(Bloomberg) -- A leading Chinese solar manufacturer announced plans for a new factory in Southwest China, in a bet that continuing to advance technology in the sector will outweigh the risks of adding to an already saturated market.
Longi Green Energy Technology Co. signed an agreement with a local unit of Yingfa Group to build a 16-gigawatt solar cell plant in Yibin, Sichuan, according to a statement from the local government on Wednesday. The investment is coming even as Longi has lost money four straight quarters because of over-capacity across the supply chain that’s driven prices of solar equipment to record lows.
The Yibin plant will produce back-contact cells, a technology that produces more power from the same amount of sunlight. While BC cells are a small slice of the sector now, Longi believes the technology will be mainstream in the next five years. China’s solar industry is known for its breakneck pace of innovation, which has helped bring costs down more than 90% in the past decade and made it the fastest growing energy source on the planet.
The first phase of the project is expected to be online by 2025 and produce 6 gigawatts of cells annually, according to the statement, which didn’t contain details on the size of the investment.
--With assistance from Luz Ding.
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