. Similar local development is almost certainly providing for a host of other lowest cost Solar Components, not just in support of LDK, but in support of other key Interests that are setting up shop in Xinyu, such as Taiwan-based Dongguan Quoncion Solar Energy Lighting Co.

In short, I think it's quite safe to expect to hear other references to Xinyu's Solar Plan over the next months, and also to likely find that LDK is right there in the middle of a large number of them.

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