[New York City, New York USA]

Solar silicon from Ontario then Ohio or Mississippi.
16000 MT (Metric Ton) large scale solar silicon facility planned for the United States in a bid to become a major silicon provider.

Presenting at the Jefferies 11th Global Clean Technology Conference, Calisolar CEO Sandra Beach Lin said:

The Value proposition for Calisolar is all about being the low cost solar silicon provider.

Since “Calisolar acquires Solar Grade 6N Silicon” last year, Calisolar has determined the 6N Silicon technology base combined with Calisolar cell technology “is turning out to be a winning value proposition in silicon” altering the start-up’s 2006 founding premise of “ensuring that upgraded metallurgical silicon could be used successfully to make very competitive solar silicon cells.”

By executing on all technical and customer milestones, Calisolar has leveraged the strategic domestic content advantage of solar silicon produced in Ontario, Canada, to land long term solar silicon and cell sales contracts with photovoltaic (PV) industry leaders including Suntech Power Holdings Co., Ltd. (NYSE:STP) for solar silicon and a large, unnamed Japanese company for solar silicon cells.

When I asked who Calisolar’s major cell customer might be to address the Ontario Power Authority (OPA) FIT (Feed-in Tariff) Program’s domestic content requirements, ClearSky Advisors Co-Founder Tim Wohlgemut said:

We know that Sharp’s distributors have been in the market actively selling Sharp product with Ontario-made silicon, so we feel quite confident that Sharp is using Calisolar product for the Ontario residential and rooftop markets.  Suntech and UE Solar have also been public about their intentions to use Ontario-made silicon for their modules (likely from Calisolar).

Calisolar claimed the major Japanese PV customer was able to plug and play Calisolar cells into an existing 60 cell, 230 Watt module without redesign.

Calisolar Quick Facts

• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) positive in December 2010
• 40 MW (MegaWatt) of solar cells and 400 MT of solar silicon shipped by the end of 2010
• 75 MW Sunnyvale solar cell manufacturing facility has fully ramped
• Manufactured mc-Si (multicrystalline silicon) solar cells are averaging 16.5% efficiency and continuously improving with 10% of production at 17% efficiency or greater.
• 500-600 MT Silicon Purification (6N Silicon) capacity in Vaughan, Ontario Canada
• 1.1 MW installation completed in Piedimonte San Germano, Italy, using Calisolar solar cell based modules produced by Eurener.

Solar Silicon Status and Plans
Calisolar is expanding their Silicon Purification Operations facility in Vaughan, Ontario, from 500-600 MT to 1300 MT by August or September 2011. Per the solar silicon agreement (“Suntech, Calisolar to construct new solar silicon manufacturing facility in Ontario, Canada”) with Suntech Power Holdings Co., Ltd. (NYSE:STP), the Vaughan facility will be expanded an additional 1000 MT to 2300 MT by mid 2012. The expansion requires capital expenditures (CAPEX) of $20 to $24 million and will be financed by Suntech and the Government of Ontario.

Beyond the Ontario solar silicon capacity of 2300 MT, Calisolar believes they are near a solar silicon inflection point and are planning a large scale 16000 MT solar silicon facility located in the United States. The states of Ohio and Mississippi are vying for the facility and the up to 1300 jobs that will be created. “Calisolar says it is impressed by Ohio’s labor” by Lou Whitmire for the Mansfield News Journal gives the edge to Ontario, Ohio (just to create confusion with Ontario, Canada) while acknowledging the “favorable terms of the site lease and power rates” offered by Mississippi. Ohio has offered low electricity rates less than $0.05 per kWh (kiloWatt-hour) countered by the TVA (Tennessee Valley Authority) electricity rates in Mississippi.

Calisolar has applied for a loan guarantee to build the large scale silicon facility under the US Department of Energy (DOE) Loan Guarantee Program and spent seven hours meeting with the DOE last week in advanced talks regarding the due diligence process. Calisolar plans to make a decision on the final location soon as the DOE Loan Guarantee would require the project to start by September 2011. However, Calisolar is working on funding to construct the plant even without the DOE Loan Guarantee.

“Calisolar tax break a step toward Ontario” also by Lou Whitmire for the Mansfield News Journal said:

The project that may come here would include leasing the 2-million-square foot facility that was formerly the General Motors Mansfield/Ontario Metal Center. The initial lease term for the facility is 20 years, with an option for renewal for its silicon purification operation. Calisolar would make a total fixed-asset investment of at least $457 million, including $210 million for building acquisition, construction and renovation as well as $247 million for machinery and equipment.

Construction of the large scale silicon facility is slated to begin late 2011 or early 2012 and requires about 11 months. A 24 month facility ramp will be needed to achieve solar silicon or Upgraded Metallurgical Silicon (UMG-Si) production costs about half those of the Siemens process. As a reminder, Calisolar claims their UMG-Si process requires one-sixth the CAPEX, the electricity (less than 24 kWh per kilogram), and the land area of a typical Siemens process polysilicon plant.

Solar Cell Expansion Plans
Despite claiming to be sold out of all solar silicon and cells made with Vaughan silicon at a good price, Calisolar is holding off on doubling Sunnyvale solar cell production capacity to 155 MW preferring to wait for a customer investment. Calisolar said solar cell efficiency was “increasing to 16.8% on average this year on our way to 17%.”

The Calisolar presentation slides mentioned plans to co-locate 420 MW of wafer capacity at the large scale silicon facility were TBD (To Be Determined).

Given the patent and process know how developed by Calisolar to produce efficient, low cost, mc-Si solar cells using 100% UMG-Si, I expect Calisolar will need to license the process technology to most companies interested in buying their solar silicon.

As Calisolar CEO Sandra Beach Lin said: “Every day is exciting at Calisolar.”