PHOENIX (Reuters) - Chinese solar panel maker Suntech Power Holdings Co Ltd has selected the city of Goodyear in the sprawling 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.

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.

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

Suntech's move mirrors similar plans by other Chinese solar companies, such as Yingli Green Energy, 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 in the coming years.

Shares of Suntech were down 4.6 percent at $13.32 in trading on Wednesday on the New York Stock Exchange.

(Reporting by Tim Gaynor in Phoenix; Writing by Laura Isensee in Los Angeles; Editing by Bernard Orr)