JinkoSolar Power Co., Ltd., a subsidiary of JinkoSolar Holding Co., Ltd. (JKS), inked a contract with the government of Shicheng County in Jiangxi Province to construct a 200-megawatt (MW) photovoltaic (PV) power plant. The estimated investment required for the project is pegged at around $261 million (roughly RMB1.6 billion).
Based in the Zhuokeng and Fengshan villages, Shicheng County, Ganzhou City, Jiangxi Province, the PV power plant is scheduled to develop in four stages over a course of four years. The construction for the first phase will start in the first six months of 2015.
Upon completion, the power farm will able to produce 240 million kilowatt-hours (kWh) of electricity annually. It will likely obtain both national and provincial level subsidies of RMB1/kWh and RMB0.2/kWh, respectively, for 20 years.
The Chinese government is currently encouraging solar panel providers by executing favorable policies and subsidies, and forming investment funds to promote utility-scale and distributed generation solar power projects in the country.
In Sep 2014, Canadian Solar Inc. (CSIQ) announced that one of its subsidiaries will form an investment fund of $800 million (RMB5 billion) in China, partnering with Sichuan Development Investment Management Ltd. and third-party investors. Sichuan, China-based Sichuan Development is an investment management entity created and funded by the Sichuan provincial government’s investment wing, Sichuan Development (Holding) Ltd. The objective of the initiative is to increase the utilization of solar energy.
Recently, the National Energy Administration of China has told local administrations to focus on distributed generation, reform and emphasize feed in tariffs, and provide additional financial incentives as well as fast track connections. These initiatives are a step toward China’s target of installing 8 gigawatts (GW) of distributed solar in 2014.
JinkoSolar is looking to tap the Chinese market for solar energy. The company maintains a strong order book from Chinese customers and has a good business alliance with local governments. On Aug 22, 2014, the company’s subsidiary entered into an agreement with the local government of Hengfeng County in Jiangxi Province to construct a total of 100 MW of PV projects. JinkoSolar will finance the projects and also provide engineering, procurement and construction (EPC) services.
Apart from JinkoSolar, its peers ReneSola Ltd. (SOL) and Trina Solar Limited (TSL) have a significant presence in China.
JinkoSolar’s steady efforts to maintain its strong foothold in China besides expanding operations in the U.S., Japan and other parts of the world are appreciable. These initiatives will help the company expand its cash inflow streams substantially.
JinkoSolar currently holds a Zacks Rank #3 (Hold).
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