January 31, 2011 / 6:31 PM / 8 years ago

UPDATE 1-Celestica expands Ontario solar manufacturing

* Celestica to make solar modules in Ontario

* To supply 19 solar power plants to be built by Recurrent

* Joint venture to create up to 300 manufacturing jobs (Recasts with details, background, stock price)

VANCOUVER, Jan 31 (Reuters) - Celestica Inc (CLS.TO), a contract electronics maker, is expanding solar-equipment manufacturing to serve renewable energy developers seeking lucrative contracts being offered by the Canadian province of Ontario.

Celestica, whose main business is making electronic components for BlackBerry maker Research In Motion Ltd RIM.TO, will manufacture solar modules for Recurrent Energy, a U.S.-based unit of Sharp Corp (6753.T), Recurrent said on Monday.

Recurrent and Celestica said full production will start at Celestica’s Toronto site this summer under a multi-year supply agreement.

They gave no financial details although Recurrent said it will purchase 180 megawatts of solar modules from Celestica and expects to invest “many hundreds of millions of dollars” in the development of 19 solar power plants in Ontario.

Recurrent was one of the largest award winners last April when the Ontario Power Authority handed out 20-year contracts for the generation of 2.4 gigawatts of renewable energy under its new feed-in tariff program.

Ontario, wanting to clean up pollution and create jobs, launched North America’s most lucrative and comprehensive FIT program in the fall of 2009. The program pays producers of renewable energy above-market rates under 20-year contracts.

The province, however, requires local content in the manufacture of renewable energy equipment for projects to qualify for the rich contracts.

In 2010, 50 percent of goods and labor for solar projects had to be locally sourced. That rises to 60 percent this year.

As a result, several Canadian and foreign renewable energy manufacturers have set up shop in Ontario.

The Celestica-Recurrent venture will create up to 300 manufacturing jobs and up to 2,000 additional construction jobs, the Ontario government said in a statement.

Recurrent’s solar projects in Ontario will deliver about 200 megawatts of new solar generation, enough to power 25,000 homes.

Celestica Chief Executive Craig Muhlhauser told Reuters last April that the company planned to launch a big expansion of its green technology manufacturing in late 2010 or early 2011.

Mulhauser said Celestica could produce solar panels, inverters, energy-management equipment and smart grid technology.

In November, SolarBridge Technologies, a developer of microinverters for the solar industry, said it had chosen Celestica to make components at its Toronto location to enable SolarBridge to participate in Ontario’s FIT program.

Celestica’s stock was 5 Canadian cents higher at C$9.94 on the Toronto Stock Exchange on Monday afternoon.

$1=$1.00 Canadian Reporting by Nicole Mordant; editing by Peter Galloway

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