Yingli Finalizing Plans For 100 MW Panel Manufacturing Plant In US
- By Yuliya Chernova Of DOW JONES CLEAN TECHNOLOGY INSIGHT NEW YORK -(Dow Jones)- Yingli Green Energy Holding Co. Ltd. (YGE), a manufacturer of solar panels based in Baoding, China, is finalizing plans to open a 100-megawatt panel manufacturing facility in the U.S. that would require an investment of about $50 million, Robert Petrina, the head of the company's North American business, told Clean Technology Insight. The company filed an application to receive tax credits from the U.S. Treasury to build the facility, Petrina said. "It's an important step for us. It signals that we believe in the long-term potential of the U.S. market," said Petrina. "We've discussed our interest in doing this over the better part of the last two years," he added. Yingli is picking a location in the Southwest for the facility, said Petrina. The company is currently working out plans for the financing. More than 300 jobs could be created at the location, Petrina said. The company will install production in two phases of 50 MW each, said Petrina. If all goes according to plan, panels will come off the production line by the end of 2010, he said. The sources of financing will be equity from the parent company as well as commercial bank loans, said Petrina. The total of around $50 million will cover both working capital and the equipment expenditures to get the 100 MW facility installed, he said. The company also hopes to offset about 30% of the cost of some of the equipment through the Advanced Energy Manufacturing Tax Credit program created by the federal stimulus package. Applications for the program, capped at $2.3 billion, were due Oct. 16. The Treasury is due to inform applicants in January whether their projects were picked for the subsidy. Awards are due to be issued by April 16, 2010. Several Chinese companies are looking to locate panel manufacturing facilities in the U.S., including Yingli's chief competitor Suntech Power Holdings Co. One of the important reasons for the interest from Chinese suppliers to locate manufacturing in the U.S. is political, said Paul Clegg, analyst with Jefferies & Co., speaking in an interview about the general trend. Clegg doesn't cover Yingli's stock. "To the extent that politics is driving subsidies, it may be perceived as better to create jobs locally," said Clegg. "You only have to look as far as Germany where that has become problematic," he added. Critics of Germany's solar subsidies say they have benefited foreign companies, and even some German companies have called for them to be scaled back. Foreign companies argue that most of the jobs in the solar industry are found in installing panels, and therefore benefit the domestic job market no matter whose panels are used. Petrina said that the decision to locate manufacturing in the U.S. doesn't come lightly and doesn't come as a reaction to any sort of backlash in the West against Chinese products. "It's a serious financial investment. We wouldn't do it if it didn't pay off. There are a number of benefits that we have by being here, that will help extract a superior price point for our product," Petrina said. It makes the most sense to move panel manufacturing to the U.S. or another consumption market, as opposed to the production of cells or other components, said Clegg. That's because of the cost of transportation, which makes it cheaper to transport cells rather than modules. In the U.S., there has been some interest shown by utilities for preferring American-made solar. New York Power Authority, for example, issued a request for information in May as it planned to ask for 100 MW of solar projects in the state, contemplating a local manufacturing and prevailing-wages components for the program. (Dow Jones Clean Technology Insight covers news about public and private clean-technology and alternative-energy companies.) -By Yuliya Chernova, Dow Jones Clean Technology Insight; Yuliya.chernova@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=1fjqP1dofWMKlIc%2BH7NDiQ%3D%3D. You can use this link on the day this article is published and the following day.
