SunPower Signs Joint Venture Agreement in China
Partners with TZS, Inner Mongolia Power and Hohhot City to Manufacture and Deploy SunPower C7 Tracker for Inner Mongolia, Other China Regions
SAN JOSE, Calif., Dec. 3, 2012 /PRNewswire/ -- SunPower Corp. (NASDAQ: SPWR), a Silicon Valley-based manufacturer of high-efficiency solar cells, solar panels and solar systems, today announced that it signed a definitive agreement to form a joint venture with partners Tianjin Zhonghuan Semiconductor (TZS), Inner Mongolia Power Group (IMP) and Hohhot Jinqiao City Development Company (HJCD) for the manufacturing and deployment of the company's proprietary SunPower® C7 Tracker (C7) concentrator technology in the Chinese market.
The joint venture, based in Hohhot, Inner Mongolia, PRC, will manufacture and deploy SunPower's high efficiency, C7 concentrator solar systems in Inner Mongolia and other regions in China. Under the terms of the definitive agreement, SunPower will invest $15 million, of the total capitalization of the joint venture of $60 million, for a 25 percent ownership stake. The joint venture is subject to the approval of the PRC government with initial C7 deployment expected to begin by the end of 2013.
"This agreement capitalizes on the capability of SunPower's next generation C7 technology to deliver industry leading cost effective energy," said Tom Werner, SunPower president and CEO. "Working together with our team of strong local partners who bring different strengths to this project, we believe that we can deploy significant volumes of C7 power plants to help serve China's growing need for clean power. We also expect that this venture will facilitate the development of a low cost, high volume C7 supply chain and accelerate our C7 cost reduction roadmap."
"This joint venture collaboration embeds essential winning factors including our excellent natural resources, the best photovoltaic technologies and diligent, committed partners," said Huadong You, chairman of TZ Group. "Our four-party, three country landmark partnership sets a role model for the industry and also embraces challenges for a sustainable future."
"This joint venture is a new milestone in the development of the PV industry in Hohhot City and the Inner Mongolia Autonomous Region," said Yi Qin, mayor of Hohhot City. "We look forward to leveraging the strengths of Hohhot City to support the success of this venture and have full confidence in this winning collaboration among the four partners."
"We are fully committed to the success of this joint venture and we will meet the expectations of all levels of government, as well as those of our partners," said Fusheng Zhang, CEO of IMP. "IMP has an excellent grid infrastructure, leading experience in grid integration of renewable energy and strong resources."
The SunPower C7 Tracker combines single-axis tracking technology with rows of parabolic mirrors, reflecting light onto 22.8 percent efficiency SunPower Maxeon® cells, the world's most efficient commercially available solar cells. Using mirrors to reduce the number of solar cells required to generate electricity lowers the levelized cost of energy by up to 20 percent compared to competing technologies. For example, a 400-MW C7 power plant requires less than 70 MW of SunPower solar cells.
SunPower Corp. (NASDAQ: SPWR) designs, manufactures and delivers the highest efficiency, highest reliability solar panels and systems available today. Residential, business, government and utility customers rely on the company's quarter century of experience and guaranteed performance to provide maximum return on investment throughout the life of the solar system. Headquartered in San Jose, Calif., SunPower has offices in North America, Europe, Australia, Africa and Asia. For more information, visit www.SunPowercorp.com.
About Tianjin Zhonghuan Semiconductor
Tianjin Zhonghuan Semiconductor Co., Ltd. (TZS) is a Tianjin-based PRC listed company with a registered capital of RMB 724,244,412. TZS is committed to the semiconductor energy-efficiency industry and the new energy industry, and is an integrated high-tech enterprise with research, production, operation and venture capital functions. Its main products include vertical pulling monocrystalline, zonemelting monocrystalline, polished wafer, semiconductor power devices and rectifiers used in the semiconductor energy-efficiency sector; and monocrystalline silicon used in the new energy sector. These products are widely applied in smart grid transmission, new-energy vehicles, high-speed railways, inverters for wind power, integrated circuits, consumer electronics, aerospace, photovoltaic power, and other areas.
About Inner Mongolia Power Group
IMPC (Group), solely owned by Inner Mongolia Autonomous Region, is the only provincial-level independent power grid company outside the National Grid and China Southern Grid. IMPC constructs, operates and manages the power grid covering 8 Inner Mongolia cities including Hohhot, serving an area of 720 thousand square kilometers and a population of 13.8 million. At the behest of the Inner Mongolia Autonomous Region, it also manages state owned enterprises including Power Design, Power Science & Development, Power Construction companies.
About Hohhot Jinqiao City Development Company
Located in Jinqiao Development Zone of Hohhot City, Hohhot Jinqiao City Development Company is a state-owned company to invest in and finance the projects related to city infrastructure development and improvement. HJDC was founded on April 2, 2001, with registered capital of RMB 58M.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not represent historical facts and may be based on underlying assumptions. SunPower uses words and phrases such as "agreement to," "will," "expected to," "believe," "expect" and similar expressions to identify forward-looking statements in this press release, including forward-looking statements regarding: (a) establishment of a joint venture in China; (b) the joint venture successfully manufacturing and deploying C7 concentrator systems; (c) expected C7 deployment by the end of 2013; (d) deploying significant volumes of C7 power plants; and (e) the development of a low cost, high volume C7 supply chain and accelerating C7 cost reduction roadmap. Such forward-looking statements are based on information available to SunPower as of the date of this release and involve a number of risks and uncertainties, some beyond SunPower's control, that could cause actual results to differ materially from those anticipated by these forward-looking statements, including risks and uncertainties such as: (i) the joint venture not able to obtain the approvals required from PRC government for its establishment; (ii) increasing supply and competition in the industry and lower average selling prices, and the joint venture's ability to compete in the Chinese market; (iii) the impact of regulatory changes and the continuation of governmental and related economic incentives promoting the use of solar power, including the timing and magnitude of feed-in-tariff policy in the PRC; (iv) potential difficulties associated with operating the joint venture; (v) the joint venture and SunPower's ability to create a low cost supply chain for C7 and meet cost reduction plans for C7; (vi) the joint venture's ability to obtain and maintain an adequate supply of raw materials and components and the price it pays for such materials; (vii) the joint venture ability to obtain additional financing; (viii) the joint venture's ability to offer a competitive product in the Chinese market at a favorable margin; (ix) general business and economic conditions, including seasonality of the solar industry and growth trends in the solar industry; (x) SunPower's ability to successfully enter the Chinese market and operate internationally; (xi) the joint venture's ability to ramp up manufacturing; (xii) construction difficulties or potential delays, including obtaining land use rights, permits, license, other governmental approvals; (xiii) manufacturing difficulties that could arise; (xiv) trade barriers and potential duties; (xv) SunPower and joint venture's ability to protect intellectual property; and (xvi) other risks described in SunPower's Annual Report on Form 10-K for the year ended January 1, 2012, Quarterly Reports on Form 10-Q for the quarters ended April 1, 2012, July 1, 2012 and September 30, 2012, and other filings with the Securities and Exchange Commission. These forward-looking statements should not be relied upon as representing SunPower's views as of any subsequent date, and SunPower is under no obligation to, and expressly disclaims any responsibility to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
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SOURCE SunPower Corp.