Natcore signs deal with Chinese consortium to take its solar technology from lab to power grid

23 February of 2010 by

Natcore Technology Inc. has reached an agreement with a consortium inChina to form a joint venture company to develop and manufacturefilm-growth equipment and materials using Natcore’s proprietary LiquidPhase Deposition (LPD) technology.

The technology would be used in the production of solar cells.
Natcorehas signed a letter of intent with the Zhuzhou Hi-Tech IndustrialDevelopment Zone to form the new company, "Natcore China," with rightsto manufacture anti-reflective (AR) film growth equipment andmaterials. Natcore China will be 55% owned by Natcore Technology, withthe Hi-Tech Zone and its partners holding the remaining 45 percentownership position.

Natcore’s technology was developed at RiceUniversity in Houston. LPD applies an AR coating in a room-temperaturechemical bath, making the solar cells significantly cheaper and cleanerto produce. Existing technology uses a furnace and a vacuum to applythe coating to solar cells, requiring larger amounts of energy andexpensive silicon to achieve the thickness needed to withstand thefiring.

"This agreement is a major milestone in the growth ofNatcore Technology," notes President and CEO Chuck Provini. "Not onlydoes it fully fund our remaining R&D and production costs for ARfilm equipment, but it immediately plugs us into a network of end-usersin China, which is the world’s largest and fastest-growing producer ofsolar cells. In short, it helps move us out of the lab and closer toachieving our goal of making solar energy efficient enough to beaffordable to the world."

Natcore China will be funded by aninitial $3 million investment consisting of US$500,000 contributed byNatcore Technology, and US$2,500,000 contributed by the ChinesePartnership. Natcore China will have the exclusive right to develop,manufacture and sell solar cell AR film-growth equipment in China, anda three-year exclusive right to manufacture such equipment for saleoutside of China.

Natcore Technology and the ChinesePartnership have begun drafting a definitive agreement incorporatingthe principles reflected in the executed letter of intent. Completionof the agreements is subject to regulatory approval.

The ChinesePartnership will consist of the Zhuzhou Hi-Tech Industrial DevelopmentZone and two Chinese firms, including a major producer of polysiliconand a manufacturer of industrial equipment used in the solar industry.Natcore’s partners project that the joint venture company willeventually create as many as 500 jobs in manufacturing and R&D.

Other key elements of the joint venture include:
* Operation in China as a local company, with all intellectual property protections accruing to such a position.
*A fast-track development program initiated upon signing of a definitiveagreement, with a projected timeline of 10 months to first productshipments.
* Early integration of Natcore’s LPD film-growthtechnology into existing solar cell production lines, in advance offinal equipment development.
* The ability to fast-track revenues by accepting lead orders in China and throughout the world.

"Wehad always envisioned a joint venture operation in China as part of ourlong-term business plan, after we had completed development of our ARfilm growth equipment," notes Brien Lundin, Natcore’s Chairman andco-founder. "But well before that could come to pass, we wereapproached by the Hi-Tech Zone with their offer to completely fund ourAR film growth development program, and give us majority ownership inthe joint venture."

"We will retain control, enjoy a ready-madesolar cell customer network and open up new avenues for funding ofpotential future joint ventures," he adds. "It was an opportunity wecouldn’t refuse."

Under the agreement, Natcore China willcomplete the engineering and production of self-contained,self-replenishing film-growth equipment that will recycle the chemicalsand water used in Natcore’s LPD process. Until that is accomplished,however, the Chinese Partnership envisions the incorporation of thetechnology into existing solar cell manufacturing lines through manualreplenishment of the chemical bath. In this way, Natcore China would beable to serve its first solar cell customers, which may include membersof the Chinese Partnership, before final product development iscompleted.

One of the key advantages of the Natcore LPD processis its relatively low environmental impact. "Pollution control andtoxicity are very big issues in China now," says Provini. "Our abilityto not only reduce the cost of solar cell manufacturing, but to also doso in a much more environmentally friendly manner, is a very importantbenefit to our new partners and their customers."

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