JinkoSolar is a global leader in the solar industry. JinkoSolar distributes their solar products and sells its solutions and services to a diversified international utility, commercial and residential customer base in China, the United States, Japan, Germany, the United Kingdom other countries and regions. JinkoSolar has built a vertically integrated solar product value chain, with an integrated annual capacity of 9 GW for silicon ingots and wafers, 5 GW for solar cells, and 9 GW for solar modules, as of June 30, 2018.
JinkoSolar entire production process is closely evaluated. Every cell and module is subjected to at least 36 steps of the most stringent quality inspection procedures and undergoes comprehensive in-house testing in the most advanced UL certified testing lab. It tests its products under extreme conditions such as tropical humidity, desert heat, coastal salt mist or agricultural ammonia enveloped atmosphere.
A powered plant is expected to work for at least 25 years no matter where and under what condition it sits and what challenges it will meet over 1/4 century, therefore it must live up to the highest quality standards. This is why JinkoSolar maintains one of the highest industry standards for the design, performance, and workmanship of its solar products to secure a reliable energy supply of the PV system for well over 25 years.
The main initiative now for JinkoSolar is to acquire a new firm on the island of the Dominican Republic. The Dominican Republic has had little to minor efforts in establishing solar energy innovation. In acquiring this new firm in the Dominican Republic, it will primarily follow a model and legislation that Germany has produced.
Germany in the year 2000 has passed the German renewable energy source Act. This law provides a fixed tariff energy scheme to encourage the generation of renewable energy practices. German government renewable energy will contribute to 35% of the electricity production by 2020. The German government has implemented a policy a guaranteeing a fixed tariff for 20 years. Renewable energy plant operators of electricity will follow the policy implementation.
Significance market growth would be verified to nearly all renewable resource approximately 20% of Germany’s electricity today is met by Renewables. This innovation and technologies are constantly monitored periodically so that the initiative is guided to fulfill future initiatives and goals.
The idea of a fixed energy tariff would be a partnership between Jinkosolar and the Dominican Government. The fixed tariff will allow companies to operate from a set unit rate that stays at a specific price for the duration of the plan but then can extend itself to year or five years or 10-year timeline. By having a fixed tariff producer can increase their prices but the rates of the productions and companies on the island will not change because they are fixed rates. Fix Tariff offer energy security and often times are the cheapest deals out there.
Citizens homes that benefit from fixed tariff will save money in the long-term rising in prices it won’t affect your company or your household. With this governmental partnership, the initiative will allow Jinkosolar in bringing its full ideas strategies and expertise in providing a solar fueled grid to the Dominican of Republic Island by having a fixed tariff. The benefits of this tariff will also extend itself to not only the island but to also Jinkosolar and its new firm based in the Dominican Republic.
In the U.S alone the solar industry generated $154 billion in economic activity in 2016, including direct sales, wages, salaries benefits, taxes and fees. Revenues have grown from $42 million in 2007 to $210 million in 2017. About 25 percent of total new power plant capacity installed in 2017 came from solar despite tariffs imposed by The Trump Administration of up to a staggering 30 percent.
The industry is projected to continue to grow for the foreseeable future however, the solar trade tariffs on an industry that relies heavily on imports from overseas could dampen those efforts. These tariffs, a decision which came in response to a complaint filed by two US based solar panel companies have the potential to deal a major blow to renewable energy efforts. Much of the industry opposes the action which is expected to increase the cost of solar projects and depress demand.
According to estimates, the tariff alone will reduce solar installations by 11 percent from 2018 through 2022. The industry directly or indirectly employs about 370,000 people in the United States, of which 260,000 are full- or part-time. Solar photovoltaic installers make up about half of this workforce. In fact, solar PV installer is currently the fastest-growing job in the nation, with a median annual salary of nearly $40,000. For comparison, the coal industry only supports about 160,000 jobs. Electric power generation from solar and wind energy combined contributes about three times as many jobs as electricity production from fossil fuels.
About 80 percent of solar panels installed in the United States last year were built overseas. While the industry was invented here, China has poured up to $47 billion into tax breaks and incentives in order to develop what it views as a strategic capability. Along with an abundant supply of cheap skilled labor, these investments reduced the price of solar panels by 80 percent between 2008 and 2013. Some foreign solar panel manufacturers are negotiating to open factories in the United States, much as foreign car manufacturers did during the Reagan administration.
Similarly renewable energy in the Dominican Republic has the potential to greatly boost the turbulent economy plagued by corruption and political patronage. A new solar power project in the Dominican Republic will be the largest of its kind in the Caribbean upon its completion.
The Monte Plata project, named for the capital city and province in which it is located, is the 33.4 megawatt (MW) photovoltaic solar array destined to churn out five times as much clean energy as the nation currently generates. By increasing renewable energy generation, the energy-scarce island country will be able to greatly reduce its need for imported fuel and take a leap forward toward economic independence.
This project alone will triple the number of solar panels in the Dominican Republic, adding 132,000 panels to produce more than 50,000 megawatt hours (MWh) of clean energy each year, which will be fed into the nation’s grid. The Monte Plata project also reportedly creates 1,300 jobs, with the majority being local – at or near the site. The Dubai-based international solar developer Phanes Group, which has active projects in the Middle East and Europe, designed the Monte Plata array and will carry out its installation.
The solar array at Monte Plata is being touted as the island nation’s ticket to economic and energy independence. Once the second phase of construction is complete—which is expected by the end of this year—its output will increase the solar power produced in the small country by fivefold. Martin Haupts, CEO of Phanes Group, says the solar array will benefit citizens directly and open up new opportunities. “With much of the Caribbean challenged by expensive fuel imports,” he said, “solar has the ability to liberate these island nations from economic and energy dependency, increasing the energy security and reducing greenhouse gas emissions while helping elevate communities.”
Political Perspective (Policy)
Fiscal and monetary policy have a great effect on investment. Gross Domestic Product, or GDP, is dependent on consumption, investment, government expenditures, and net exports. Fiscal policy affects GDP through government spending and taxation which has an impact on employment and household income, which influences consumer spending and investment. Monetary policy has to do with the money supply in the economy, which has an influence on the interest rate and the inflation rate; the interest and inflation rate affects business expansion, net exports, employment, etc.
If the policies within the home country and the foreign country benefit a business without conflict, you can expect for them to invest in the foreign country. According to an article by August Rick in Forbes Magazine, August argues that the solar battle between the United States and China can benefit the industry worldwide. The United States accuses China of export dumping, which means that they are flooding the market with cheap knockoffs of American products through intellectual property theft and other unfair market practices.
Due to these claims, since 2012 the United States has imposed tariffs on Chinese solar products, including a 31% import tax. Since the United States has imposed these taxes, China has resorted to third-country exporters which have assisted in the decline in the prices of solar-energy harnessing devices. In this situation, policy is very important because it can have an affect on the overall price of Solar panels. Due to China export dumping, solar prices outside of the United States are really cheap for domestic importers, and this is causing business for domestic producers to slow down.
In August 2017, American Solar Panel manufacturers Suniva and SolarWorld, who represent less than 500 domestic manufacturing workers, placed an official complaint to the United States International Trade Commission. In this complaint, they asked them to place a trade tariff on solar imports because without it, China will continue to export cheap crystalline silicon photovoltaic cells and modules.
These solar modules are less expensive due to them being faster and easier to manufacture, thereby hurting American companies who use more expensive yet efficient products and practices to create their own solar devices. Another political perspective on this topic comes from a letter published to the United States International Trade Commission by American Solar manufacturers PanelClaw, as well as 27 companies.
Combined, they represent more than 30% of the flat-roof solar racking in the country, and more than 5,700 domestic manufacturing companies. In this letter PanelClaw which is a company based in Boston argued that tariffs on imports would more than double the price of solar panels in the United States, which would hurt everyone in the long run.
August Ricks claims “If solar module prices in the U.S. rise that may push solar manufacturers to overcapacity, and global module prices would likely follow downward. In emerging or underdeveloped markets for solar energy, overcapacity would catalyze development.” This means that solar energy will now be a more demanded good in underdeveloped countries which is good for solar manufacturers.
The Dominican Republic is an underdeveloped country in need of renewable energy, its electrical power generation and distribution center is very old school and slow. Due to systematic problems, their electrical power system is so impoverished that the country experiences electrical outages that can last from a few minutes to a few hours.
The country has proposed an electric sector reform known as the “Electric Pact” which includes generous tax incentives for investors, their intentions with this pact is to increase their standard of living in the Dominican Republic, and also make the country more competitive. There are several laws being implemented in the Dominican Republic which would be beneficial for a big company and make the country attractive for investment.
One of those laws are “Presidential Decree 557-02: Supports the diversification of sugar mills into energy-producing Independents Power Producers (IPP) industries.”(International Energy Agency) with this law JinkoSolar can purchase a sugar mill factory and turn it into a non-utility generator which is not a public entity. This is beneficial for the company because that way they can avoid the costs of starting completely from scratch.
Another law which creates incentive for JinkoSolar to invest on solar panel manufacturing in the Dominican Republic is, law 57-07 on incentives for development of renewable energy sources and its special regimes. In this policy upon compliance with certain project-specific regulatory procedures, solar installation projects qualify for many concessions and incentives.
