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Company News

UPDATE 1-China's Yingli delays decision on U.S. plant

* Facility was previously seen in production by year-end

* Company says looking forward to more favorable markets

LOS ANGELES, May 25 (Reuters) - China's Yingli Green Energy Holding Co Ltd YGE.N has delayed a decision to open its first U.S. plant because of market uncertainty, a potential snag in the company's aggressive growth plans.

Yingli had previously said it would build a 100 megawatt module manufacturing facility in the country, and that production would start by the end of 2010.

“We are delaying the decision to open a U.S. factory,” Helena Kimball, head of marketing communications at Yingli, told Reuters.

“The multiple headwinds in some of the key solar markets such as the drastic feed-in tariff reduction in Germany, the feed-in tariff cuts in Spain, as well as the recent volatility in the currency exchange have all impacted our decision.”

Germany, the world’s No. 1 solar market, is set to cut its feed-in tariff, or a premium price utilities pay for solar, in July -- a move that has cast a shadow over the entire sector.

Weakness in the euro has also dragged on solar stocks this year, as many companies sell the bulk of their product in the traditional solar powerhouse market of Europe.

As subsidies there are cut, the United States is seen emerging as a market leader for the renewable power source, which is why Yingli and several other solar companies have announced plans to construct U.S. plants.

Japan's Kyocera 6971.T has said it would begin U.S. production this year, as has Suntech Power Holdings Co Ltd STP.N.

Yingli said in April it expects to more than double its share of the U.S. market this year.

Production at Yingli’s U.S. plant was previously expected to have started this year and ramp up to 100 MW by 2012.

“We’ve invested a lot in this process and are determined to make the factory work,” said Kimball. “We look forward to doing so when the market dynamics are favorable and we are confident we’re in a position to make a responsible long-term commitment to all of out stakeholders.” (Editing by Gary Hill) ford@thomsonreuters.com; +213 955 6736; Reuters Messaging: dana.ford@reuters.com@reuters.net))

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