JULY 2010

Chinese solar film production deal reached

Natcore Technology Inc. has completed an agreement with a Chinese consortium forming a joint venture to develop and produce film-growth equipment and materials that could significantly lower the cost of manufacturing solar cells.

At the heart of the joint venture is Natcore Technology’s patented Liquid Phase Deposition (LPD) technology, licensed from Rice University where it was developed. LPD grows an anti-reflective (AR) film on a substrate in a room-temperature chemical bath, potentially making solar cells significantly cheaper and cleaner to produce. Existing technology uses a high-temperature vacuum furnace to grow the coating, requiring much more energy in the process and much more silicon to achieve the thickness needed to withstand the firing.

The new company, Natcore China, is a joint venture between Natcore Technology, based in Red Bank, NJ; the Zhuzhou Hi-Tech Industrial Development Zone, a government-supported zone in Hunan province; and Chuangke Silicon Ltd., a polycrystalline silicon producer. Natcore China will be 55 percent owned by Natcore Technology, with its partners holding the remaining 45 percent. The agreement is subject to approval by the Toronto Venture Exchange.

Under this agreement, Natcore China will have a life span of at least 20 years. It will have exclusive rights in perpetuity to develop and manufacture the AR coating equipment used in this technology, so long as it meets specified pricing and quality control standards, and to sell it to solar cell producers in China.

Natcore China will also have exclusive rights for a period of five years to develop and manufacture this equipment for sale anywhere in the world. The solar cell producers that buy this equipment may sell their output anywhere in the world.

Natcore Technology retains the unrestricted rights to license their LPD technology for all other applications.

Natcore China will be funded by an initial $3 million investment consisting of $500,000 dollars contributed by Natcore Technology, and $2,500,000 dollars contributed by the Chinese Partnership.

With the signing of this agreement, Natcore China will immediately begin staffing, retooling and installing equipment in an existing $250 million facility within the Hi-Tech Zone. They expect that first product shipments will be made within 10 months.

Under the agreement, Natcore China will complete the engineering and production of self-contained, self-replenishing film-growth equipment that will recycle the chemicals and water used in Natcore’s LPD process. Until that is accomplished, however, the Chinese partnership envisions the incorporation of the technology into existing solar cell manufacturing lines through manual replenishment of the chemical bath. Thus Natcore China may be able to serve its first solar cell customers before product development is completed.