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Solar EnerTech Corp. Executes MOU for Joint Venture to Acquire Interest in Silicon Processing Plant and Secure Supply of Solar Grade Silicon Materials

Posted on: Wednesday, 28 June 2006, 18:00 CDT

Solar EnerTech Corp. (OTCBB: SOEN) (the Company) announced the execution of a Memorandum of Understanding ("MOU") regarding a joint venture to acquire a 15% interest in a silicon processing operation in the Inner Mongolia Autonomous Region and further secure a supply of solar grade silicon feedstock. The MOU was signed by Solar EnerTech, PAIS Industries Group, local silicon processor Jin Yu Silicon, Ltd., and Mongolia's Wuhai Municipal Government.

Earlier this month Solar EnerTech announced the execution of a Letter of Intent (LOI) with PAIS Industries Group (PAIS) whereby PAIS Industries would supply the Company with 1,200 metric tons of solar grade silicon ingots for a duration of three years. The intent of the LOI is calculated to supply Solar EnerTech with silicon feedstock needed to manufacture its leading edge solar cells and ensure ready access to affordable materials in the face of high industry-wide silicon demands.

This week Solar EnerTech sent a team led by Chief Operating Officer Mr. Yin Shijian to return to Inner Mongolia with PAIS President John White and associates. Accompanied by Wuhai government officials, the group visited Qian Lishan Ecological Industry Park and met with Jin Yu Silicon, a local industrial-grade silicon processor with an established factory currently producing metallurgical-grade silicon with a 99.99% purity.

The outcome of the meetings led to the MOU for a solar silicon processing joint venture between Solar EnerTech, PAIS, Jin Yu Silicon and the Wuhai Municipal Government. Per the arrangement, Solar EnerTech would own 15% of the joint venture and would secure its solar cell silicon supply from the stock produced by the venture. PAIS intends to combine its advanced technology with the 99.99% pure industrial silicon produced by Jin Yu Silicon in order to manufacture the solar grade silicon ingots needed by Solar EnerTech. The Wuhai Municipal Government intends to supply the joint venture with a range of established preferential investment policies including lowered costs of land and infrastructural assistance including attractive electrical power supply costs.

Inner Mongolia, located on the northern frontier of China, is one of the world's richest sources of silicon. The city of Wuhai is located in the southwest of Inner Mongolia's Autonomous Region and is rich in silicon mines. A small number of processing factories have been producing moderate amounts of 99.9 to 99.99% purity industrial silicon and exporting it to Japan, where the metallurgical-grade silicon is further purified and sold to Europe and the US for a significant profit.

At the signing of the MOU Mr. Li Bin, Deputy Mayor of Wuhai City commented: "We are excited at the prospect of the joint venture and pleased to be able to supply Solar EnerTech with abundant mineral resources, ample assurance of water and electricity, convenient transportation and favorable investment policies."

Given that solar electric energy demand has grown consistently by 25% every year for the past 15 years, a major hurdle facing the rapidly growing $11.2 billion solar industry is the current shortage and corresponding price increase of silicon, the main ingredient of solar photovoltaic (PV) cells. Securing a supply of cost-effective solar-grade silicon to meet its production demands is a key element of Solar EnerTech's strategy for growth.

Solar EnerTech is moving quickly towards the development of innovative applications and advanced technologies in solar energy combined with the ability to take the results of its research directly in production. Construction of the Company's new state-of-the-art solar cell manufacturing plant in Shanghai is running ahead of schedule and within budget. The projected production capacity for its facility is estimated at an output of 20 megawatts per production line. At current prices each 10 megawatts of production translates into roughly $37.5 million dollars in annual revenue per line. The Company's strategic plan is to have the initial 20 megawatts in production by fourth quarter of this year.

About Solar EnerTech Corp. (OTCBB: SOEN)

Solar EnerTech is a photovoltaic (PV) solar energy cell manufacturing enterprise based in Shanghai, China where the Company is establishing a sophisticated 42,000 square foot manufacturing and research facility in Shanghai's Jinqiao Modern Science and Technology Park. Solar EnerTech plans to invest in PV cell research to develop higher efficiency cells and put the results of that research to use immediately in its manufacturing processes. Led by one of the industry's top scientists, the Company's R&D program will work to bring Solar EnerTech to the forefront of advanced solar technology research and production. The Company has also established a marketing, purchasing and distribution arm in Northern California's Silicon Valley.

Forward-Looking Statements

Except for statements of historical fact, the information presented herein may contain forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which Solar EnerTech Corp. has little or no control.

 On Behalf of the Board Solar EnerTech Corp. Leo Shi Young, President 

 Investor Relations Contact Boundary Point Investor Relations Inc. 1-866-378-7372 http://www.solarenertech.com

SOURCE: Solar EnerTech Corp.

Source: MARKET WIRE

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