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JinkoSolar's Fla. manufacturing plant would create 200 US jobs, officials say

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JinkoSolar's Fla. manufacturing plant would create 200 US jobs, officials say

China's JinkoSolar Holding Co. Ltd. plans to spend $50.5 million to assemble solar panels at a plant in Jacksonville, Fla., a project that is being closely watched after President Donald Trump approved tariffs on imported solar cells and panels in January.

A majority of the components for the company's U.S.-made panels would initially be imported from China through the Port of Jacksonville, potentially supporting some off-site employment in addition to the 200 new jobs the project is expected to create, the Jacksonville Office of Economic Development said in a March 6 document. The proposed assembly plant would have an annual production capacity of 1,500 MW, according to Credit Suisse. It would be JinkoSolar's first in the U.S.

The company was the first foreign manufacturer to announce a large-scale U.S. panel-making facility to take advantage of a provision in the solar tariffs exempting the first 2,500 MW of imported cells annually, Credit Suisse analysts said. Using tariff-free cells, U.S.-made panels would cost between 5% and 15% less than those assembled outside the country through 2021, the analysts said in a Jan. 30 note.

"Companies like Jinko have determined that it has recently become more cost effective to begin to assemble their products closer to their client base," according to a project summary from the city of Jacksonville. "The establishment of such an operation in Jacksonville could possibly lead to other similar types of operations and affiliated suppliers being attracted to Jacksonville."

Days before JinkoSolar's Jan. 29 announcement that it was moving ahead with plans to build a U.S. plant, Neo Solar Power Corp. Chairman and CEO Chuanxian Hong said the new tariffs had led his company to consider opening an American factory as part of its acquisition of fellow Taiwanese solar manufacturers Gintech Energy Corp. and Solartech Energy Corp.

In February, Credit Suisse identified 4,450 MW of demand for tariff-free cells in 2019, far in excess of the 2,500-MW quota. Without an exemption, JinkoSolar believes that its next-best option would be to pay tariffs to import foreign-made panels, Credit Suisse analyst Maheep Mandloi said. JinkoSolar in January said it signed a contract to supply approximately 1,750 MW of solar panels to a U.S. buyer over roughly three years.

JinkoSolar, which generated more than a third of its revenue from U.S. sales in 2016, is expected to receive $1 million in incentives from Florida and the city of Jacksonville through a tax refund program plus a $3.2 million grant. The incentives were a "material factor" in JinkoSolar's selection of Jacksonville over other possible locations, the city said.

A document released in January by the Jacksonville Office of Economic Development said a manufacturing project by an unnamed international solar panel maker would result in investments totaling $410 million and the creation of 800 new jobs. City documents from January and March list the same address for a manufacturing facility; the earlier document included a second proposed facility for panel assembly and distribution.

A JinkoSolar spokeswoman did not immediately respond to a message seeking comment March 9. An official at the Jacksonville Office of Economic Development also did not respond to a request for comment March 9.

Many market analysts doubt the solar tariffs will push many foreign manufacturers to move production to the U.S. Paula Mints, chief analyst at SPV Market Research, said tariffs on steel and aluminum imports, which Trump signed March 8, could undercut efforts to increase domestic solar manufacturing. "[Adding] any costs to the manufacturing process is probably not a great incentive for manufacturers," Mints wrote in a Feb. 28 client report.