First Solar announced it has signed a memorandum of understanding (MoU) with the Chinese government which will put a large scale solar power plant in Ordos. The project is to be developed in phases, with Phase 1 being a demo solar power plant with 30 MW of installed capacity. Construction of this phase is to begin on June 1, 2010. Phases 2,3 and 4 will have 100 MW, 870 MW and 1000 MW, respectively. The total installed capacity will be 2 GW, makin this a huge solar power project, and the largest project First Solar will have developed. Phases 2 and 3 are planned for 2014, while Phase 4 is planned for 2019.

Major projects, such as Ordos solar power plant, are part of China's national initiative to introduce clean energy into the country's power consumption profile in order to meet its environmental protection goals, which are still subject to change. This is a topic that will have major impact on the Copenhagen climate agreement, along with India, which has also to set its environment goals.

According to First Solar, the Chinese feed-in tariff will be critical to this project. A forward looking government policy is necessary for these kinds of projects to work, and contribute to the expansion of solar energu on the Chinese market.

The MoU allows First Solar to actively review possibilities of module suppliers and supplier manufacturing sites in Ordos, along with other considerations that may be required to support a First Solar investment in the area. First Solar will also facilitate expansion of the supply chains in China for thin-film PV module manufacture, but also for PV module recycling.

The final agreement between First Solar and the Chinese government is subject to negotiation and execution of definitve agreements.