China, First Solar, Strike Deal for Biggest Solar Farm

American solar developer First Solar will build the world’s biggest photovoltaic power plant in the Mongolian desert, after signing a deal with the Chinese government.

The two-gigawatt solar plant will only be part of China’s planned 11,950-megawatt renewable-energy park, to be built at Ordos City in inner Mongolia. The solar plant will start as a 30-megawatt demonstration project, with construction beginning in 2010. Additional phases will come online in 2014 and 2019.

First Solar will operate the plant under a Chinese feed-in tariff, guaranteeing prices for the electricity the plant generates. But the level of that tariff has not yet been established.

Mike Ahearn, CEO of Tempe-based First Solar, told the New York Times his company would likely build a plant in China to manufacture thin-film solar panels. “It is significant that a non-Chinese company can land something like this in China,” Ahearn said. “This is nuclear power size scale. A two-gigawatt solar project, if this is connected and is economical at the grid level, demonstrates that solar on a large scale really does work.”

The cost to build such a plant in the United States would be $5 billion to $6 billion. But First Solar expects it to cost less in China.

First Solar has been moving aggressively into building solar-power plants as it expands from manufacturing solar panels. The company recently agreed to use three big solar farms to supply California utilities with 1,100 megawatts of electricity.