JA Solar Extends Wafer Supply Agreement With ReneSola; Terminates Agreement With
JA Solar Holdings Co., Ltd. announced that it has extended its wafer supply agreement with ReneSola Ltd.. Under the new agreement, ReneSola will supply an additional 60MW of wafers to JingAo Solar Co., Ltd., the wholly-owned operating subsidiary of JA Solar, from 2008 to 2010.
Samuel Yang, CEO of JA Solar, said, "This latest agreement is in line with our growth plans and continued efforts to meet customer demand. The agreement builds on our existing relationship with ReneSola, and further strengthens our supply chain."
Separately, JA Solar announced that SunPower Corp. Systems ("SP Systems"), a subsidiary of SunPower Corp. that was formerly known as PowerLight Corp., and JingAo agreed to terminate, effective as of September 12, 2007, their contract for the delivery of solar cells, dated January 12, 2007. The agreement was a three-year supply contract providing the general terms and conditions pursuant to which JingAo would supply SP Systems with up to 120MW of silicon solar cells beginning in 2007. However, the parties determined that an unanticipated quality problem with respect to metallurgical grade polysilicon could not be resolved in the near term. In addition, the agreement provided pricing terms through only June 2007 and required the parties to renegotiate thereafter, but the parties had not reached any further agreement regarding pricing. Under the agreement, if the parties did not agree on pricing terms after June 2007, JingAo was not obligated to sell and SP Systems was not obligated to purchase additional solar cells.
As a result of the unresolved quality problems with respect to metallurgical grade polysilicon and unresolved pricing terms, the parties agreed that it was mutually beneficial to terminate the agreement. Termination of the agreement was not expected to have a material impact on JA Solar’s 2007 or 2008 revenues or earnings.