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Company News

UPDATE 1-Suntech sets site for 30 MW plant in Arizona

* Chinese company picks city of Goodyear in Phoenix area

* Plant to start with annual production capacity of 30 MW

* Shares close down 3.2 pct (Adds details on facility, background, byline)

PHOENIX, Jan 27 (Reuters) - Chinese solar panel maker Suntech Power Holdings Co Ltd STP.N has selected the city of Goodyear in the Phoenix, Arizona, area for the site of its first U.S. manufacturing plant, the company said on Wednesday.

The news follows Suntech’s announcement in November that it picked Arizona to open its U.S. panel assembly facility, which will use solar cells shipped from China. [ID:nBNG62856]

The plant will begin production in September with an annual production capacity of 30 megawatts and 70 employees, and the potential to expand to 120 MW, “giving Suntech the ability to respond to the rapidly growing demand for solar throughout the United States,” the company said.

Suntech’s chief strategy officer, Steven Chan, said the initial investment was $10 million to $15 million and the number of jobs could grow to 250 employees.

“If sales and demand take off, we can expand the facility very quickly,” Chan told Reuters.

The executive said the Chinese panel maker received $2.1 million in U.S. federal tax credits for the plant, which is located in an existing facility.

The greater Phoenix area is already the home to industry bellwether First Solar Inc FSLR.O, which has its headquarters in Tempe.

GROWTH PLANS

Suntech's move mirrors similar plans by other Chinese solar companies, such as Yingli Green Energy YGE.N, to establish U.S. manufacturing sites to gain market share in the country, which is expected to compete with Germany as the world's largest solar market.

Suntech aims for the United States to become its biggest market, potentially by 2012.

In 2009 the U.S. market reached nearly 500 MW, Chan said. The executive said it could grow as much as ten-fold and reach 3 gigawatts to 5 GW in the next three to five years.

“So this facility, if we start at 30 (MW), maybe to keep pace it should go to 300 MW in 3 to 5 years,” Chan added.

Shares of Suntech closed 44 cents lower, or 3.2 percent, at $13.52 on the New York Stock Exchange. (Reporting by Tim Gaynor in Phoenix; Writing by Laura Isensee in Los Angeles; Editing by Bernard Orr, Gary Hill)

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