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First Solar signs massive deal with China

At 2,000 megawatts, the solar power plant planned for Ordos City, Inner Mongolia, could be the largest in the world.

First Solar has signed a memorandum of understanding with China to partner on a 2,000-megawatt power plant in Ordos City, Inner Mongolia.

If and when completed, it will be one of the largest solar power plants, perhaps the largest, in the world in terms of megawatts. In comparison to other current projects, the U.S. Army is building a 500-megawatt solar thermal farm in the Mojave Desert. First Solar, which is based in Tempe, Ariz., also has a 550-megawatt project planned in California. And Canadian Solar recently announced a 500-megawatt solar farm also planned for Inner Mongolia.

Ordos City is marked by the red bubble with an "A" inside. Google Maps

Construction on the first phase of the First Solar project in China, a 30-megawatt plant, is set to begin in June 2010. The second phase--at 100 megawatts--and third phase--at 870 megawatts--are scheduled to be completed in 2014. The final fourth phase, a 1,000-megawatt installation, is slated for completion by 2019.

"We are very pleased to be partnering with one of the solar industry's global technology leaders in a project of such significance to Ordos's low carbon future. Discussions with First Solar about building a factory in China demonstrates to investors in China that they can confidently invest in the most advanced technologies available," Cao Zhichen, vice mayor of Ordos City, said in a statement Tuesday.

First Solar manufactures thin-film solar cells from cadmium telluride and builds solar power plants. To accommodate the massive undertaking in China, it will "review the possibility of module and supplier manufacturing sites in Ordos, and other considerations required to support a First Solar investment."

The company also plans to look into recycling used photovoltaic modules in China, something it's already been doing in the U.S.

The Inner Mongolian government has arguably taken a keen interest lately in solar energy. Canadian Solar, a Canadian company with China-based subsidiaries, announced in August that will build a 500-megawatt power plant in Baotou, Inner Mongolia. Ordos City is about 100 miles from Baotou and about 500 miles from Beijing.

The surge in Chinese solar investment is no doubt due in large part to China's $586 billion stimulus package announced in November 2008, which included an estimated $70 billion earmarked for improving the country's electrical grid.