The construction of U.S. solar manufacturing plants by Chinese companies is surging, putting China in a position to dominate the nascent industry, as other American factories struggle to compete despite federal subsidies.
According to a Reuters analysis, Chinese companies will have at least 20 gigawatts’ worth of annual solar panel production capacity on U.S. soil within the next year, enough to serve about half the U.S. market. This includes seven purely Chinese-owned companies: Jinko Solar, Trina Solar, JA Solar, Longi, Hounen, Runergy, and Boviet.
The rapid increase in U.S. solar panel production by Chinese-owned companies represents a worrying result for President Joe Biden’s climate agenda. While the administration is keen on new investment that creates U.S. jobs in clean energy, it is also desperate to prevent over-reliance on geopolitical rival China as the economy transitions from oil and gas to renewables.
Chinese-backed companies have distinct advantages over competitors in the U.S., such as heavily subsidized supply chains for raw polysilicon and unfinished solar modules, as well as low-cost government financing. Like non-Chinese companies, they also collect U.S. subsidies for clean energy manufacturing embedded in the 2022 Inflation Reduction Act, Biden’s signature climate law.
Experts say it is hard for greenfield manufacturers in the U.S. to compete with the speed and efficiency of Chinese companies in setting up factories and supply chains. However, some researchers also note that the Chinese investment will help the domestic solar manufacturing industry mature while creating jobs.
Local and state officials in places where Chinese firms are setting up factories, including Texas, Arizona, Ohio, and North Carolina, have welcomed the investments.