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Behind The Signing Of The Largest Photovoltaic Orders: Jinko Energy Hit Back U.S. Trade Barriers
- Apr 10, 2018 -

Behind the signing of the largest photovoltaic orders: Jinko Energy hit back U.S. trade barriers

The world's largest supplier of solar photovoltaic modules, Jinko Energy, has gone down in the overseas layout.

On March 30th, US-based NextEra Energy, Inc and JinkoSolar announced that they signed a PV module supply agreement. JinkoSolar will provide NextEra Energy with a 2,750 MB cap in the next four years or so. Watts (approximately 7 million pieces) of high-efficiency photovoltaic modules.

NextEra Energy is currently the largest public utility listed company with a market capitalization of approximately $73 billion. It is also the world's leading renewable energy platform and has a net generating capacity of 470,000 megawatts per year, and according to JinkoSolar's full year 2017. 8GW shipment calculations, the signing of the value of about 1/4 of its annual production, which also means that the two world PV giants signed the history of the largest photovoltaic module supply agreement.

For Jinko Energy, taking large orders is a strong guarantee for future growth. Jinko Energy pointed out that this cooperation will not only consolidate its position in the new energy field. In the long run, it also helps to significantly reduce the cost of power generation. More customers are willing to pay reasonable and stable power prices. This makes the cooperation between the two companies have obvious advantages over the industry, and the two parties win each other and achieve mutual realization. Long-term sustainable growth.

However, as Sino-U.S. trade frictions intensify and the profitability of components falls short of other links, Jinko Energy, which is adhering to the global layout strategy, will also face more tests.

“We have immunity.” On April 8, when asked by the media about the trade friction between China and the United States, Jin Jing, Vice President of Jing Ke Energy, said, “In terms of photovoltaics, we have several rounds of anti-doubles, the United States, and Europe. Enterprises must have competitiveness in the future. Competitiveness is not just technology, R&D, and production. The most crucial point is the ability of globalization. It does not mean that companies have the ability to globalize. It may just sell products abroad, but Does not mean that you have the ability to globalize."

Balanced overseas layout

With regards to the cooperation between JinkoSolar and NextEra Energy, the Times Weekly reporter contacted Jinkoo Energy to learn more. Although no response was received as of the press release, it can be found that the cooperation between the two companies is based on the United States’ implementation of an emergency tariff in the photovoltaic industry. background.

It is understood that on September 22, 2017, the US International Trade Commission made a damages ruling on the investigation of the global safeguard measures for photovoltaic cells and components and determined that the imported products caused serious damage to the domestic industry in the United States. Immediately after the United States announced on January 22 this year that it imposed a 30% tariff on PV panels, it was signed by the President on the 23rd. Although the tax rate will fall by 5 percentage points annually, the restrictions will last for 4 years.

In order to avoid greater impact, Chinese companies have begun to make corresponding responses. JinkoSolar also announced that the company will establish its first plant in the United States in Jacksonville, Florida, which is the location of NextEra Energy's headquarters, which is also followed by JinkoSolar following Malaysia, Portugal and A fourth factory established after South Africa.

According to the information released by Jinko Energy, once the plant is fully operational, JinkoSolar’s annual output of its advanced solar module production plant in Jacksonville is expected to reach 400 megawatts per year, with an annual output of more than 1 million solar modules. The factory is expected to Output will begin later this year.

Setting up factories in the United States is obviously an effective measure to deal with 30% tariffs, and this is one of the factors that NextEra Energy values.

“As NextEra Energy continues to invest heavily in new solar projects across the United States, we are extremely pleased to be able to purchase cost-effective and reliable US-made PV modules. JinkoSolar holds the same commitment to drive price competition as we do. "The idea of clean energy." Jim Robo, NextEra Energy's chairman and chief executive officer, commented on the order cooperation.

However, Jingjing Energy Vice President Qian Jing said in an interview with the media that this move is not a response to emergency import restrictions, but instead serves as a foothold for South American exports. In the future, JinkoSolar will carry out large-scale import and export activities through Jacksonville Port.

It is understood that, as a rare global solar photovoltaic company, JinkoSolar currently has eight plants in the world, and subsidiaries in 31 regions around the world, providing solar energy products for terrestrial and commercial customers in many countries and regions. , solutions and technical services.

Earlier media reports pointed out that in recent years, Jinko Energy's project reserves in countries along the “One Belt and One Road” have exceeded 1GW. In addition to the global single largest photovoltaic power plant Abu Dhabi project, JinkoSolar has succeeded in winning the bid for the largest single photovoltaic project in Mexico, the 188MW power plant in Mexico. On the manufacturing level, JinkoSolar Malaysia has invested in a fully-fledged plant. The production capacity of components and modules accounts for 15% of the company's total production capacity. It is currently the largest manufacturing investment project for PV companies in China.

Avoid trade frictions and expand emerging markets

Compared with the domestic first-tier companies in the photovoltaic midstream industry, Jinko's global layout and technical barriers in multiple areas are important factors in winning this order, but the global layout strategy and components The company’s main product business also puts Jingke in a profitable test.

It is understood that it is precisely because Jingke has been adhering to the strategy of uniform global distribution. In the past year, when the domestic market was extremely hot, and it accounted for almost half of the total installed capacity in the world, the shipment of Jinko in China did not increase significantly. This also makes Jinke's financial report data may not be as bright as other solar companies in the betting China market.

In 2017, while the performance of domestic PV companies increased significantly, JinkoSolar’s annual module shipments reached 9.8GW, an increase of 47.3% year-on-year, but net profit fell by 92.24% year-on-year, and the gross profit margin also came from 2016. 18.1% fell to 11.3% in 2017.

In this regard, Jinko Energy pointed out that the decline in gross margin is to meet the enthusiastic market demand increased with the OEM partner's output, as well as raw material prices, component prices and other effects. In the announcement, JinkoSolar stated that with the decrease of raw material prices in the upstream, the reduction of raw material purchases and the reduction of technology costs, Jinko's gross margin and profitability will have much room for improvement in 2018.

In addition, JinkoSolar also stated that the company is confident in further expanding its global market share in 2018. Qian Jing said in an interview earlier that Jinko's module shipments in 2017 grew by 47% from 2016, approaching 10GW, and continue to lead the world. It is the first company in the world to reach a 10GW threshold. Compared with 2016, the more significant improvement of Jinkee is the more uniform global layout.

It is reported that in 2016 Jinkee's industrial territory, the domestic market accounted for 40%, this figure dropped to about 30% in 2017, at the same time, the proportion of other markets increased, of which the United States accounted for about 18%, South America accounted for To about 16%, Europe, Japan accounted for about 8%, the Middle East accounted for about 8%.

In the face of trade frictions between China and the United States, Qian Jing said that in addition to technological research and development, one of the measures to reduce the negative impact of trade friction is to not rely too much on a single market global strategy. “In recent years, photovoltaics have been the first to suffer from trade disputes, while China's first-line photovoltaic companies still rely on their leading R&D and manufacturing technologies, complete industrial clusters and supply chain advantages, and continue to grow in contrarian resilience. Market share, but it cannot be denied that trade disputes have a great impact on photovoltaic companies with weak competitiveness in the second and third tiers."

It is understood that in the global photovoltaic panel market, U.S. demand accounts for about 20%. According to analysis, about 20% of Jinko Energy's shipments are exported to the United States. However, photovoltaic power generation popularized in developed countries is infiltrating into Southeast Asia, the Middle East, and Africa. JinkoSolar will seize the needs of emerging market countries, in the future will expand the market in the Middle East and South America, plans to produce 13.5 million kilowatts of photovoltaic panels in 2018, an increase of 30%.

For another issue of concern, Qian Jing pointed out earlier that PV companies can further infiltrate and replace components through increased component power, improved yield, improved process technology, automation, and smart manufacturing at a time when PV module prices have fallen as a whole. Management efficiency improved to cope with downward pressure on prices.


----Xiamen Lynsa Intelligent Technology Co., Ltd.