Chinese Solar Panel Manufacturers Make Major Push Into US Market
For years, the United States has sought to protect domestic suppliers by imposing ever-higher barriers on imports of Chinese solar panels. However, a recent wave of investment by Chinese companies has seen them constructing, or expanding, solar panel factories in various states such as Ohio and Texas. This is largely owed to the introduction of generous production subsidies under the 2022 Inflation Reduction Act.
Global photovoltaic giants, most of which have production lines in China, have announced about 80 gigawatts of new solar panel capacity projects since the implementation of the Inflation Cut Act, according to an analysis by The Wall Street Journal. The US has slated large-scale production subsidies to be awarded under this act, with Chinese companies potentially receiving up to $1.4 billion in annual government subsidies.
The growing presence of Chinese solar panel manufacturers has implications for the nascent US solar supply chain. Industry trackers estimate that more than 80% of global solar production takes place in China, making the technical expertise, supplier networks, and deep pockets of Chinese companies crucial in bolstering the US’ clean energy deployment.
One such example is Longi Green Energy Technology, which is currently building factories in the US. The company is partnering with renewable energy developer Invenergy in Ohio and is already set to start producing solar panels.
Trina Solar, the world‘s largest solar panel manufacturer, has announced its investment in a factory near Dallas that will produce 5 gigawatts of solar panels annually. Moreover, Trina Solar is making a conscious effort to integrate into the US market by starting operations on US soil and reinvesting profits back into the country.
However, while these moves by Chinese solar manufacturers promise to invigorate the US’ clean energy goals, they are not without opposition. Critics have voiced concerns that the subsidies offered to Chinese companies may undermine the US’ efforts to build domestic supply chains and secure energy independence.
This is further underscored by a bill introduced by U.S. Congressman Marco Rubio that aims to prevent Chinese companies from receiving such subsidies for clean energy production.
The Biden administration faces a tricky balancing act, as it attempts to confront climate change, build domestic manufacturing, and regain technological supremacy in solar energy. It also has the task of managing the country’s relationship with China in the solar arena.
Despite the controversy, Chinese businesses continue to assert their value on US soil. Trina Solar, for instance, after adapting its supply chains in response to punitive tariffs, has decided to construct a factory in the US as a strategic investment. The company is confident in its ability to influence the US market and contribute positively to its economic growth.
The future of China’s solar panel manufacturers in the U.S. is marred in uncertainty, as their bid to expand operations has sparked a political and economic tussle. Yet, for now, Chinese companies seem undeterred in their determination to not only survive, but thrive, in the competitive US solar market.