REC agrees to supply FBR silicon to Hanwha Q Cells for $3 billion

Norwegian silicon producer REC Silicon ASA reports the signing of a supply agreement between its subsidiary REC Solar Grade Silicon LLC and Hanwha Q Cells Georgia, Inc, a wholly owned subsidiary of Hanwha Solutions, for a 10-year take-or-pay polysilicon supply agreement. REC Silicon itself is 33.3 percent owned by Hanwha Q Cells’ parent company Hanwha Solutions. The estimated total value of the agreed supplies is about $3 billion dollar.
In February, REC had announced that Hanwha would purchase all of the production of granular solar silicon from the fluidized bed reactors (FBRs) at its Moses Lake, Washington state, factory. Shortly before, an agreement very similar to the current one had been published, which, however, referred to the purchase of »nearly« the entire production from Moses Lake; this restriction no longer exists.
To secure the obligations under the supply agreement and to support the restart of the Moses Lake plant, which has been shut down since 2019, Hanwha will make significant upfront payments at the time of signing the supply agreement and upon first delivery. These will be offset against silicon purchases in accordance with a straight-line repayment schedule over the ten-year term. The silicon will also be eligible for the $3 per kilogram tax credit under the Inflation Reduction Act.
The supply agreement is a major milestone in the reopening of the Moses Lake plant, according to REC. The process remains on schedule and on budget for a restart by Nov. 1, with a goal of reaching full capacity by year-end 2024, a company statement reads.

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