Canadian Solar signs 10-year supply deal with LDK

Canadian Solar Inc. said Monday it signed a a ten-year supply contract with solar wafer maker LDK Solar Co., strengthening a two-year-old tie between the companies as LDK ramps up production later this year.

The new supply deal, which is in addition to an agreement inked in October, calls for China-based LDK to supply 800 megawatts of solar wafers starting next June and continuing through 2018.

With the addition of the latest deal, LDK will supply Markham, Ontario-based CSI with a total of 120 megawatts of wafers in 2009 and 170 megawatts in 2010.

A one-megawatt plant running continuously at full capacity can power 778 households each year, according to the U.S. Department of Energy. Solar plants typically have less capacity because they depend on the sun for generation.

CSI estimates it now has supply agreements in place to cover 70 percent of its feedstock needs for 2009, when it aims to produce 500 to 550 megawatts of solar modules.

Canadian Solar shares rose $1.39, or 3.4 percent, to $41.73 in morning trading, while LDK shares added $1.59, or 4 percent, to $41.41.