Hanwha Qcells will make sizable prepayments to help restart the REC Silicon plant in Moses Lake, Washington, expected by November 1, 2023, with a goal of reaching full capacity by the end of 2024.
REC Silicon ASA announced it is entering into a supply agreement between its subsidiary REC Solar Grade Silicon LLC and Hanwha Q Cells Georgia, Inc., a wholly owned subsidiary of Hanwha Solutions. The American-made, low-carbon polysilicon produced at REC Silicon’s Moses Lake facility in Washington will be used for ingot/wafer manufacturing at the new Qcells manufacturing facility in Georgia, which will begin operation late next year. The 10-year take-or-pay supply agreement is for high purity fluidized bed reactor (FBR) granular polysilicon.
FBR technology has been hailed as a means to produce polysilicon for solar at lower costs and with a small fraction of the electricity used by the dominant Siemens process.
In March 2022, Hanwha Solutions announced stepped up efforts to supply customers with U.S.-made products. Hanwha launched this effort by becoming the largest shareholder of REC Silicon, a major U.S. manufacturer of polysilicon. Now, to secure the supply agreement obligations and to help restart of the Moses Lake facility, Hanwha will make sizeable prepayments at the time of the signing of the supply agreement and at first delivery.
In January of this year, Qcells announced what is considered the largest investment in U.S. solar history, with plans to invest more than $2.5 billion to build a complete solar supply chain in the United States. This makesQcells the first company to establish a fully-integrated silicon-based solar supply chain in the U.S.
The estimated total value of the supply agreement for the duration of the REC Silicon arrangement will fluctuate depending on market prices, which are currently estimated to be approximately $3 billion.
REC Silicon reports that the restart of the plant is expected by November 1, 2023, and it has a goal of reaching full capacity by the end of 2024.
The base price for the polysilicon will be determined by market indices, including markets both inside and outside of China, adjusted for a premium for U.S.-sourced low-carbon material. The polysilicon will also benefit from the $3 per kilogram tax credit from the Inflation Reduction Act.
The re-opening of the Moses Lake operations will enable REC Silicon to provide high-purity polysilicon to the emerging U.S. solar supply chain. In addition, REC Silicon manufactures silane gas (SiH4) at its plant in Butte, Montana, which serves the fast growing battery industry.
Hanwha Solutions, together with its affiliate Hanwha Corporation, controls 33.3% of the shares in REC Silicon ASA.
