If one of the ideas behind the Inflation Reduction Act (IRA) tax credits was to deepen American domestic solar supply chains, its side effect was an increase in demand for solar (via Chinese imports, too) and increased investments here by the very Chinese multinationals that dominate the market. Only a handful of U.S. founded solar companies exist and only one of them, First Solar, is a top 10 solar manufacturer.
Tariffs have been the main tool to suppress China’s dominant role in solar. Each time tariffs were used or threatened, the news was countered by the argument that if not for China, climate change is unstoppable. This line doesn’t only come from the Chinese. It mostly comes from Americans, including Washington’s previous climate envoys John Kerry and John Podesta.
Solar importers also raise the issue.
“We need effective solutions that support U.S. solar manufacturers and, at the same time, help us deploy clean energy at the scale and the speed we need to tackle climate change and serve growing electricity demand here,” said Abigail Ross Hopper, president of the Solar Energy Industries Association (SEIA) in an Oct. 1 article on Bloomberg.
Relying on technology made outside China could lift global energy transition costs by as much as $6 trillion, or 20%, he said, citing a Wood Mackenzie analysis.
“We need to maintain low costs, otherwise nobody is going to be able to afford the energy transition,” China diplomat Li Zhenmin said in an interview with Bloomberg Television on May 1. “What I’m worried about is if the U.S. and European Union continue to insist on that approach (tariffs), it would result in a delay in the substitution of fossil fuels by renewables globally.” Meanwhile, China is plugging its economy into more coal fired power plants than any other country in the world.
If Brazil and Argentina want to import China solar panels instead of making their own, then that is their prerogative. The U.S. should not be reliant on foreign multinationals to power the energy grid, especially considering that some states are moving to mandate renewable energy instead of domestic fuel sources, namely natural gas.
This week, CPA’s economic team released an industry report titled “The U.S. Solar Supply Chain 2025: Building a Strong and Resilient American Solar Industry.” The report highlights the critical state of the U.S. domestic solar manufacturing industry and lays out actionable policy recommendations to secure America’s abundant energy future through a diversified energy portfolio that includes a robust advanced solar manufacturing technology supply chain, while reducing dependence on Chinese imports.
The report documents how roughly $35 billion in solar investments made since the 2022 IRA law are in doubt. Long term viability is severely threatened by Chinese overproduction, price manipulation, and circumvention of trade laws across the entire solar supply chain. Overproduction has led to falling global prices, cutting into the return on investment calculations made by domestic producers. This has led to financial losses in the solar market here, even among China’s solar companies. A bulk of the new product coming into the U.S. is from China companies in Southeast Asia, a trend that prompted at least two trade cases during the Biden years.
Solar is a matter of energy security and economic security. Given China’s corporate position in global solar, it was a given they would set up shop in the U.S. to benefit from the IRA tax credits.
But with recent concerns over their position, coupled with additional geopolitical strains (like the UFLPA), China companies may find themselves out of favor. Still, the U.S. needs to build up its own capacity if it wants to compete with the Chinese multinationals when selling to the big end users – the utility companies and solar project developers. To entice the building of that capacity, Washington will have to use the usual trade tools from tariffs and quotas. Even with the IRA, China has proven to be the price setter. They can easily own the market thanks to their pricing power caused by overproduction and subsidies. The U.S. participant risks being kicked out of its own home market by the China rival. No amount of U.S. subsidies would be enough to compete.
China-based Trina Solar’s Market Access to U.S. Faces Increasing Hurdles
The geopolitics of solar are impacting a number of top China solar companies. Trina Solar is the latest. Tariffs on solar made in their southeast Asian factories were increased this month for circumventing duties, and a $235 million investment into Texas was sold in late 2024.
The Commerce Department’s final analysis on Trina subsidies moved the tariff rate from less than 1% to a countervailing duty rate (CVD) of 13.59%. The adjustment was based on Commerce’s assessment of cross-border subsidies from mainland China into Trina solar factories in Thailand, including China-made silicon wafers and solar glass that go into the solar cells which are plugged into solar panels.
Trina was part of a solar case brought on last year by the Alliance for American Solar Manufacturing, a group of U.S. based solar producers who compete head to head with imported panels from Asia.
Commerce also increased CVD rates from 34.52% to 39.27% for Thai producers Sunshine Electrical and Taihua New Energy.
Solar Import Surge Caused by Massive Subsidies Prompts Additional Antidumping Allegations
Read More »Trina’s China rival JA Solar was also hit with duties in the preliminary decision in October. They are still going ahead with its planned investment in Arizona, at least as recent as July. JA Solar was added to the infamous Uyghur Forced Labor Entity List (UFLPA) on Jan. 14. Trina has avoided that listing so far.
JA Solar’s tariff rate is still low, it’s a wonder why the Commerce Department bothered in the first place. The currency alone will wipe out JA’s 2.85% CVD. KeyBanc Capital Markets said in a research note that the current rates were “so low as to be meaningless.”
They might go up further, though.
Final determination of rates will be made in February for Commerce and March for the International Trade Commission. They will go into effect on April 3, 2025.
Despite Inflation Reduction Act, China Dominates Solar Everywhere
If one of the ideas behind the Inflation Reduction Act (IRA) tax credits was to deepen American domestic solar supply chains, its side effect was an increase in demand for solar (via Chinese imports, too) and increased investments here by the very Chinese multinationals that dominate the market. Only a handful of U.S. founded solar companies exist and only one of them, First Solar, is a top 10 solar manufacturer.
Tariffs have been the main tool to suppress China’s dominant role in solar. Each time tariffs were used or threatened, the news was countered by the argument that if not for China, climate change is unstoppable. This line doesn’t only come from the Chinese. It mostly comes from Americans, including Washington’s previous climate envoys John Kerry and John Podesta.
Solar importers also raise the issue.
“We need effective solutions that support U.S. solar manufacturers and, at the same time, help us deploy clean energy at the scale and the speed we need to tackle climate change and serve growing electricity demand here,” said Abigail Ross Hopper, president of the Solar Energy Industries Association (SEIA) in an Oct. 1 article on Bloomberg.
Relying on technology made outside China could lift global energy transition costs by as much as $6 trillion, or 20%, he said, citing a Wood Mackenzie analysis.
“We need to maintain low costs, otherwise nobody is going to be able to afford the energy transition,” China diplomat Li Zhenmin said in an interview with Bloomberg Television on May 1. “What I’m worried about is if the U.S. and European Union continue to insist on that approach (tariffs), it would result in a delay in the substitution of fossil fuels by renewables globally.” Meanwhile, China is plugging its economy into more coal fired power plants than any other country in the world.
If Brazil and Argentina want to import China solar panels instead of making their own, then that is their prerogative. The U.S. should not be reliant on foreign multinationals to power the energy grid, especially considering that some states are moving to mandate renewable energy instead of domestic fuel sources, namely natural gas.
This week, CPA’s economic team released an industry report titled “The U.S. Solar Supply Chain 2025: Building a Strong and Resilient American Solar Industry.” The report highlights the critical state of the U.S. domestic solar manufacturing industry and lays out actionable policy recommendations to secure America’s abundant energy future through a diversified energy portfolio that includes a robust advanced solar manufacturing technology supply chain, while reducing dependence on Chinese imports.
The report documents how roughly $35 billion in solar investments made since the 2022 IRA law are in doubt. Long term viability is severely threatened by Chinese overproduction, price manipulation, and circumvention of trade laws across the entire solar supply chain. Overproduction has led to falling global prices, cutting into the return on investment calculations made by domestic producers. This has led to financial losses in the solar market here, even among China’s solar companies. A bulk of the new product coming into the U.S. is from China companies in Southeast Asia, a trend that prompted at least two trade cases during the Biden years.
Solar is a matter of energy security and economic security. Given China’s corporate position in global solar, it was a given they would set up shop in the U.S. to benefit from the IRA tax credits.
But with recent concerns over their position, coupled with additional geopolitical strains (like the UFLPA), China companies may find themselves out of favor. Still, the U.S. needs to build up its own capacity if it wants to compete with the Chinese multinationals when selling to the big end users – the utility companies and solar project developers. To entice the building of that capacity, Washington will have to use the usual trade tools from tariffs and quotas. Even with the IRA, China has proven to be the price setter. They can easily own the market thanks to their pricing power caused by overproduction and subsidies. The U.S. participant risks being kicked out of its own home market by the China rival. No amount of U.S. subsidies would be enough to compete.
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