NextEra Energy Inc. said it is the buyer behind a large solar-panel contract that Chinese manufacturer JinkoSolar Holding Co. Ltd. unveiled in January.
JinkoSolar originally announced the sale at the same time the company said it was moving ahead with plans to open a plant in the U.S. JinkoSolar made those announcements a week after President Donald Trump approved tariffs on imported solar cells and panels. The company later said it plans to locate the plant in Jacksonville, Fla., approximately 275 miles north of NextEra's headquarters in Juno Beach, Fla.
NextEra disclosed its role in the deal March 30, days after the Jacksonville City Council approved an economic development agreement that will provide JinkoSolar with incentives including a grant from the city worth $3.2 million.
"Today's announcement means that 200 additional families in Jacksonville will be able to find a great job," Florida Gov. Rick Scott, a Republican, said in a news release issued by NextEra.
NextEra Chairman and CEO Jim Robo said the supply agreement, which was expanded since January and now calls for JinkoSolar to deliver up to 2,750 MW of solar panels over approximately four years, will allow the utility to buy "cost-effective, reliable solar panels made here in America."
JinkoSolar 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. 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.
JinkoSolar asked the Trump administration to exempt its foreign-made solar cells from the tariffs, saying the added cost would limit its ability to "create and expand panel production in the United States." However, the company's CEO, Kangping Chen, later said the tariffs "won't disrupt our plan to invest in a production facility in the U.S."
The Jacksonville plant, which will rely on components imported from China, is slated to have an annual capacity of 400 MW. The plant previously was expected to have a capacity of 1,500 MW.
The tariffs Trump set on solar cells and panels made from crystalline silicon are scheduled to fall from 30% to 15% over four years. NextEra was part of a group of companies that took steps in 2017 to blunt the worst impact of the duties by stockpiling or preordering panels. All told, companies in the U.S. are sitting on at least 8,400 MW of tariff-free panels, according to Credit Suisse research analysts. That exceeds the amount of solar capacity added to the nation's electric grid in 2015.
"We're well-positioned to mitigate any impacts of the recently announced tariffs," Robo said on an earnings call Jan. 26, adding that the company had already ordered enough panels to cover its development needs into 2020.