Applied Materials of Silicon Valley will supply precision wafering systems to China's LDK Solar through a $220 million contract announced Tuesday.
Applied Materials is scheduled to start shipping the wafering systems in early 2009. The announcement reinforces LDK Solar’s plans to expand its annual wafer capacity to 3.2 gigawatts in 2010.
The contract, which Applied Materials claims is the largest such contract ever awarded for wafering systems, arrives among a trend of bigger deals when it comes to alternative energy.
“The market is definitely favoring larger systems,” said Reese Tisdale, an analyst at Emerging Energy Research. “This can be seen through the size of the utility size announcements from companies such as OptiSolar, SunPower, Duke Energy, and Southern California Edison.”
Just last week, PG&E signed a 550 megawatt power purchase agreement with OptiSolar subsidiary Topaz Solar Farms and a 250 megawatt power purchase agreement with SunPower. On Monday, Southern California Edison signed a 900 megawatt wind energy contract.
This spur of big contracts result, as Tisdale explains, from companies’ abilities to “take advantage of insulation costs and [because of] economies of scale on the procurement side.”
What that means is more companies are buying in “bulk” through long-term contracts to absorb costs in the long run, something more feasible nowadays because of the growing focus and interest in alternative energy.