There are times when business defies politics. One such is the case of JinkoSolar, which in January announced that it would open its first US factory in Jacksonville, Florida, thereby becoming the first Chinese solar panel manufacturer to confirm plans to open a plant in the US after Donald Trump announced that the country would be imposing duties of up to 30% on solar equipment made overseas.
In recent months, the sabre-rattling by the US and China has started to seem more like a looming trade war as each county imposes tariffs on the other.
JinkoSolar, which has a global manufacturing footprint and had been seeking to expand, made the decision based on strong growth in the US solar market, particularly in the south-eastern states. Director of business development Jeff Juger explains that the company has been increasing its shipments every year and needed more output to meet growing demand.
“We had investigated the possibility of opening a factory in the US even before the tariff announcement, since the US is one of the top solar markets in the world,” he says. “It made sense to be located closer to our customers so we could provide faster lead times and better local service. “
JinkoSolar will be supplying 2.75 gigawatts (GW) of solar panels to US-based NextEra Energy, the largest deal in the history of the solar panel industry. NextEra, which is headquartered in Juno Beach, Florida, is the world’s largest renewable energy utility company.
“The tariff was an important driving factor, among others, for the decision to locate in the US,” says Mr Juger. “How the tariff plays out over time will also have an impact on our future plans.”
JinkoSolar has sold more than 5GW of solar panels in the US since 2011, with all modules coming from Malaysia. The company is regarded as a leader in solar panels deployed to US utility-scale projects.
“With many of our customers building projects in the south-east and the residential market catching up quickly, it was a good business decision to locate in the Jacksonsville area,” says Mr Juger. “Proximity and [guarantee] of supply are often important variables for customers. A local plant will help JinkoSolar respond to US customer demands faster and provide better local service.”
Incentives were important in sealing the deal. “Florida was quite competitive relative to other states we considered,” says Mr Juger. “However, good incentives alone do not make a successful manufacturing operation. So we also strongly considered the business climate, the availability of technical labour and quality of the electricity/utility service.”
Florida has a large labour pool, including many sources of technical labour, which is vital for JinkoSolar’s production lines. A further advantage is the Port of Jacksonville, given the company’s large volume of imports and exports.
“We believe Florida to have a highly efficient logistics system, which will enable us to ship our product quickly around the US,” says Mr Juger.
The timing of the deal is important given JinkoSolar’s goal to diversify its manufacturing geographic footprint to match its global deployment of solar panels. “This local plant will help us service NextEra Energy better,” says Mr Juger.