NORWEGIANS TO BUILD $2.5 BIL (BIL!) SOLAR PLANT IN SINGAPORE

Growth in solar energy continues tempestuously yet unabated.

The supply of silicon remains compromised. Some experts say shortages will worsen, some say they will stay the same and some say they will get better. Bottom line: With or without competition from silicon computer chip manufacturers and with or without improvements in the use of raw silicon, the world will likely be consuming all the sand anybody anywhere can turn into useable silicon.

Even with the obnoxious and pointless delay imposed on U.S. solar energy expansion by Congress’s inability to extend the industry’s investment tax credit (which will expire at the end of 2008 and probably leave the nation’s solar producers with a disastrous 2009), nobody in the industry with financial leverage seems especially hesitant about building new manufacturing facilities.

Case in point: The announcement from Norway’s Renewable Energy Corporation ASA (REC) it will spend $2.5 billion on a new integrated manufacturing plant in Singapore and $77.6 million on an upgrade for a plant in Norway.

Why no hesitation to charge into a compromised market? Check the fine print. Full production capacity will be in 2011/2012. By then most experts are predicting solar energy will be nearing price parity with traditional energies, silicon supply issues will be resolving and the industry will be swinging into an unprecedented level of activity.

Timing is everything. Wind has matured. Solar is maturing and will be there in the mid teens. Ocean energy will come after that.

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REC to invest 13 billion crowns in new manufacturing plant in Singapore
Alastair Reed, June 18, 2008 (Thompson Financial via Forbes)

WHO
Renewable Energy Corporation ASA (REC) (Erik Thorsen, CEO)

WHAT
REC announced it will build an integrated manufacturing complex in Singapore at a cost of 13 billion Norwegian crowns ($2.5 billion) to turn out silicon wafers, solar cells and solar panel modules. It will also spend 400 million crowns

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WHEN
- Construction on the Singapore plant will begin before the end of 2008. The plant will be ready to begin production is 1Q 2010. It will reach full capacity before the end of 2011.
- The upgrade of the Norway plant will begin in 3Q 2008. The increased production capacity should be available in late 2009.

WHERE
Besides the Singapore construction, REC will upgrade its facility in Heroya, Norway.

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WHY
- Full production capacity for the Singapore facility: (1) wafers - 740 megawatts; solar cells - 550 megawatts; solar modules - 590 megawatts.
- The Heroya upgrade will add 100 megawatts of capacity to that facility.
- When the new plant and the upgraded plant both reach full production (2012) REC will be producing 2,400 megawatts of wafers, 780 megawatts of cells and 740 megawatts of modules.
- With REC’s new capacity, total Norwegian silicon wafer production will reach 1.75 gigawatts.
- REC will pay for the projects through loans and cash flow and will not issue new shares to raise money.
- REC expects the payoff for the Singapore plant to begin in 2012 with sales of 10 to 11 billion crowns.

QUOTES
Erik Thorsen, CEO, REC: 'This investment supports REC's position as a leading provider of highly competitive solar energy solutions, and in achieving our main corporate goals of reducing costs and securing profitable growth…The project cost levels should enable us to compete profitably at grid-parity prices in several markets, which is essential in building a robust business case.'