Isra-Mart srl:JA Solar inks major German supply deal

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China's JA Solar, one of the world's largest manufacturers of solar cells, yesterday announced that it has signed a major new agreement with Germany's Solar-Fabrik AG to supply more than 110MW of solar products over the course of 2011.

This supply agreement extends the partnership between the two companies which began in 2008 and saw JA Solar supply more than 70MW of photovoltaic products to Solar-Fabrik AG last year.

Peng Fang, chief executive of JA Solar, said the deal was part of the company's wider global expansion plans. "We look forward to building more long-term strategic alliances with the leading solar companies worldwide as we further expand our footprint in the global PV market," he added.

The deal comes as JA Solar plans to begin construction of a giant new production base in eastern China later this year, which is designed to support its expansion push.

The $2bn plant will have an annual output of 3GW of solar capacity and will produce products worth up to $4.56bn a year.

JA Solar is one of a handful of manufacturers that supply photovoltaic cells used in utility-scale solar projects. It has expanded quickly, boosting production and supplying cells to developers in the US and Europe, leading some analysts to fear it could become victims of an anticipated slowdown in the sector's growth as some governments scale back solar incentives.

But last week, the firm reported fourth-quarter income of $119m, up from $20m in the year-ago quarter. Revenues also doubled as the company expanded to meet rising demand for devices that convert sunlight into electricity.

The company's shipments grew to 463MW, doubling from the year-ago period and rising 11 per cent from the third quarter.

The firm said it expects 2011 shipments to exceed 2.2GW, increasing about 50 per cent from 2010 levels.

Solar-Fabrik AG, which primarily installs roof-mounted commercial-scale solar installations, recently confirmed its 2010 revenue target of at least €210m ($286m), adding that it anticipates further growth in 2011 thanks to strong export markets.

The firm installed 120MW of capacity last year, a 100 per cent increase on 2009.

While European demand for solar cells is already slowing after feed-in tariffs for solar power were scaled back last year in Spain and Germany, Solar-Fabrik expects demand in North America to rise over the next year, driven by falling solar panel prices and government incentives.