JinkoSolar adopts wait-and-see approach to Brazil PV plant

Chinese PV manufacturer JinkoSolar has decided against opening a production plant in Brazil until the company sees how the market develops, an executive told Recharge.

Rafael Rieiro, a Brazil-based sales manager for JinkoSolar, said the company will provide more than 200MW of modules to projects in Brazil by the end of 2016.

But Jinko has no immediate plans to build a module factory in Brazil. The company recently completed a six-month study of the Brazilian market and came to the decision that now is not the right time. 

“The company's board wants to see more and wants to take on less risk,” Rieiro said at the Intersolar South America event this week.

As of today, only local companies in Brazil are producing solar panels. Globo Brasil has the largest capacity at 180MW. But according to development bank BNDES 10 companies intend to build module factories, with China's BYD among those to already commit to a plant.

Several of Jinko's clients won bids in August's 834MW national solar energy auction, Rieiro said.

Jinko’s first project in Brazil, an 11MW plant in Pernambuco run by Enel, started supplying solar energy one month ago. Enel announced at the conference that 100% of its solar panels will be imported from China.

To mitigate risk with Brazil's highly fluctuating currency, many of the companies that won contracts in the national auctions will be looking to BNDES for financing. But the bank will only provide it for solar power plants that are constructed with Brazilian components.

“Some of [the winning companies] will rely on BNDES financing,” Rieiro said. “But no local company can deliver the quality that they need. They don’t have the experience,” he claimed.

There is also the price issue. “[BNDES] don’t listen to us,” Rieiro said. “We told them that a locally produced panel is too expensive and that clients don’t want to pay that.”

The problem, Rieiro said, is that if Jinko opens a factory in Brazil, the company could only sell the solar panels to projects in that country.

"Even if we could sell Brazilian solar panels to Chile, Colombia and Uruguay, all of them would still buy from China,” Rieiro added.

Brazilian modules are at least 30% more expensive than panels from China – even more if certain tax incentives are not in place, he claimed.