ReneSola begins silicon trial production at new plant

China-based wafer manufacturer ReneSola (NYSE:SOL) said today it has started trial production of its first batch of polysilicon.

The trial took place in the first of a two-part, in-house polysilicon manufacturing facility located in China's Sichuan province, which is expected to have an annual capability to produce 3,000 metric tons.

The company's stock was trading at $5.20, up 7.66 percent around mid-day. 

"As an integral part of our vertical integration strategy, this state-of-the-art facility is designed to enhance our competitiveness as we benefit from cost synergies associated with upstream integration,” said ReneSola CEO Xianshou Li, in a news release. “The production output from this new facility will provide us with a stable, cost-effective flow of polysilicon."

ReneSola's facility utilizes the Siemens process and a closed loop system to produce polysilicon, according to the release. Phase 2 of the facility—planned to have an annual production capacity of 1,500 metric tons—is scheduled for completion in September 2009.

In January, the company secured a loan of RMB 800 million ($117 million) to build its polysilicon plant (see ReneSola secures $117M loan for polysilicon plant).

ReneSola said it delayed the project in late 2008 to conserve capital during the global credit crunch. The company also lowered its earnings estimates for the year (see Bad news from Q-Cells spreads through solar supply chain).

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